Impossible point valuations and the joy of free


How much are United miles worth?  Delta miles?  American Airlines?  How much are Ultimate Rewards points worth?  What about Club Carlson points?  Starwood points?  Hilton?  Marriott?

For all of the above and many more, it is impossible to say. The answer to how much a point or mile is worth is “it depends.”

It depends on how many you have

Let’s say you have only a thousand United MileagePlus miles.  In a way, they’re worth almost nothing because you can’t get anything for 1000 miles (except maybe a magazine subscription…).  If you hope to use the miles for a flight, then your 1000 miles are just a piece of the puzzle where the pieces are worthless until they are all in place.

But what if you are just about to earn the last few miles needed for the trip of a lifetime?  Then, those last few miles are nearly priceless.  Those last few miles make all the difference in the world.

At the other end of the spectrum, points & miles become less valuable when you acquire too many.  Once you have enough miles to cover all of the trips you plan to take, the extra miles become increasingly less valuable.  You may or may not ever use them.  Or, maybe you will use those miles, but not before the airline devalues its program.  There is also an issue of relative value.  If you already have a bazillion United miles, for example, you may value acquisition of other mile currencies more highly so as to give you more choice in which airlines or alliances you fly.

It depends on how you use them and how you expect to use them

This is probably the most obvious point, but it needs to be said.  Let’s take Chase’s Ultimate Rewards points for example.  Many people happily redeem Ultimate Rewards points for cash at a value of 1 cent per point.  Others use the points to book travel at a value of 1.25 cents per point.  Others transfer points to airline and hotel programs whereupon they might get value ranging from less than a penny per point (with Marriott or Priority Club, for example) to more than 10 cents per point (with strategic use of United miles, for example).  Clearly, how you use your points determines the value you get from them.

Before you use your points, though, their value is almost impossible to measure.  You may use the points in a way that delivers great value to you, but you may not.  Maybe your points will never be used.  For that reason, I’d argue that the value of points yet to be used is substantially less than the value you expect to get by redeeming them.

It depends on many subjective factors

Points can have more or less value, to you, for a variety of reasons.  Here are some factors that can add or diminish value of points:

  • Hassle factor: Finding flights bookable with miles can be very difficult.  When redeeming miles, you may find yourself choosing inferior flights, worse departure times, or more inconvenient connections than if you had paid cash.
  • Free or cheap changes: Airlines have wildly varying policies about award changes and cancellations, but in most cases the policies are much more lenient than with non-refundable paid tickets.  Airline status matters here too.  For example, as a Platinum elite Delta member, I can change or cancel any award travel for free up to 72 hours prior to departure.  Since I often change my travel plans, this benefit is quite valuable and, to me, it makes my SkyMiles more valuable.
  • Elite status: If you’re chasing elite status with an airline, then there is an added cost when you redeem miles for flights: you lose the ability to earn elite qualifying miles for those flights.  So, in a way, this makes your miles less valuable to you.
  • Local airport / airlines: Most experts agree that United miles are among the most valuable of airline miles.  But what if your local airport is not serviced by United or any United partner or Star Alliance member?  Or, more likely, what if there are just a few flights out of your local airport are redeemable with United miles?  In that case, United miles are probably worth less to you than to others because they would be more difficult to use.
  • Travel habits: If you plan to often take international business class or first class flights, you’ll most likely find your airline miles to be much more valuable than if you plan to fly mostly domestically.  Similarly, if you plan to regularly stay in top hotels in expensive cities, you’ll get great value from hotel points.  Conversely, maybe the places you tend to travel don’t offer good value for hotel points.  Or, maybe you prefer other options: B&Bs, hostels, house rentals, time shares, etc.  One way or another, your travel habits and preferences have a big impact on the value of your points.
  • The joy of free: When you book travel using miles & points, it may feel like your trip is free (or nearly free), regardless of how many miles and points you spend.  If so, the pleasure you get from spending points and miles may greatly outweigh the pleasure you’d get from paying for the same trip with cash.  In this case, miles & points are arguably (and ironically) worth more to you because you do not value them like cash.


An alternative to “value”

All of the above is a long winded way of saying that the value of your points and miles depends.  Quite a while ago, I developed an alternative.  I argued that most people earn most of their miles through credit card spend rather than from flying.  When a person uses a mile-earning credit card instead of a cash back credit card, they are essentially making a choice: they prefer miles over cash.  They are inadvertently buying miles by forgoing cash back. That gave me a framework: while I can’t easily estimate the value a person will get from their points and miles, I can estimate how much people pay for those points and miles by forgoing cash back.  I call these estimates “Fair Trading Prices.” 

