How to calculate cents per point

For some travel hackers, cents per point is a critical piece of their strategy when redeeming their hard-earned points and miles. For us, cents per point is not important. We never calculate that metric before redeeming for travel because for us, the most important thing is that points and miles are helping us go somewhere we’d like to visit for less money.

The Formula

Calculating cents per point is actually fairly simple. You take the cash cost of the flight or hotel, subtract any taxes and fees required with the redemption and then divide by the points / miles the redemption costs. Multiply by 100 and you have the cents per point.

Example

In January, we flew to Phoenix for a long weekend stay in Scottsdale. P2 had a flight credit that covered his flight, but we decided to use United miles for P1’s flight. Using 30,300 United miles and $11.20 in fees, we booked one round trip economy ticket from Chicago (O’Hare) to Phoenix (Sky Harbor). Thanks to P2’s United Gold Status, P1 received an upgrade to economy plus, which would have cost $582.00 if we’d paid for that ticket instead of using miles. Using the formula, that results in 1.88 cents per points for this redemption.

What is a “good” redemption?

Every airline and hotel chain’s points / miles have a different value. The Points Guy has a detailed article outlining the value of each provider’s points and miles. The Points Guy has most airline miles rated from 0.9 to 1.7 cents per mile. Hotels have a wider range, from 0.6 to 2.0 cents per point. According to their January 16, 2024 numbers, United miles are worth 1.45 cents per mile. So, using that metric, getting 1.88 cents per mile was a pretty good redemption.

Some people have personal metrics they use. They may not redeem unless it’s over 2.5 or 3 cents per point. Others, like us, don’t actually check before booking. Free is free after all!

Summary

Cents per point is one of many metrics travel hackers use to calculate their redemptions. It’s not the be all, end all and may not be right for you when you’re choosing to use your points and miles. If you’re curious whether it’s a better deal to use points or miles, check out The Points Guy’s calculator that tells you directly if you should pay with cash.