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People tend to focus on how to earn the most possible credit card rewards. But once you earn them, you may be asking yourself, what should I spend my credit card points on? Banks, airlines, and hotels offer many redemption options, but not all of them are good values.
Credit card rewards can be very valuable when used the right way. Before making a redemption, you should calculate what you’re getting for your points. It often helps to compare the value you're getting for your points against the money you'd receive if you had used a cash back credit card for your purchases instead.
In this article, we'll show you how to calculate the value of your credit card rewards and to determine whether or not a redemption offers good value.
How to calculate the value of your credit card rewards
Not all rewards are created equal. This can make comparing points and miles earned from different credit cards and loyalty programs difficult. However, when you redeem your credit card rewards, it is important to know whether or not you are getting a good deal.
When evaluating a redemption option, there is an easy way to calculate the value of your points:
Simply divide the cash price of the redemption by the number of points required.
Determining this value will help you compare different redemption options. You can even compare points from competing loyalty programs to help you determine which points you want to spend.
3 credit card reward calculation examples
The value of a point or mile changes from one program to the next. Here are three examples of how to calculate the value you're getting from your credit card rewards.
Reserving a room using Marriott Bonvoy points
I recently booked a trip to Chattanooga to see the Christmas lights at Rock City. The hotel room was $180 + taxes and fees or 35,000 points. With taxes and fees, the total was $211.05. To calculate the value of points, divide $211.05 by 35,000 points. This gives you a value of 0.6 cents per point. With an average value of 0.8 cents per point based on our reader's feedback, this is considered a poor redemption because you're getting a value of 0.6 cents from your points.
Booking a flight using American Airlines AAdvantage miles
Booking international and premium cabin tickets are usually a great way to use your airline miles. Consider booking a flight to Milan, Italy, from the U.S. to explore the culture and cuisine in the land of pasta.
I found a flight for 45,000 miles and $52.35 in taxes leaving from Miami in April 2020.
This same flight would cost $749.03 if you were to pay cash.
To calculate the value of your points, take the cash price ($749.03) and subtract the taxes owed ($52.35) for a total of $696.68. Divide that total by 45,000 miles, and you get a value of 1.5 cents per mile. We value American Airlines AAdvantage miles at 1.4 cents each based on our experience, so this redemption is slightly above average.
Shopping at Amazon using Citi ThankYou points
I shop on Amazon often for the prices, selection, and convenience. Programmable thermostats are a great way to save money and remotely control the temperature of your home while traveling. In this example, I shopped for a Nest 3rd Generation smart thermostat and was presented with an option to pay with my Citi ThankYou points. Let's see if it is a good deal or not.
The total purchase price for the Nest is $218.49, and Amazon says that I can use 27,311 Citi ThankYou points instead. To determine the value, divide $218.49 by 27,311 to arrive at a value of 0.8 cents per point. For example, Citi ThankYou points can be redeemed at one cent per point for cash back, or possibly more by transferring them to one of 15 airline partners. In this example, you're giving up at least 20% in the value of your points by shopping online at Amazon.
A better option is to shop online through a credit card portal to earn extra cash back or rewards in addition to what you’re earning with your purchase.
How to spend your credit card rewards
Now that you've seen some examples of how to calculate the value of your credit card rewards, let's go over some of the best ways to spend your miles and points.
Reserving hotel rooms with co-branded cards
Reserving a hotel room with a co-branded card is usually great points redemption. These points are designed to be used within the hotel's loyalty program, so that's where you'll find the best value.
The Marriott Bonvoy program has more than 7,000 hotel rooms across 30 brands around the world. It is a safe bet that one of its hotels is located in the destination that you want to travel to. Marriott uses peak, off-peak, and regular pricing on award redemptions, so prices on hotel stays will vary based on when you're traveling. This also means that how much Marriott points are worth will vary, so it will literally pay to do your research.
Marriott offers the 5th night free when booking rooms using points, which is a great perk. This gives you 20% off the normal number of points required for a 5-day stay. Plus, it’s a great reason to extend your vacation another day. Pair these savings with the complimentary Marriott Bonvoy Platinum Elite status from the Marriott Bonvoy Brilliant® American Express® Card for a vacation to remember.
Booking premium class flights
Premium-class flights can be notoriously expensive when you’re paying with cash. This is especially true for international Business and First Class flights. When you use airline miles to book these flights, however, you can redeem your rewards for extraordinary value.
I've been able to redeem miles for some fantastic international Business Class flights over the years. For example, I recently transferred Chase Ultimate Rewards points to AirFrance KLM Flying Blue to fly to Europe. My daughter and I flew in Business Class from Chicago to Brussels for only 39,500 miles each one-way.
