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How to calculate credit card point values

Maximize your point redemption by knowing how to calculate your credit card points worth


Knowing what a credit card point is worth can help you make an informed decision about which type of credit card points are best for redemption.

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We talk a lot about credit card points and how they can take us around the world in ways that otherwise wouldn’t be possible on most budgets. However, it can be easy to get lost in how to calculate credit card point values.

Asking how to value rewards points is a simple and essential question with a somewhat complicated answer that depends on several factors. Knowing what a credit card point is worth and how to calculate credit card rewards points can help you choose the best rewards credit card for your wallet.

What types of credit card points can you earn?

There are two types of credit card points you can earn — explore both below:

Fixed-value credit card points

Let’s start at the easiest spot, and that is assigning a value to credit card points that already have a fixed value. This type of point is pretty common in the credit card rewards world and can be found on rewards cards such as the Capital One Venture Rewards Credit Card, where the base value is equivalent to 1 cent per mile. That makes for simple math and simple redemption.

If you redeem a credit card point that’s worth 1 cent per point for cash back, then you could use a 75,000-point sign-up bonus to get $750 in cash back. However, some cards have different credit card point values for different redemption options.

With this in mind, be sure to redeem your fixed-value points at their maximum redemption rate, which is commonly 1 cent per point.

Flexible and transferrable credit card points

Many popular types of points offer flexibility in the form of multiple redemption options. However, it can be difficult to put a true value on the points as they can vary widely among cards and rewards programs.

Two popular credit cards that earn flexible and transferrable points are the Chase Sapphire Preferred Card and the Chase Sapphire Reserve card. There are many ways to use the Chase Ultimate Rewards points that these two similar cards earn, but two of the most profitable are to use them by booking travel through Chase or transferring them to hotel and airline partners such as United, Hyatt, Southwest, Singapore Airlines, JetBlue Airways and more.

If you use the points to book travel through the Ultimate Rewards portal, then a point is worth 1.25 cents when using the Sapphire Preferred card and 1.5 cents when using the Sapphire Reserve card.

However, you can usually get more value from each point when you transfer to one of Chase’s travel partners.

In fact, according to Bankrate’s valuation chart, both cards are currently valued at 2 cents each, even though they are worth less if you use them to book travel directly with Chase instead of through its travel partners.

How to determine the value of credit card points

If you prefer a more hands-on approach and wish to calculate your award redemption values manually, like when selecting the best itinerary for your upcoming trip, Bankrate offers a formula to find out how much your points are worth. Begin by identifying the cost of your desired booking and then divide it by its cost in points or miles.

For example, if a flight costs $150, or 25,000 miles, your miles would be worth 0.6 cents apiece ($150 / 25,000 = $0.006). If the same flight costs, $300, your miles would be worth 1.2 cents apiece ($300 / 25,000 = $0.012).

Is that ultimately a good reward value? It is up to you to decide based on what your travel goals are, but you can maximize your points redemption by calculating your redemption values upon booking your next trip. Compare your estimated value with that of Bankrate’s points and miles valuation data, and decide if it’s worth it to redeem your rewards, pay in cash or find a different booking.

Bottom line

A credit card point is ultimately worth what you redeem it for. It’s up to you whether you redeem your credit card points at a relatively poor value for cash back, especially using cards that give greater value when redeeming for travel, or you really stretch the value of your transferrable points by booking via airline and hotel programs.

There is no right or wrong way to redeem credit card points, but some redemptions will give you a greater rate of return than others. At the end of the day, calculating the value of credit card points is ultimately what helps you decide what the best redemption method is for you.

Editorial Disclaimer

The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

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