Calculate whether to use points or pay cash for any booking, find the cents-per-point value of an award, and get a clear recommendation.
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Points or Cash Formula
CPP = (P - T) / N * 100
Use points if CPP >= B, otherwise pay cash
Where:
CPP is the value of the redemption in cents per point. P is the cash price of the booking in dollars. T is the taxes and fees you still pay when booking with points. N is the number of points or miles the award requires. B is your benchmark value per point in cents.
The first formula tells you how much value each point returns on this specific booking. You subtract any taxes and fees from the cash price because those costs are not covered by your points, then divide by the points required and multiply by 100 to convert dollars to cents. The second line is the decision rule: if the redemption beats the value you can normally get for a point, redeeming points is the stronger choice; if it falls short, paying cash and keeping your points for a better redemption usually wins.
Value Benchmarks for a Redemption
Use the value per point you calculate to judge how good a redemption is. These ranges reflect common guidance for airline miles and transferable credit card points.
| Cents per point | Interpretation |
|---|---|
| Less than 1.0 | Poor value; pay cash and save the points |
| 1.0 to 1.5 | Average value; reasonable but not a standout |
| 1.5 to 2.0 | Good value; redeeming points is usually worth it |
| More than 2.0 | Excellent value; a strong reason to use points |
The table below lists typical baseline values for popular programs that you can use as your benchmark when you are not sure what to enter.
| Program | Typical value (cents per point) |
|---|---|
| American AAdvantage | 1.4 |
| Delta SkyMiles | 1.2 |
| United MileagePlus | 1.3 |
| Chase Ultimate Rewards | 2.0 |
| Amex Membership Rewards | 2.0 |
| Capital One Miles | 1.7 |
Example Problems
Example 1. A flight costs $450 in cash or 35,000 miles plus $11.20 in taxes and fees. Your benchmark value is 1.5 cents per point. The net cash cost is $450 minus $11.20, which is $438.80. The value per point is $438.80 divided by 35,000, multiplied by 100, which is 1.25 cents per point. Because 1.25 is below your 1.5-cent benchmark, you are better off paying cash and saving the miles.
Example 2. A hotel night costs $300 in cash or 20,000 points with no extra fees. Using the same 1.5-cent benchmark, the value per point is $300 divided by 20,000, multiplied by 100, which is 1.5 cents per point. This matches your benchmark, so redeeming points is a fair deal, especially if you would rather keep the cash.
FAQ
Should I always use points when the value per point is high? A high value per point means the redemption is efficient, but you should still confirm you are not saving those points for an even better trip. If the value clears your benchmark and you have no higher-value plan for the points, redeeming is usually the right move.
Why do I subtract taxes and fees from the cash price? When you book with points you often still pay taxes and fees in cash. Those costs are not covered by your points, so subtracting them gives you the true cash amount your points are replacing and a more accurate value per point.
What benchmark value should I use? If you do not track a specific number, 1.5 cents per point is a reasonable middle-of-the-road benchmark for most airline miles and transferable points. Use a program-specific value from the table above if you want a tighter estimate.