Transferring points to airline and hotel partners
Flexible currency points from banks like Chase, Citi, and American Express are often most valuable when you transfer to their partners. In most cases, your points transfer over on a 1:1 basis so you don't have to deal with complicated math.
For example, you can transfer Chase Ultimate Rewards points to the World of Hyatt hotel loyalty program on a 1:1 basis. If you used the Chase Travel℠ portal, 20,000 points are worth $300 if you have the Chase Sapphire Reserve®. However, when transferring them to Hyatt, those 20,000 points will get you one free night at an all-inclusive resort in Mexico.
The Hyatt Ziva Los Cabos and the Hyatt Ziva Puerto Vallarta are only 20,000 points per night each. The nightly rate for a weekend stay in Cabo is $373 per night plus taxes and fees. In this case, you're getting much better value by transferring your points to Hyatt than booking through the Chase Travel℠ portal or getting cash back.
Paying for flights with Chase Ultimate Rewards
One of the problems with using miles to book airline tickets is that you don't earn miles or elite status for your flight. When you use your bank flexible points to book flights, however, the airlines consider that booking to be the same as a cash booking. So, if you book with flexible points, you'll earn miles towards your next free flight. Plus, you'll also receive segment credits and qualifying spend dollars towards elite status.
Redeeming for experiences
Experiences can be hit or miss in terms of value when you’re redeeming your credit card rewards. Credit card companies change the available experiences frequently, so it makes sense to bookmark the experience pages from your favorite loyalty programs and check back regularly.
For example, a Marriott Bonvoy Moment offering a luxury box suite tickets to see the Harlem Globetrotters at the STAPLES Center in Los Angeles is available for 50,000 points. You and a guest have access to the suite and get to enjoy complimentary food and beverages while you're there. These luxury suite tickets are usually not for sale to the public, so this is a unique experience to enjoy.
The worst ways to spend your credit card rewards
Using your points instead of cash can seem like a good option because you're keeping your cash in your wallet. However, you've worked hard to earn those points, and it doesn't make sense to receive poor value when you redeem them. Here are some redemptions to avoid when using your credit card rewards.
Purchasing gift cards
Gift cards are an option with almost every credit card rewards program. In some cases, you can get a one cent per point redemption value for a gift card, but many options are substantially below this amount.
For example, American Express Membership Rewards points can be redeemed for gifts with values ranging from 0.5 cents to 1 cent per point.
Buying merchandise
Shopping with your points is typically a terrible idea. Prices in credit card shopping portals don't always match what you can find at your local store or online retailers. Plus, point values are usually very low.
If you wanted to shop the American Express store, your points would only be worth 0.5 cents each.
Statement credits
Statement credits are a way to reduce your outstanding balance. However, redeeming your points for statement credits doesn’t offer great value. Redemptions can range from 0.6 cents per point via American Express to one cent per point with Chase. In both situations, you are better off redeeming for travel or transferring to an airline or hotel partner to get more value from your credit card rewards.
Online shopping
Chase, Citi, and American Express have partnered with Amazon to allow you to shop with your points. Amazon offers good prices and fast shipping, but that doesn't make up for how poor of a redemption this is.
American Express Membership Rewards points are worth 0.7 cents per dollar when you use your points to pay for your Amazon order.
Transferring miles to friends and family
You may be tempted to transfer your airline miles to a friend or family member as a gift or to help them out. Instead, you would be better off booking a flight for them from your account to avoid the fees that airlines charge.
United Airlines is a Chase Ultimate Rewards transfer partner. If you want to transfer miles from one United account to another, the airline will charge you $7.50 per 500 miles transferred plus a $30 fee. A transfer of 30,000 miles would cost you $480.
To avoid those fees, book the flight using your account or add your family member as an authorized user on your Chase card. Authorized users can transfer points to their loyalty accounts without incurring a fee.
Six credit cards that offer great rewards
We've selected several credit cards that offer great rewards for you to earn and redeem.
Chase Sapphire Reserve®
Frequent travelers love the Chase Sapphire Reserve® because it earns 5X points on flights and 10X points on hotels and car rentals when you purchase travel through Chase Travel℠ immediately after the first $300 is spent on travel purchases annually; 3X points on other travel and dining & 1X points per dollar on all other purchases.
It also offers users a $300 annual travel credit and offers perks like airport lounge access, DoorDash credits, and two free years of Lyft Pink All Access (activate by Dec. 31, 2024).
