Frequent Miler on the Air - What are points worth? Reasonable Redemption Values Explained | Coffee Break Ep97 | 3-17-26

Episode Date: March 17, 2026

There is no single right answer as to what points are worth. With most points, the value depends upon how the points are used. It's often possible to get great value or very poor value from the same types of points. But in this podcast episode, we'll talk about how a "reasonable redemption value" can help you assess the value of your miles and points.(01:20) - How can you evaluate credit card welcome offers without an idea of what points are worth?(02:14) - Reasonable Redemption Values (RRVs) are estimates of how much value you can reasonably expect to get from your points. (03:24) - At Frequent Miler, we use RRVs to calculate...(04:40) - Where do our RRVs come from?(07:14) - Transferable points are a little different(10:18) - The RRV Paradox(13:56) - To see our RRVs, go to frequentmiler.com/rrvVisit https://frequentmiler.com/subscribe to get updated on in-depth points and miles content like this, and don’t forget to like and follow us on social media.Music Credit – Beach Walk by Unicorn HeadsMentioned in this episode:Visit FrequentMiler.com Did you know that Frequent Miller is also a website? At frequentMiller.com, you'll find all the latest deals, news about points, miles, and rewarding credit cards, the single best, Best Credit Cards page on the web, guides to all popular rewards programs, and many other terrific resources. If you'd like to get our posts sent to your email, go to frequentMiller.com/subscribe and sign up for free. https://frequentmiler.com/subscribe/Check out all of our other travel podcasts from around the worldThis podcast is part of Voyascape, a podcast network that brings together the world's best travel podcasts. You can find all of our podcasts from around the world at Voyascape.com. If you are interested in advertising or sponsored content on any of our shows you can find out more at the link below.Voyascape Podcast Network

This is a Voyescape podcast. You can find all of our travel podcasts from around the world at voyescape.com. Welcome to Freakimilers Coffee Break, where we focus on a single topic related to miles and points. And each coffee break is limited to 20 minutes or less or your money back. Today's coffee break. What are points worth? Reasonable redemption values explained. There's no single right answer to what points are worth.

With most points, the value depends on how the points are used. It's often possible to get very great value from your points or terrible value. For example, you might take, let's say, 100,000 airline miles and use it for an incredible international business class, live flat seat experience, or you might use it for, you know, a trip, a domestic trip in economy. And in the first case, you're probably compared to the cash rates, getting unbelievable. valuable value. In the second case, you're probably getting somewhere around. You're often getting less than one cent per point value, depending on the airline mile you use and the situation. Even worse, sometimes you're encouraged to use your points for things like to spend at Amazon. And in those cases, you get really awful value from your points. So overall, the answer to what are points worth is it depends. But there's times we really do. need to know, we have to have some answer, right?

Yeah, absolutely, because how would you evaluate the value of a credit card welcome bonus? How would you decide between signing up for a hotel credit card with Hilton that offers 100,000 points versus a hotel credit card with Hyatt that offers 60,000 points? I mean, you and I know that Hyatt points are usually worth more than Hilton points, but are they worth enough to make the 60,000 point Hyatt offer better than a 100,000 point Hilton offer? you need to be able to compare somehow. And similarly, if you're making a big purchase and you're deciding, well, should I earn three Hilton points or two Hyatt points on this particular big purchase or two Marriott points,

maybe three Hilton points versus two Marriott points, how do you decide? Which one do you go for and why? And so we need some sort of a metric to compare the value of different points. Yeah, totally. So that's why we came up with reasonable redemption values, or RRVs, for sure. short. What our RVs are estimates of how much value you can reasonably expect to get with your points. So it's not a guarantee. You're not necessarily going to get that much, but if you try a little bit to get good value, you should reasonably be able to get that much value or more,

and sometimes a lot more. And it really depends on the points program, whether you could get a little bit more or a lot more, and it depends on the situation. But it's a point value that where we aim to sort of get a midpoint of what the points are worth so that you have some metric to go on. So you can answer questions like those that Nick brought up a second ago. Yeah. And I mean, obviously it depends somewhat on what you value too because like Greg mentioned before getting an amazing business class redemption. But if you don't value flying in business class or you don't travel internationally, those things might not matter as much to you as that domestic trip during a school break or whatever the case may be for you. So we want to find something

