How to Calculate the Value of a Point (And Why It Matters)
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How to Know If You’re Getting a Good Deal with Your Points
Ever wonder if you’re actually getting a good deal when you use your points? You’re not alone. I get this question a lot—and the truth is, not all points are created equal. A quick calculation can help you decide whether to hit redeem or save those points for something better.
If you're just getting started with travel rewards, I go over all of this (and more) in my Beginner’s Guide to Points and Miles, but let’s walk through the basics here.
Why Point Value Matters
Think of points like money with different exchange rates. For example, 1,000 points from one program might be worth twice as much as 1,000 from another. A flight might give you incredible value, while redeeming those same points for a gift card? Not so much.
If you want to make the most of what you’ve earned, knowing the value of a point is key.
The Easy Math: How to Calculate Point Value
Here’s the formula I use all the time:
Cash Price ÷ Points Required = Cents Per Point
So, if a flight costs $500 or 50,000 points:
$500 ÷ 50,000 = 0.01, or 1 cent per point.
That’s a pretty solid baseline. Generally, I try to aim for at least 1.5 cents per point when redeeming for flights or hotels—sometimes even higher.
Examples You’ll Actually Use
Let’s look at a few real-world examples:
Flight Redemption
You find a roundtrip economy flight to Europe for $800 or 50,000 airline miles.
$800 ÷ 50,000 = 1.6 cents per point.
That’s above average, so I’d call that a win.
Hotel Redemption
You’re looking at a hotel that’s $300 per night or 50,000 points.
$300 ÷ 50,000 = 0.6 cents per point.
That’s lower than average for hotel points, so you might want to pay cash and save your points.
Gift Card Redemption
A $50 gift card costs 5,000 points.
$50 ÷ 5,000 = 1 cent per point.
Not terrible, but not amazing either—especially compared to what you could get by transferring those points to travel partners.
Want Better Value from Your Points?
Here are a few of my favorite ways to stretch them further:
Transfer to Travel Partners
Some cards let you transfer points to airline or hotel programs where the value jumps. I’ve gotten redemptions worth 2–3 cents per point this way, especially when booking with programs like Hyatt or Flying Blue.
Watch for Sweet Spots
Programs often have little “tricks” built in—like using fewer miles for short-haul flights or off-peak hotel stays. Knowing about these can make a huge difference. If you haven’t yet, check out my post on how to use shopping portals to add even more value while earning.
Look for Transfer Bonuses
Every once in a while, programs offer transfer bonuses (like a 20% bump when you move points to a specific airline). These promos can make your points go a lot further—and I always share the best ones in my weekly newsletter, so make sure you’re on the list!
Avoid the Tempting (but Low Value) Options
Using points for cash back, merchandise, or gift cards may be easy, but it often gives you the lowest return—usually under 1 cent per point. If you’re saving for travel, hold out for those redemptions that give you more bang for your buck.
Final Thoughts
You work hard to earn your points—so don’t waste them. A quick value check before you redeem can help you avoid low-value options and save those rewards for a trip that really moves the needle. Once you get the hang of it, you’ll spot a “good” redemption in seconds.
Want to see which cards earn the kind of points that stretch furthest? Here’s a list of some of my favorite travel rewards cards:
👉 Check them out here
And if you’re looking for more hands-on help, come join me on Instagram, hop into the Facebook group, or grab my step-by-step beginner’s guide. You’ve got this—and I’m here to help every step of the way.
Editorial Disclosure: Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed, or approved by any of these entities.
Advertiser Disclosure: The Rewards Mom has partnered with CardRatings for our coverage of credit card products. The Rewards Mom and CardRatings may receive a commission from card issuers.
