An Update to My Valuation of Miles and Points

Last Monday’s post made me sit down and re-evaluate my analysis. Things in this hobby constantly evolve, which includes value of miles and points. The changes are highlighted in red. See this post for the original breakdown. To be clear, value is very subjective, that’s why I use the word “my.” Your value may differ from mine considerably, and it doesn’t make you wrong. Or does it?

Flexible points

1) SPG point– Was -1.5 cents each.  Now-1.75 cents. Why: I was able to redeem for category 2 hotels several times, at a  cost of 3,000 points per night on a weekend. That’s  incredible value. Also, I find last-minute availability better than in IHG program. 

I still would prefer to use 2% cash back card if given a choice, but there is no denying that SPG points are very valuable. The fact that they are so hard to earn means that devaluation every year is usually mild. You can only get one bonus per lifetime which makes these points even more precious.

If I can get an annual fee waived in June, my Amex SPG will stick around for another year. Otherwise, as much as I love this currency, I will have to downgrade it to  a no-fee card.

You get a 25 percent bonus on each  20,000-mile transfer to many airline programs. There are quite a few family-friendly hotels, that are a category 1 and 2. They run  2,000 and 3,000 points per night on weekends.

2) Ultimate Rewards point– 1.25 cents each. There are two reasons for this: Southwest Rapid Rewards transfer and possibility to get 1.25 cents from each point towards travel redemption. So, 1.25 cents per point will be the floor, as long as they have that option.

3) Membership Rewards point  Was- 1.1 cents. Now- 1.25 cents. Why: You can only earn one bonus per lifetime on any given Amex card. Also, the recent 40% bonus transfer to Avios program proves that MR points can give you an edge over Ultimate Rewards in certain areas. All things considered, it’s only fair to value them at 1.25 cents each.

I value BA Avios (a  partner) at around 1 cent.  The miles transfer on 1:1 basis. However, since Amex runs transfer bonuses, I would be willing to pay a little more for a Membership Rewards point.

Keep in mind, it assumes I am buying speculatively; otherwise, the valuation would  be higher. I find Avios to be extremely handy for short-haul redemptions around USA, trips to Caribbean and some routes to Europe. However, there is always a risk of award chart changes, so I factor it in here.

Airline miles

1) Most traditional airline miles–  around 1 cent each. I would be willing to pay a little more for AAdvantage.  I wouldn’t pay 1 cent for Delta Sky miles, but probably 0.8 cents.

2) Southwest Rapid Rewards point– 1.25 cents each, because  you can officially get 1.43 cents per point and  closer to 1.61-1.69 cents, factoring in tax.

Hotel points

First, be very careful when buying or hoarding hotel points. It is the most vulnerable type of currency in this hobby. Rates sometimes can go up overnight with no prior notice.  I usually book 2  or 3 rooms because we travel with my in-laws, so my valuation is influenced by that fact. However, my husband and I go on short  trips by ourselves occasionally.

1) Hyatt Gold Passport– Was -0.7 cents each. Now- 1 cent Why: There are a couple of category 1 Hyatt hotels I’m interested in. Those run at  5,000 points per night, so based on my value, they would cost only $50. Also, the program seems fairly stable (cough, Marriott and Club Carlson, cough.)

Their high-end properties go for 30,000 points and cost 800 dollars, but I won’t be staying there any time soon. I am mostly interested in hotels close by or cities I might be visiting in a near future.

2) IHG point– 0.3 cents each. See this post. My value would be  lower if it wasn’t for their PointBreaks program, where you can get hotels for only 5,000 points per night. Most hotels on the beach in Florida go for 35,000 points, a significant amount.

If the PointsBreaks  program is discontinued, my value will drop as well.  I would be very cautious on stockpiling speculatively, though, due to huge amounts of points they are giving out through IHG Big Win promotion. It can only mean one thing – devaluation.