in the middle. So we have to figure out how to do that. And then we use that value to determine things like how much is a welcome bonus worth. It gives us an estimated value. How much is this 100,000 point welcome bonus worth? And how much is the return on spend? So if you're getting 3x on dining, what's that worth compared against a cash back card? A percentage, you know, maybe you can get a credit card that offers 4% back on dining or a card that offers three hotel points or transferable points, which is better, which card should you be using? And so we use that for our card displays. So when we have a page, for instance, that shows the best cards to use for dining purchases,

it actually calculates that and figures out, okay, well, the reasonable redemption value of this type of point is worth this much. And so the return on spend is roughly equivalent to this percentage back. And so our RRVs calculate quite a bit. They drive the first year value you see behind different cards because it is what determines the value of a welcome offer. And, of course, they, again, they help us calculate what the return on spend is for various category bonuses. Yeah. So where do these RRVs come from?

We'll be right back with that information and more after this. We hope you're enjoying the Frequent Myler on the air podcast. Did you know that Frequent Miler is also a website? At Frequentmyler.com, you'll find all the latest deals, news about points, miles, and rewarding credit cards, the single best best credit cards page on the web, guides to all popular rewards programs and many other terrific resources. If you'd like to get our posts sent to your email, go to Frequentmiler.com forward slash subscribe and sign up for free. And we're back. Let's talk about where our RVs come from. Where do we get these numbers?

Luckily, we have some partners that we work with that get a lot of data that we use to calculate these numbers. So first for airline miles, we have points path, which is a tool that integrates with Google Flights. And what it does is it shows the user for each flight where Google Flights is showing you the cash rate. Points path shows you the points rate, how much it costs in airline miles to book that same flight. And they preserve all that data from millions of searches that end users are doing. And they give us access to that data. So what we generally do is just look for the midpoint for American Airlines miles. What are those miles usually worth? What's that median value that it's worth? and we take that.

In some rare cases, the median and mean, which are two different ways of calculating averages, are very different. So sometimes we'll take sort of a midpoint between those two. But usually they're close enough that we'll just grab the median and be done with that. So that's for airline miles. For hotel points, another partner, Gondola. What Gondola is, it's a hotel search website, which is designed to, you know, you pick a city where you're looking for a hotel and give it your dates, and it'll show you all the hotels available,

along with the cash rates, but also it'll show you the point rates. And so, again, Gondola has all that information. This is a little different, though. What Gondola is providing for us to calculate our RVs, it's not from end-user search data. It's from them scanning all the hotels in each of the, like,

major loyalty programs, like all the hotels across the world for all dates, like, within the next year or so. And then they let us view the median values, and that's what we use for our RVs. So, you know, the median value for Marriott hotels, for example, across all or thousands of hotels when using points to book that hotel might be around, you know, 0.7 or 0.8 of a cent, and that's what our review will then be for Marriott points. Where things are not as easy as that is with transferable points. So transferable points like from Chase, Amex, Capital One, and others. We love transferable points because what they let you do is acquire those points that are sort of held by the bank. But when you're ready to, when you find a hotel or a flight, that's a good value to book with points or miles, you can transfer to any one of their transfer partners in order to then book that high value award.

So it gives you the opportunity to book all kinds of things that you might not ever have thought you would be able to do. So just for one, like really simple example, you might not have any Air France flying blue miles, but you might see using Pointsbath that a short Delta flight only cost 5,000 Air France miles versus, you know, $400 in cash or 20,000 Delta Sky Miles. So you can then go to your transferable points program and transfer those 5,000 points to Air France and then book that that flight. So, okay, so given all that, where do, how do we come up with the value of transferable points? And the basic answer is it's more of an educated estimate than a data collection. So in this case, what we do is we had long ago pegged Chase Ultimate Awards at

