What are Points and Miles Worth? (“Normal People” Edition)

Out of all the important concepts in the miles and points hobby, your individual valuation of specific currencies should probably be at the top of the list. This is a complicated subject and there is no definitive answer that will apply to every single person out there.

Very often you will see professional miles and points bloggers share their own currencies’ valuation which can be helpful, no doubt. However, it’s important to keep things in perspective. Ask yourself this question: Is your lifestyle/income similar to this particular person?

Of course, it’s not like bloggers share their income with readers (and they certainly have no obligation to do so!)  But you can definitely make assumptions based on places they visit, hotels they stay at, as well as frequency of their trips.  Those who run a  blog that specializes in review of business class seats/fancy hotels and make a living doing so, are incentivized to value their miles/points higher than the average Joe.

This is the type of content that brings them the most page views and potential credit card applications, so they are unlikely to part with their stash unless they feel it will deliver solid ROI. And I don’t blame them! Trust me, very few people in this hobby are interested in my reviews of condos, Holiday Inn properties or flights in coach.

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p style=”text-align: center;”>Burning AAdvantage miles on this “blast from the past” condo in the Keys at one cent apiece? Why not! You like, you like? I didn’t.

Higher valuations also make it easier to sell, er… promote credit cards. “This bonus is worth $1,000” sounds a lot better than “this bonus is worth $500”, doesn’t it?

Don’t get me wrong, I’m not opposed to “selling” credit cards. I do it myself via affiliate marketing and make no apologies. As long as it’s good for reader, why not?

But you can see how this system can encourage bloggers to get carried away and dabble in fuzzy math.

You’ll often see numbers like these on major sites: UR point is worth 1.8-2.1 cents, Hyatt point is worth 1.8 cents, and so on and so forth. While I have  no doubt that these valuations make sense for some, they have absolutely nothing to do with my reality. These numbers are based on business/first class redemptions and top Hyatt properties that I’m unlikely to visit, well, ever.

Don’t get me wrong, I LOVE a little bit of luxury myself and don’t mind splurging now and again. But this type of travel would simply not be sustainable for my family on a regular basis. So  I  encourage you to seek out bloggers who have a lifestyle similar to yours.

Are you a frequent high-income traveler with a flexible schedule, who mostly prefers fancy hotels and airline seats? In that case, Miles For Family blog will probably be of limited use to you. But if you enjoy occasional “lady blogger” rants, please, stick around anyway!

Are you a middle-class person who travels only few times per year and likes to find ways to stretch miles and points?  Welcome! I believe you are in the right place. Notice that I didn’t mention that you have to have kids in order  to benefit from our content. It’s true, a lot of our posts are focused on travel with young children. But I truly believe the principles apply to anyone who is on a tight budget. Plus, a family can consist of only one or two people.

If you are new to this hobby and have no idea on how to value miles and points, I recommend you read these three posts:

My personal valuation of miles and points

Why you should treat your hotel points like you would stocks

Using Hotel Hustle data when speculatively accumulating hotel points

Short version: I value most mileage currencies at 1 cent, flexible points at around 1.25 cents, and hotel points at between 0.2-1 cents. What it means is if a potential redemption will give a bit higher CPM/CPP (cents per mile/point), I’m very likely to part with my stash.

Let’s say someone offered me 70,000 Club Carlson points or 10,000 SPG points. Right now I would pick the latter without any hesitation. So, bigger numbers in miles and points hobby sometimes mean nothing. It’s all about value you can extract from them. But let’s say I had plans to stay 4 nights in a location that had a category 2 Club Carlson property (15,000 points per night) and nothing in SPG chain. In that case I would certainly go for 70,000 Club Carlson points stash.

So, my valuation is fluid and yours should be too. It will change depending on our circumstances. In the past, I have transferred MR points to Plenti program and got only 1 cent per point in value. During that time it made sense to go this route, but I wouldn’t do it now.

Similarly, if you are not sure when to redeem and when to hold on to your miles/points, I recommend you consider these five things:

1) How much do you currently have in your savings account?

This is the most important question to ask, IMO. Let’s say someone has no $ emergency fund and has to fly last minute to visit a sick relative. This person can either spend 50,000 AA miles or pay $400 for the direct flight to that city. I would say: Burn the miles, dude! You are in no position to bargain. Once you have some savings put away, you can be more picky with your redemptions.

Sure, spending 50,000 miles on a $400 flight isn’t ideal. But beggars can’t be choosers. If your car breaks down, you won’t be able to use miles to fix it. I would also recommend that this person focuses exclusively on cash back offers (and flexible points easily convertible to cash) for the next few years.

2) How often do you travel?

If you might not otherwise use your miles/ points for two or three years, it may be best to settle for less than ideal redemption right now. Saving real cash will give you flexibility to use it for other expenses or to invest it. As a popular  expression goes: a bird in a hand… and you know the rest.

Those who have to travel frequently or perhaps live on the road should be more picky with their redemptions. After all, another opportunity to “liquidate” their stash is just around the corner. In essence, their miles and points are as good as cash. But they are NEVER as good as cash for someone like me. We could cut back on travel or stop going places altogether if we had to. But we still have to eat several times per day and put gas in our cars.

3) Would you still pay cash for this hotel/flight if miles and points weren’t available?

Let’s say  a hotel  costs 40,000 IHG points, but has  a revenue rate of $140 all-in. It’s definitely not a mind-blowing redemption. However, if you didn’t have IHG points, would you still pay for this very same hotel? Or would you reserve a rental via AirBnB? Do you normally prefer vacation rentals and only use hotel points to save cash?

Of course, it does depend on how you’ve acquired your IHG points. If you bought them for 0.5 cents apiece, then redeeming them on this particular hotel would cause you to lose money. On the other hand, if you got them via sign-up bonus, then your investment isn’t all that huge, aside from meeting minimum spending requirements.

4) Are you planning to cancel a credit card associated with this specific stash of points?

This mostly applies to flexible currencies. Citi Thank You program is the worst in this respect because no matter what you do, the points earned from the canceled card will expire in 60 days. So, rather than renewing the card and paying a fee, you may want to consider spending down your stash.

5) Do you currently happen to have elite status with an airline/hotel chain?

Some programs offer meaningful benefits to their elites, which could make using that particular  currency desirable. I’m not a status chaser by any means, but occasionally find myself getting it either via match or credit card. I like freebies just as much as anyone else.

But be careful not to overvalue the perks. Free breakfast is nice, but if you are staying in a big city, how hard is it to walk outside and grab a bite to eat at a local cafe? While suite is great when traveling with kids, do you really need it for one or two people?

It does depend, of course, and we’ve had some nice breakfasts and upgrades  due to elite status. In fact,  I got a little carried away and booked way too many stays in Hyatt properties in 2016 due to Diamond status. As with everything in life, balance is key.

Bottom line

In general, I encourage you not to assign value to miles and points based on bloggers’ opinions. And yes, that includes me. Every situation is different. A frequent traveler with high income will find my valuation to be too low. That’s fair. By the same token, a person with a large family and lower middle-class income will find it way too high.

I will be the first one to admit that I have made mistakes  redeeming miles when perhaps I should have paid cash and vice versa. It’s a work in progress, just like this blog. Still, I  recommend that you don’t irrationally hold on to your miles and points. Sure, you may get better value from them down the road. But if you can save decent amount of money right now, why not consider parting with your stash?

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