The points are worth 1.5 cents when redeemed for travel through Chase Travel℠ and can be transferred to airline and hotel partners. These premium benefits come with an annual fee of $550 .
Chase Sapphire Preferred® Card
The Chase Sapphire Preferred® Card offers tremendous value to cardholders. With this card, you can earn 5X points on travel purchased through Chase Travel℠; 3X points on dining, select streaming services, and online groceries; 2X points on all other travel purchases, and 1X points on all other purchases.
Points are worth 1.25 cents towards travel when redeemed through the Chase Travel℠ portal and can be transferred to airline and hotel partners. Each year on your card anniversary, you will also earn bonus points equal to 10% of the total purchases you made in the previous year.
The annual fee of $95 is much lower than that of some premium travel cards, but it does not offer a travel credit or airport lounge access.
Citi Strata Premier℠ Card
Citi ThankYou Points can be used to book flights, redeemed for gift cards, used for online shopping, or transferred to one of 14 airline transfer partners. These airline transfer partners include JetBlue, Virgin Atlantic, and Singapore Airlines KrisFlyer. With the Citi Strata Premier℠ Card, you will earn 10X points on hotels, car rentals, and attractions booked on CitiTravel.com; 3X points on air travel and other hotel purchases, at restaurants, supermarkets, gas and EV charging stations; and 1X points on all other purchases. The Citi Strata Premier Card also has a $95 annual fee.
Marriott Bonvoy Brilliant® American Express® Card
This premium hotel credit card provides complimentary Marriott Bonvoy Platinum Elite status, and you can earn up to 6X points on your spending. You can earn 6X points on eligible purchases at hotels participating in the Marriott Bonvoy® program, 3X points at worldwide restaurants and on flights booked directly with airlines, and 2X points on all other eligible purchases.
The Marriott Bonvoy Brilliant® American Express® Card provides up to $300 in annual (up to $25 per month) statement credits for eligible dining purchases, one free night worth up to 85,000 points, and a Priority Pass membership. Select benefits require enrollment. Points can be used to book hotels or flights. The Marriott Bonvoy Brilliant comes with an annual fee of $650.
Chase Freedom Flex®
The Chase Freedom Flex® is marketed as a cashback credit card that earns up to 5% cash back on quarterly rotating categories. However, the rewards can be turned into Ultimate Rewards points and used to book travel. When paired with other Ultimate Rewards credit cards, like the Chase Sapphire Reserve, you can also transfer points to airline and hotel partners. The best part: this card comes with a $0 annual fee.
Blue Cash Preferred® Card from American Express
The Blue Cash Preferred® Card from American Express is a pure cash back credit card that earns up to 6% cash back on your purchases. With this card, you'll earn 6% cash back at U.S. supermarkets (for first $6,000 per year, after that 1%) and on select U.S. streaming services, 3% cash back at U.S. gas stations and on eligible transit, and 1% cash back on other eligible purchases. You can also earn additional rewards and statement credits when you register for exclusive Amex Offers (enrollment required for each offer) at participating merchants. The Blue Cash Preferred Card has a $0 intro annual fee for the first year, $95 per year thereafter.
| Card name | Bonus offer | Reward details | Annual fee | Best redemption methods |
| Chase Sapphire Reserve® | Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening | 5X points on flights and 10X points on hotels and car rentals when you purchase travel through Chase Travel℠ immediately after the first $300 is spent on travel purchases annually; 3X points on other travel and dining & 1X points per dollar on all other purchases | $550 | Airline travel, hotels, points transfers |
| Chase Sapphire Preferred® Card | Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening | 5X points on travel purchased through Chase Travel℠; 3X points on dining, select streaming services, and online groceries; 2X points on all other travel purchases, and 1X points on all other purchases | $95 | Airline travel, hotels, points transfers |
| Citi Strata Premier℠ Card | For a limited time, earn 75,000 bonus ThankYou® Points after spending $4,000 in the first 3 months of account opening, redeemable for $750 in gift cards or travel rewards at thankyou.com | 10X points on hotels, car rentals, and attractions booked on CitiTravel.com; 3X points on air travel and other hotel purchases, at restaurants, supermarkets, gas and EV charging stations; and 1X points on all other purchases | $95 | Airline travel, hotels, points transfers |
| Marriott Bonvoy Brilliant® American Express® Card | Earn 95,000 Marriott Bonvoy® bonus points after spending $6,000 in purchases in the first 6 months | 6X points on eligible purchases at hotels participating in the Marriott Bonvoy® program, 3X points at worldwide restaurants and on flights booked directly with airlines, and 2X points on all other eligible purchases | $650 (Terms apply) | Hotels, transfers to airlines |
| Chase Freedom Flex® | Earn a $200 Bonus after you spend $500 on purchases in your first 3 months from account opening | 5% cash back on rotating quarterly categories you activate (on up to $1,500 spent) and travel purchased through Chase Travel℠; 3% cash back on drugstore purchases and dining at restaurants (including takeout and eligible delivery service); and 1% cash back on all other purchases | $0 | Cash back, points transfers |
| Blue Cash Preferred® Card from American Express | Earn a $250 statement credit after spending $3,000 on eligible purchases in the first 6 months | 6% cash back at U.S. supermarkets (for first $6,000 per year, after that 1%) and on select U.S. streaming services, 3% cash back at U.S. gas stations and on eligible transit, and 1% cash back on other eligible purchases | $0 intro annual fee for the first year, $95 per year thereafter (Terms apply) | Cash back is received in the form of Reward Dollars that can be redeemed as a statement credit or at Amazon.com checkout |
Common questions about redeeming credit card rewards
Credit card rewards can be confusing because there are so many different programs, values, and rules. These are some of the most common questions readers have when trying to figure out how to spend credit card points.
