Are All Points created Equal?

in #travel8 years ago

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Up until now when I say points, credits, rewards, you probably just view them as play money from a board game that I will not mention at this time. Anyway, it probably sounds fake. Great! I get points if I do this or if I do that. You may ask yourself, "How much is a point worth?"

Well, unfortunately, every program varies on the value of each point. The devaluation of points occurs over time, much like inflation with the U.S. Dollar. They're sneaky, but over time the cost of an award flight goes up just like the price in dollars for that flight goes up. A couple of offenders in this realm are Marriott and Hilton (still love ya). Sign up bonuses from 80k up to 100k and higher, but if those only get you a couple of nights, then the amount you get might be deceiving. The opposite is true for SPG. SPG (Starwood hotels) has a sign-up bonus of 35k. However, you could transfer those to Marriott for a 1-3 value. Meaning 1 SPG point is worth 3 Marriott points. Marriott just bought SPG, so I expect all of this to change down the line.

So how do you know? The way I know is typically by going through the process of redeeming rewards, even if I don't have the points yet. Once I see how much a night at a hotel costs or how much a flight costs in points, I get a good idea of what kind of value I would get before I fill out an application.

Also, I have to give credit where credit due. The Points Guy puts out a valuation chart every month of how many cents he believes each point is worth: https://thepointsguy.com/2017/03/march-2017-monthly-valuations/.

It can be helpful when making decisions about which card to get. What is your goal? Do you have a set goal in my mind like go to Disney in 2018? I think looking at valuations also assumes that you will use that card regularly. I will talk about churning in my next post.