In short: cents per point = (cash price − taxes and fees on the award) ÷ points × 100. If the answer doesn't clearly beat what your bank pays for cashing out (0.5 to 1 cent), take the cash.
Every "is this a good redemption?" question comes down to one number: cents per point.
(Cash price − taxes and fees on the award) ÷ points × 100 = cents per point
Amex cash|
Chase cash|
Good transfer
A worked example
A flight costs $600 in cash. The same seat costs 30,000 miles plus $5.60 in taxes.
($600 − $5.60) ÷ 30,000 × 100 = about 2 cents per point.
Now the same seat at 60,000 miles plus $200 in taxes and fees:
($600 − $200) ÷ 60,000 × 100 = about 0.7 cents per point. Worse than cashing out from most banks.
What to compare it with
Your floor is what the bank gives you for doing nothing clever:
| Program | Cash out | Travel portal |
|---|---|---|
| Chase | 1¢ | 1¢, up to 2¢ with Points Boost |
| Amex | 0.6¢ | 1¢ on flights |
| Capital One | 0.5¢ | 1¢ |
| Citi | about 1¢ | 1¢ |
| Bilt | about 0.55¢ | not checked |
If your redemption doesn't clearly beat the floor, take the cash or portal value and keep it simple.
Two things people forget
- Use the price you'd actually pay. A $9,000 first class fare you'd never buy isn't worth $9,000 to you.
- Count the ratio. If the transfer isn't 1 to 1, use the bank points it takes, not the airline miles. A Hyatt night at 15,000 points takes 20,000 Chase points from a Sapphire Preferred, because that transfer is 4 to 3.
The same math, for hotels
Hotel awards usually have no taxes on the points part, so it's just the cash rate divided by the points. A $300 night for 25,000 points is 1.2 cents per point. Remember to compare the cash rate with taxes included, since that's what you'd pay.
Where to go next
- Check a transfer bonus with the same idea: is that transfer bonus actually worth it?
- See which programs your points can reach: where your points can go.