How much are 20,000 Chase Ultimate Rewards points worth?
Chase Ultimate Rewards are a popular flexible rewards currency. Their value depends on how you use them and which credit cards you have. You can book flights, hotels, rental cars, and other travel items through the Chase Travel℠ portal using your points. If you have the Chase Sapphire Reserve®, points are worth 1.5 cents each when redeemed for travel booked through the Chase portal, so 20,000 points could be worth up to $300 in travel. However, if you have the Chase Sapphire Preferred® Card or Ink Business Preferred® Credit Card, points are worth 1.25 cents each when redeemed for travel booked through Chase, which means they'd be worth up to $250 in travel.
You may be able to redeem your points for even higher values by transferring to one of Chase's travel partners to book award reservations.
How do I redeem my Chase Ultimate Rewards points?
The easiest way to redeem your Chase Ultimate Rewards points is to use the Chase Travel℠ portal. You can access it while reviewing your accounts at Chase.com or visiting UltimateRewardsPoints.Chase.com.
When you log in, you'll be presented with numerous options to redeem your points. These options include shopping at Amazon, getting cash back, transferring to partners, or booking travel.
Which is better: cash back or rewards points?
Whether you want a card that offers cash back or rewards points is a personal choice, and it depends upon how you use your rewards. Cash back is attractive because it is flexible and can be used for anything. You can pay your bills, save and invest the money, or buy things that points cannot. Additionally, sometimes it makes sense to use cash to book a flight or hotel room because the points' prices are too high.
Airline miles and hotel points are not as flexible as cash. However, they do have one advantage: you can redeem them for much higher values when booking certain hotels and flights. Often, the best values can be found in luxury redemptions, such as Business and First Class flights.
Is there a fee when redeeming credit card rewards?
When you redeem credit card rewards for travel, gift cards, and statement credits, you usually won’t be charged a fee. There are also no fees for transferring Chase Ultimate Rewards and Citi ThankYou points to their respective airline and hotel transfer partners.
However, American Express charges an excise tax offset fee of $0.0006 per point (maximum of $99) when making a transfer to its travel partners. In most cases, this fee ends up being rather small. For example, if you were to transfer 50,000 Membership Rewards points to Cathay Pacific, your total fee would be $30.
Can I combine my credit card points?
You cannot combine credit card points from different banks into one account. However, you can combine your points when you have multiple credit cards that earn the same types of points. For example, if you have the Chase Sapphire Reserve and the Ink Business Preferred, you can move points back and forth between those accounts with no fee.
If you want to book a flight on Cathay Pacific, you can transfer points from different programs into that airline's loyalty program. For example, you can transfer points from both American Express Membership Rewards and Citi ThankYou into this mileage program to book a flight. This comes in handy if you don't have enough points in one program to book an award flight.
The final word on redeeming credit card rewards
The best rewards credit cards can offer tremendous value when you spend your miles and points wisely. Before redeeming your rewards, perform a quick calculation to see how much value you are getting for your points. Take the cash price and divide by the number of points required to find your answer.
It is OK if you're not squeezing every last drop of value from your points, but it is important to understand their value and make wise choices about how you spend them. Otherwise, a straightforward cash back card may be a better option for your spending.
Lucrative, Flat-Rate Cash Rewards
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Current Offer
$200 cash rewards bonus after spending $500 in purchases in the first 3 months
Annual Fee
$0
Rewards Rate
Earn unlimited 2% cash rewards on purchases