# What is a Credit Card Point Worth?

/## Basic Math, Plus Some

A major part of points travel is determining the value of your credit card points. At the very basic level, it is simple math. However, when redeeming for luxury travel, there is also a subjective component to point valuations.

My current point valuations can be found on the blog sidebar. These point valuations tell you how much each credit card point, hotel point, or airline mile is worth to me. I do not have a list of all the programs out there, just the five programs that I use the most.

So when I say that an American Express or Chase point is worth 1.7 cents to me, it means that If I have 10,000 points on hand, I think of having at least $170 to spend.

How do I determine this?

## Chase Ultimate Reward Points

The math with American Express is a little more difficult, so let’s go with Chase. Chase has Ultimate Reward Points that you can earn from a number of different credit cards. In non-bonus spending categories, you receive 1 Ultimate Reward Point for every dollar you spend. You can redeem each Ultimate Reward Point for cash back at a rate of 1 cent a piece. This is straightforward.

**Cash Back Redemption: 10,000 points equals $100. **

However, if you have the Chase Sapphire Preferred card, you can use your points to book travel through the Chase Travel Portal. You can book a rental car, cruise, flight, hotel, or even vacation package with your points. With the Preferred card, you get a 25% for any point redemption through the portal. So 1 point = 1.25 cents.

**Sapphire Preferred Travel Redemption: 10,000 points equals $125. **

If you have the Chase Sapphire Reserve card, you get a 50% bonus on travel portal redemption. I have this card, so all my Ultimate Rewards Points are worth 1.5 cents each.

**Sapphire Reserve Travel Redemption: 10,000 points equals $150. **

## Transfer Partners

But a 1.5 cent valuation is not the same as my current Chase 1.7 cent valuation. What gives? Well, if you have either the Preferred or Reserve card, you have the option to transfer your points to a whole host of airline and hotel partners.

While this is great in theory, in practice there are only a few partners worth transferring to. Why? That’s because if you transfer points, the goal is to get a points rate of more than 1.5 cents per point. Let’s work through an example.

## Conference 2019

The national podiatry conference will be in New Orleans next year. For some reason, hotel rates are very expensive for the conference days. For example, Saturday night will cost a whopping $679.

Alternatively, I could book the same night for 15,000 Hyatt points. I can transfer my Ultimate Rewards Points to Hyatt at a 1:1 ratio. Points transfer immediately.

If I were to do this (which I did, by the way), I would have much higher redemption rate than 1.5 cents per point. My redemption rate would be $679.53 / 15,000, or 4.5 cents per point. That’s a pretty good redemption rate!

Remember how points are worth 1.5 cents in the Chase Travel portal with the Sapphire Reserve? If I booked the hotel night through the Chase Travel Portal instead, I would have needed to use 45,300 points since 45,300 x 0.015 = $679.50. So I saved 30,000 points by transferring to Hyatt!

## On Average

With the Sapphire Reserve, Chase Ultimate Rewards points are worth at least 1.5 cents per point. In the above example, however, I received 4.5 cents per point.

This is where the subjective part of points valuation comes into play. Personally, I feel that on average I can redeem my Ultimate Rewards points for 1.7 cents each. Sometimes my redemptions are higher or lower, but I think that is 1.7 cents is a fair valuation.

You may value Ultimate Reward points at 1.5 cents each if you only use the travel portal to redeem points. Of course, I think you can gain a lot more value than that.

Hopefully that is a helpful explanation. My conference example is just another reason why I think residents should get credit cards.