How to calculate if it’s worth it to redeem your points for travel (2024)

The first step in building a comprehensive credit card rewards strategy is choosingyour portfolio of credit cards. Ideally, you’ll have a mix of general travel rewards cards with transferable points, cobranded cards tied to your favorite airlines and hotels and maybe a cash-back credit card or two for balance.

Once you’ve accumulated enough points on various cards, you’ll want to decide how to best use those points. Some redemptions are better than others, turning even a small stash of points into a long-haul flight or a luxury hotel stay.

As a credit card rewards writer, I’m often asked, “Should I use points for this travel purchase or pay in cash?” While there’s no one-size-fits-all answer, there are a few ways to tell if the points redemption is worth it. Here’s a guide on how to calculate whether it’s worth it to redeem your points for travel.

Understanding the different types of rewards

Not all credit card rewards are created equal. For example, the value of a Chase Ultimate Rewards® point can vary depending on which card you have. The estimated value of a Marriott Bonvoy® point differs from that of a Hilton Honors point, and so on.

To determine how much value you can get from a point or mile for a particular flight or hotel stay, simply divide the cash price by the redemption price in points or miles. For example, using 50,000 SkyMiles® to get a plane ticket with a cash price of $500 on Delta Air Lines provides a value of one cent per mile.

Keep in mind that different types of points and miles can be redeemed in different ways, and some are more flexible than others. Here’s a brief breakdown of the different types of points and miles and how each can be redeemed.

Fixed value

Most credit cards offer a fixed value for their points if redeemed for cash back, travel, gift cards, statement credits or shopping purchases. Some credit cards don’t allow you to transfer your earnings to a different loyalty program. The value can be different for different kinds of redemptions, but it’s explicit and unchanging. For instance, you might be able to redeem 10,000 points for a $100 statement credit or $150 towards travel booked in the credit card issuer’s travel portal.

Variable value

Most hotels and airlines use a dynamic pricing model for award tickets. This means points or miles aren’t worth a set amount — their value can fluctuate and doesn’t always correlate with a cash value. For example, you might notice an airline basing a redemption cost on the distance flown, a hotel basing a redemption cost on the category of property, or either basing redemption costs on peak versus non-peak travel seasons. Unfortunately, this means most loyalty programs have done away with award charts, so you’ll have to put more effort into finding a good redemption.

Although it can take a lot of research to find a great deal, they are out there. As you become more familiar with reward currencies, you can tell if a redemption is worth it. As a general rule, you’ll want to redeem the lowest number of points for travel to cover an otherwise cash-expensive purchase.

Transferable points

If you have a general travel rewards card, you may be able to transfer your points from your card to a different loyalty program. The most common transferable point currencies include:

• American Express Membership Rewards®
• Capital One Rewards
• Chase Ultimate Rewards
• Citi ThankYou® Points

With each of these programs, you can redeem points or miles at a fixed value within your card issuer’s travel portal or transfer them to a hotel or airline loyalty partner to get a potentially higher value. Each card issuer has its own list of transfer partners, so get familiar with these partnerships before applying for a new card. In general, transferring your points or miles is “worth it” if you are getting more value for your points than the fixed rate the travel portal offers.

Example hotel scenario

Let’s say you’re planning an August vacation to the Dominican Republic. You’re looking for a relaxing beachfront hotel where you can sip on piña coladas and savor seafood. You’re a cardholder of the Marriott Bonvoy Bevy™ American Express® Card (terms apply), which gives you automatic Gold Elite status and allows you to earn the fifth night free for every four you book. You’re also a cardholder of the American Express® Green Card*The information for the American Express® Green Card has been collected independently by Blueprint. The card details on this page have not been reviewed or provided by the card issuer. (terms apply) and the Chase Sapphire Reserve®, both of which list Marriott Bonvoy as a transfer partner.

All information about American Express® Green Card has been collected independently by Blueprint.

You can’t decide between an all-inclusive and a traditional property, so you compare which one has the better deal. You look at two properties, the all-inclusive adults-only Sanctuary Cap Cana and the luxury Westin Puntacana. While researching, you find that a seven-night stay at the Westin costs $2,135. The same stay at Sanctuary Cap Cana costs slightly more, at $3,528. The Sanctuary rate includes food and beverages, while the Westin rate does not.

The Westin stay costs 212,000 Bonvoy points, giving you a valuation of around one cent per point. The Sanctuary stay costs significantly more, at 720,000 Bonvoy points, giving you a mere fraction of the value per point. In this example, it would be worth using your points to book a stay at the Westin, but not worth it for the Sanctuary.

If you’re leaning toward the all-inclusive option, it likely makes more sense to put the stay on your Marriott Bonvoy Bevy card to earn points that you can use on a future redemption. Most people don’t have more than 700,000 points for one hotel stay anyway, and putting it on your credit card will allow you to accumulate plenty of points for a different trip where you can get a better value.

Example flight scenario

Let’s say you score some last-minute tickets to the 2024 Paris Olympics. You decide to fly from New York City (JFK) to Paris (CDG) on Delta Air Lines because you are a Delta SkyMiles® Reserve American Express Card (terms apply) cardholder. As a perk of the card, you get 15% off award redemptions, but you still want to maximize your value.

A nonstop, round-trip flight in Delta One would cost $3,588. The same flight would cost 229,400 SkyMiles, plus $149.80 in taxes and fees.

To get the value of your miles in this scenario, subtract the $149.80 you’ll pay in taxes and fees for an award ticket from the cash cost of the flight, then do the math, dividing the remaining cash amount by the number of miles the redemption would cost. That gives you a valuation of almost 1.5 cents per mile, making it a valuable redemption option.

To put that in perspective, a similar journey on Air France would cost you 524,000 miles plus $543.70 in taxes and fees. That same flight costs $3,889.10 in cash, giving you a value of slightly over half a cent per point. This is an excellent example of when not to transfer points. If you transferred your points from Capital One or Chase to Air France, you’d be devaluing your points compared to the value you’d get just in the travel portal.

So, how do you know when to transfer your points? Here’s a great example — you want to take an end-of-summer vacation to Spain. You can fly one way from Boston (BOS) to Madrid (MAD) with Iberia on August 21 for 20,000 Avios. The same flight costs $1,013, giving you a value of roughly 5 cents per point. You can transfer your Chase Ultimate Rewards to Iberia at a 1:1 ratio to book, which would be well worth it.

Bottom line

No matter which option you choose, you can fund a vacation using points and miles to keep your out-of-pocket costs low. Even if you aren’t getting the top value from your points, you can’t put a price on seeing the world and taking your dream vacation. However, if you’re working with limited points, you might want to do some math to determine if you’re getting a good value.

Like anything, putting a value on points and miles is very subjective, so what might be a great redemption for me might not be worth it to you. Factor in your financial goals and travel desires to help you decide whether to use your points or put a travel purchase on your credit card to earn even more points for a more valuable vacation later.