Cents Per Point: Do They Really Matter?

by | Published Apr 4, 2022 | Edited Aug 28, 2022


As credit card churners and travel hackers, we are extra sensitive to ensuring we get the best deals and are receiving the best value for our effort expended.

I’ve often found it interesting how much individuals focus on cents per point (CPP) redemption calculations on public forums, often showcasing their best redemptions. But does taking the time to calculate and understand the cents per point on a redemption even matter?

Let’s dive deeper and look at some specific examples of various cents per points evaluations and when cents per point makes sense.

Why Do We Consider Cents Per Point (CPP)

At its core, cents per point is a metric that we can assign to our travel redemptions to better understand the value of our points. Similarly, we can better determine the value of credit card welcome bonuses and credit card earn rates to find out if applying for a new card is worth it.

Calculating this value gives us the knowledge to ensure we are maximizing our time spent in this hobby and frankly, it is just human nature to want to assign a real-life currency value to these intangible miles and points.

Cents per point can also be a useful calculation to determine if you are better off paying cash or redeeming points for your travel plans. We will dig into a few examples below to better understand this comparison.

Examples of Redemptions at Various Cents Per Point

To further understand what we typically see when considering the cents per points conundrum, let’s examine an example of an outrageous CPP redemption, a poor CPP redemption, and an average CPP redemption.

An Outrageous Cents Per Point Redemption

Below is a round-trip booking from Los Angeles to Tokyo on ANA in the exclusive first-class cabin. For this chosen itinerary, the cash rate would be $25,946 CAD or 110,000 Virgin Atlantic Flying Club points (if you can even find reward availability).

ANA first class cash booking price lax to tokyo

Virgin Atlantic Flying Club points are typically valued at 1.1 CPP. This would mean that 110,000 Virgin points would have an estimated cash value of $1,210 CAD. When considering this versus the cash rate, this would mean that you are saving $24,736 CAD through redeeming points for this booking. This also means that your value extracted would be 23.5 CPP, which is absolutely insane compared to the typical value of Flying Club points.

Does this CPP mean that you should only redeem Virgin Airlines points for ANA first class? No, not at all, especially if Tokyo isn’t a location you have an interest in visiting. However, this example does showcase one of the extreme ends of the cents per point world.

Similarly, just because I am “saving” $24,736 on this booking and redeeming points at a high CPP, does not mean that this is a redemption everyone should make. If you would never pay this amount for this redemption in cash, there is a disconnect between the face value (CPP) and the intrinsic (or sentimental) value to you.

A lot of the time, people are only calculating the CPP on these redemptions to make them feel good about themselves or to ‘flex’ on other people in the travel hacking community. Our mindset at Frugal Flyer and the reason we do what we do is to travel and have unique experiences, and you ultimately can’t put a price (CPP) on an experience.

A Poor Cents Per Point Redemption

Below is a one-night booking at the Athenee Hotel in Bangkok. On the date chosen, this hotel costs 31,000 Marriott Bonvoy or 4508 Thai Baht.

Marriott Athenee Hotel Bangkok Cash Points Comparison

Marriott Bonvoy points are typically considered to be worth 0.9 CPP. This means that the 31,000 point cost would be equivalent to an estimated value of $279 CAD.

When considering the cash rate, 4508 Thai Baht converts to $168 CAD. This means that if you were to pay cash for this booking, you would theoretically be saving $111 CAD based on the valuation of Bonvoy points mentioned above.

If you had an excess of Marriott maybe this redemption would be worth it (up to you to decide based on your points situation), but this is personally a redemption I would not make. Without a doubt, I would pay cash for this booking and save my points for another redemption where the value proposition made more sense.

An Average Cents Per Point Redemption

Below is a booking at the Conrad in Koh Samui. On the date chosen, this hotel costs 95,000 Hilton Honor points or 14,700 Thai Baht.

Hilton Conrad Koh Samui Cash Points Comparison

Hilton Honors points are typically considered to be worth 0.6 CPP. This means that the 95,000 Hilton Honors point cost would be equivalent to an estimated value of $570 CAD.

When considering the cash rate, 14,700 Thai Baht converts to $550 CAD. When considering this booking, the estimated valuation based on cents per point closely aligns with the cash booking. This redemption would make much more sense to justify using points on since you can be confident that the value proposition is on par.

Where this redemption would get even better if you were booking five nights on points, taking advantage of the fifth-night free benefit through the Hilton Honors program.

A five-night stay would cost 380,000 Hilton Honors points. Using the 0.6 CPP valuation, this would be equivalent to $2,280 CAD. Using the cash rate above multiplied by five nights, the total would be 73,500 Thai Baht which converts to $2,745 CAD. Utilizing the fifth-night free benefit, you would come out ahead by roughly $465 CAD when using Hilton Honors points.

My Opinion on Cents Per Point Calculations

I believe that at the end of the day, everyone should travel wherever you want and make the redemptions that you see fit based on your points balance, even if they aren’t the best cents per point value (e.g. if you seriously need to burn points after accruing for the past few years). If you want to obsess about squeezing every last drop of value out of your miles and points, that’s up to you. 

For me, as someone who is typically a min-maxer in many aspects of life, I find the best balance is to pay cash when it makes sense and redeem points when it makes sense. What “makes sense” will be a combination of cents per points valuations, points balances, as well as general travel goals.

Related: Turning Credit Card Points & Frequent Flyer Miles into Cash

The calculations in the examples above showcase the value that cents per point can bring, and I definitely encourage every miles and points enthusiast to calculate their cents per point redemption value to ensure they are making smart and informed redemptions. However, at the end of the day, you need to decide what the right redemption is for your situation and goals.

reddit churning canada cents per point discussion
I feel the same as Worried-Mulberry-968.

While cents per point should always be considered to ensure you are doing your due diligence, don’t let it rule your redemption or travel strategy. No one genuinely cares when you flex on Reddit about your high CPP redemption. Nor do you need to justify redeeming points for anything that isn’t optimal. Live and let live is a great motto to churn by.

Conclusion

Cents per point can be a good way to understand if a points redemption is worth it and to determine the cost versus rewards when deciding which credit card to sign up for. Everyone finds satisfaction in different things with this hobby, and if you are one of those people who adds up the cash rates of your flight redemption to feel like you got great value, keep on doing you. 

Just remember that everyone has different goals as a churner and to not be a jerk if someone mentions that they made a redemption that makes them happy, even if it isn’t “optimal”.

Hugh Campbell

Hugh Campbell

Senior Editor at Frugal Flyer
Hugh has been involved in the miles and points game since 2015 but has scaled up his knowledge and points-earning potential in recent years. In 2019, Hugh stepped things up when he met Reed in addition to a few other miles and points fanatics (err degenerate churners) and has since been able to capitalize on the various expertise that each member brings to the group.

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