3) Marriott point– 0.4 cents. (my value would be a bit higher if redeeming for air+hotel package. Read more HERE) Most Marriotts I am interested in run at 20,000-30,000 points per night.  There are quite  a few in USA that cost 10,000 points, so it could be a good deal, even if you needed 2 rooms. It would be an equivalent of paying 80 dollars per night.

4) Club Carlson point– Was-0.25 cents. Now-0.2 cents. Why: Originally, I planned to raise it to 0.35 cents. My husband and I were both approved for Club Carlson Visa Signature credit card. Currently, it gives you second night free on award redemptions, but only for the next few months. 

In light of this new development, I lowered my speculative purchase price to 0.20 cents due to the fact that I no longer trust Club Carlson program. Most hotels I like cost between 28,000 and 44,000 points, quite steep.

Without the “second night free” perk, I can’t see myself paying more than that. I do plan to renew the card since it gives 40,000 points after paying $75 annual fee. It means I will effectively be getting them for 0.18 cents each. At this price, I’m still a buyer, at least for now.

BTW, I was able to call and get my first year annual fee of $75 refunded after complaining about this “bait and switch” move. Apparently, the agents are given OK to do it. Call and ask, and insist on getting a refund. The bank should live up to the terms of the contract at least for 12 months after paying the annual fee. Threaten to escalate with a letter to CFPB. 

For those thinking about applying for this card, there is  a clear opportunity here.

5) Hilton HHonors point– 0.25 cents each. Hotels I like cost around 40,000 points, and I would be willing to pay no more than $100  for them.

Lessons going forward

To reiterate, this is only my personal opinion. The assigned value is based on what I would speculatively pay for any specific currency. If I had  a redemption in mind, it would change things considerably. When  you are short of few miles or points for an award, value goes up tremendously. That said, if you are buying points that you don’t plan to use for years, the value is much closer to zero. Earn and burn!

For non-bonus categories, it’s hard for me to justify using anything other than a 2% cash back card. In fact, few weeks ago, I had a debate on this very subject with a writer of a well-known blog. He claimed that Club Carlson point is speculatively worth at least 0.6 cents if you have their co-branded credit card. I objected and asked what would happen if the program took away “second night free” benefit. No answer was given.

This isn’t meant as some sort of a snipe since blogging is personal. We are giving our own opinions. Still, readers rely on us to provide guidance. It’s important to stop and think before telling people that using Club Carlson card for everyday spending is equivalent to getting 3% cash back. Even with “second night free” benefit, this was way too optimistic.

Hotel point is the most vulnerable type of currency in this hobby. Think about it. The redemption rate is not assigned to a route, but rather each individual property. It’s much harder to track, which lends itself to abuse and lack of transparency.

That’s why Club Carlson Visa never made it on my main list of “keeper”  cards, and even back in 2013 I said in my post that this rate of return is not sustainable and BOGO benefit will most likely be taken away eventually. Additionally, many report that some popular Club Carlson properties are now all of a sudden costing 75,000 points instead of the usual 50,000 points. No notice, nothing. Club Carlson has printed too many points and is now trying to limit its losses.

I think the events of the previous week have proven how easily a program can be gutted. Sure, we have a few months to use this benefit. But let’s get real, often times, regular families with regular jobs can’t plan trips far ahead. I’m sure  for most of you, vacations are already set for the rest of this year. Perhaps your flights are booked and there aren’t any Club Carlson properties at your destination. And next year vacation plans will have to wait till your boss approves them in December.

To me, the only cards that come close to 2% return are Amex SPG (point worth 1.8 cents) and possibly Amex EveryDay Preferred. The latter earns 1.5 Membership Rewards points on everything, as long as you have at least 30 transactions per month. Considering I value each MR point at 1.25 cents, it would effectively mean getting 1.88 cents per dollar. For simplicity sake, I could see myself sticking to just that one card. Of course, none of this applies because most of my spending goes toward sign-up bonuses.

Readers, is your value of miles and points similar to mine?

Click here to view various credit cards and available sign-up bonuses