1.5 cents per point as a reasonable value at which to redeem those points. And so we use that as the baseline metric and then we look at each transferable points program and say, is this better than Chase's program? Like maybe they have more valuable transfer partners than Chase does. If so, we bump that up a little bit to 1.55 or 1.6. And similarly, some programs don't have as good of transfer partners as Chase. So we lower it down a little bit, 1.45, 1.4, for example. And so that's where the value of our transferable points comes from, the RRV for our transferable

points. Yeah, and RRV, again, is reasonable redemption value, which is meant to be the value you can reasonably expect to get without putting in a ton of effort, like just a medium amount of effort to not pick a bad redemption. And obviously, or maybe it's not obvious, but importantly, if you're willing to put in effort, you can oftentimes do much better than the RRV in terms of value. And in fact, if you were to look up any of our posts about what our choice privileges points worth or what our Hyatt points worth, et cetera, you're going to see the RRV that we've chosen, which is around that median point. But you'll also get an idea of what's the 80th percentile and the 90th percentile to get an idea of what outsized redemptions look like as well.

So you'll find that with the various hotel points for sure. And then with your transferable currencies, you also have some ability to get out. outsized value, but this creates a bit of an RRV paradox because sometimes there are individual airline or hotel reasonable redemption values that are higher numbers than our transferable currency reasonable redemption values, even when you can transfer to that partner. And so to give an easy example, our reasonable redemption value for Chase's ultimate rewards points is 1.5 cents per point. Our reasonable redemption value for Hyatt points is 1.8 cents per point. These are both at the time of recording, by the way.

At the time of recording. Good point. Good point. But yes, and important to mention that, that's at the time of recording. But whenever you listen to this, the concept here is going to be applicable, even if these specific numbers aren't. So in that case, sometimes readers will look at that and say, well, you can transfer your Chase Ultimate Rewards points to Hyatt.

So if you can get 1.8 cents per point in value with Hyatt, shouldn't the floor value of Chase Ultimate Rewards? rewards points be 1.8. That's like your minimum redemption, right? And for us, it's, it's not. It doesn't determine the minimum redemption because you have to keep in mind again. These are expected to be the value you can reasonably expect to get in general without making undue effort at maximization. And Hyatt's footprint isn't always going to work for everyone. You know, if you have a Hyatt redemption in mind, there's a good chance you're going to get better than reasonable redemption value for chase points. And that is one of the things that makes chase points is desirable.

valuable as they are, it's the fact that you can transfer to Hyatt when Hyatt yields good value. But if you're traveling somewhere without any Hyatt hotels, then the reasonable redemption value of Hyatt won't be relevant for you. So instead, we look at the overall portfolio of transfer partners and say, okay, well, with all of these different partners, whatever it is that fits your needs, whether it's one of the airline partners or a hotel partner like Hyatt, you can reasonably expect to get one and a half cents or better. And keep in mind that or better part because folks who really get into this hobby, people like Greg and I rarely redeem our points at just reasonable redemption value. We're usually aiming for much higher. We want to get better than average

value. We aim for above average in lots of different ways. And so Hyatt is a go-to transfer partner for me because I do want to get better than reasonable redemption value out of my points when I go to redeem them. But you can also get better than reasonable redemption value with various airline partners. And so there's always going to be situations where you can do that. And that'll be the case with each of the transferable currencies. And of course, each of the different hotel points and airline miles. There are outsized redemption capabilities. But even calculating those in some cases can be difficult when it comes to airlines. As I said a moment ago, how much is that fancy business class flight worth to you? For some people, it'll have a really high value.

is they really value the luxury of the experience, the extra space, the chance to lay down and sleep on the flight. For other people, that doesn't provide high value. They don't care as much about that. And so even figuring out what that point is worth when you're redeeming for a fancy flight is going to be something that varies from person to person. But again, our reasonable redemption values are meant to be sort of a conservative valuation of what you can reasonably expect to get.

And that is a tool to help you compare different offers. And you can certainly adjust and should. certainly adjust up or down based on your own travel patterns and your own expected redemptions as to what you think you're going to get out of those points. Absolutely. And if you want to see a full list of our reasonable redemption values, go to frequentmiler.com forward slash RRV. Don't forget.

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