Fair Trading Prices estimate the price people pay to acquire miles through credit card spend.  They do not attempt to measure “value”.  In fact, the best points and miles are arguably those that can be acquired the most easily (and thus have a low Fair Trading Price), but can be redeemed for the most value.  I believe that Ultimate Rewards points meet those criteria better than any other miles or points.

You can find the table of Fair Trading Prices here: Fair Trading Prices.  A link is also available in the Resources menu of every Frequent Miler page. 

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I agree: it’s complicated. We need quantity to bring liquidity and extract maximum value out of sign up bonuses. So you can’t put a CPM number on incremental miles. In other words it’s a non linear function of what you already have. But I like your fair trading price and I use that to make a buy and sell decision. Miles represent an arbitrage opportunity: you buy(acquire) low and sell(redeem) high. So it’s always hard to talk about one value. I’m ok with buy UR points if 2.5 CPM. I also think of buying a intl biz ticket for 1.5x100k = $1500 and that’s a price I”m comfortable with. I can’t afford a ticket more expensive than that so I go with cash back when CPM goes higher (5% cashback vs 3 points in UR mall).

I like the saverocity article on this topic:


andreas: Thanks. I like the saverocity article. Thanks for suggesting it.


FM, unrelated question…. Have you ever had success double dipping Saks?

Frugal Guy

FM, an easy way to explain the “fair trading price” to your readers may be: As for value, you hope the point value the more the better; as for fair trading price, however, you hope the price the LOWER the better. This would make people realize you are using different things rather than another set of “values”.


Frugal Guy: Thanks, that’s a good idea.

Justin: Never tried Saks


Good post. I think the fact that you’re often forgoing 2% cash back when using miles earning credit cards should not be taken lightly. That makes it quite hard to achieve great value on hotel/airline/point cards unless you have heavy 2X+ earning opportunities.

For example assuming 1X on Any Chase UR card or the Hyatt card, you’d have to spend $22,000 for a night at category 6 hotel. That same spend could earn you $440. So while there are plenty of great hotels in that category costing greater than $440, it may be that you could find a darn good hotel costing $350 a night and you’d come out ahead.

Using an airline as an example, spending $100,000 on Chase UR card or United card at 1X would yield 100,000 or 110,000 United miles. The same $100K of spend would yield $2,000 cash back. Here the value is a lot better as an economy flight to Asia or Europe could at a minimum $1,000 and you’d get two of them with those miles. Alternatively a business class seat would retail for $3500+. However if you wouldn’t pay that much the value isn’t that much.

I guess in summary though, after fulfilling minimum spend requirements, 2% cash back will often be better than most other credit cards earning less than 2X with the exception of airline miles/points which can have a better value.


Jeremy: Yep. I agree! But don’t forget that some people place a lot of value on the ability to enjoy best of the best travel like I did recently with Singapore Suites. That’s an example where my MR points were practically priceless since I would never have forked over the money required to fly Singapore Suite, but with miles I was able to experience a trip of a lifetime. So, it goes back to “it depends” 🙂


I would say it’s very hard to place value on points and miles, but most people can agree which miles are worth more than others. For example, AA miles trump DL miles, SPG points trump all other hotel points. I value AA over United, but somebody else might value United higher. It all depends, and everyone is entitled to their own valuation.


romsdeals: Yes. I’d put it another way: it is easier to get high value redemptions with AA miles than DL miles in most cases. But even there, “it depends”. There are some cases where DL miles will beat AA miles so it depends on what you’re trying to do, when, from where, etc.


I always think its funny when people think redeeming 25,000 frequent flyer miles for a $200 round trip is a bad deal, but if the airline decided to charge $600+ for a flight, it seems like a great deal. If I worked for airlines, I would artificially raise the cash price on award tickets in order for people to redeem miles at a “great” value.
Same theory for hotels, like Hyatt. Is redeeming 18,000 points for a $200 hotel room a bad deal but redeeming for the same hotel room at $600+ a great deal? What do you think Greg?


Rather than place a value on miles/points, my approach when I started years ago has always been to place a floor value. Some are easy. Chase UR, for example, is worth 1.25c to me, TY points are worth 1.33c, etc. Some are harder, such as airline miles and hotel points. Many of them, however, do let you redeem miles and points at a 1 to 1 ratio for gift cards, which are essentially cash equivalents so even though none of us in our right mind would redeem for gift cards, it’s still safe to put a floor value of 1c on certain miles. I feel if beginners follow this mentality of a floor value, they will eventually learn to place their own valuations over time.


WeddingSpend: that’s a great way to think about it.

Grant: Well, like anything else, “it depends”. If you really would pay for a $600 flight or hotel room if points weren’t available, then yes I’d say that using 25K points or 18K points is a great deal because you’ve literally saved $600 in exchange for points that might otherwise be worth much less. But if you could have flown a different airline or stayed in a different (but reasonably similar in quality) hotel for $200, then it is just an artificial “great deal”