How to value the frequent flyer points you intend to collect
I value the points at about 1.5¢/point based on what I spend those points purchasing. –Kyle Stewart
That was a very interesting line to read because it’s something I, a beginner in travel hacking, would never have thought to consider.
The value of a point is not something intrinsic to the program, but rather how you intend to use the points.
Simply put, the valuation a point carries will become the benchmark used to make decisions on what is worth your time and money.
Create your own valuations
In fact, perhaps before opening a credit card and committing to the required spend to get those points, it is worth it to practice calculating the valuation of several potential bonus points. You might discover that the way you’d use points in one program would actually be worth more to you.
Doing this before committing sounds like great practice where the fear of messing up won’t be allowed.
Calculating the point valuation
Let’s look at a real world example for practice.
The opportunity is to get 50,000 points. You could redeem those points for:
So for cash back, you can instantly see the baseline point value is $0.01. You can also see there’s a slight bonus for using the card’s travel portal, raising the valuation to $0.0125.
A real-world example
What does knowing this do for us?
Focus is everything