How we assigned a cash value to points and miles from 30 of the most popular loyalty programs

30.07.2024 - 01:45 / insider.com

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If you earn points and miles through credit cards, hotel stays, or flights, it helps to have a sense of what they're worth. This will help you get maximum value from your rewards — whether it's for a first-class flight or a hotel stay.

To that end, we've published a list of valuations for a variety of airline, hotel, and banking programs. Our valuations show the cash equivalent you can expect to get from your rewards when you use them to book travel. They can also help you decide which rewards to earn, and whether you should redeem them at your earliest convenience or save them for more lucrative opportunities.

Rather than settle on a single number (in cents per point or mile) for each valuation, we provide three to give you a better sense of when you should (and shouldn't) use your rewards:

To help you put our points and mile valuations to use, this article describes how we came up with them. Loyalty programs appear in all shapes and sizes, so there's no universal methodology for evaluating them, but these are the factors we considered to see how each one stacks up.

Here are the factors we considered in determining how much each program's points and miles are worth:

The value you can expect from your rewards

Your options for using rewards

Award availability

Ease of use

Expiration policies

Options for sharing and pooling rewards

Options for earning rewards

Miscellaneous factors (like devaluation history, sweet spots, and credit card perks)

This is the nuts and bolts of any valuation: How much cash value can you get from points and miles when you actually redeem them? The question may sound simple, and calculating the rate of return is straightforward for most individual award redemptions, but the broader answer is complex for several reasons.

To figure out the number of cents per point or mile you'll get from a specific redemption, divide the cash price of the award by the number of points or miles needed.

For example, if an award flight that requires 25,000 miles to book would cost $500 if you paid cash, $500 / 25,000 = 2 cents per mile.

First, a single award redemption isn't necessarily representative of an entire loyalty program. For example, if you're looking to use American Airlines miles, the value you'll get depends on the specific flight you book.

If you conducted a search of every award fare on American, you might find some award flights netting a rate of return over 3 cents per mile and others netting