Here’s How Much Your Miles are Worth — and How to Use That Information

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Reader Vinhsynd asked,

In reading the site I’ve seen you value AAdvantage miles at 1.8¢ in the past.

I’m not interested in how you came up with that number as it is probably an average of value of all the awards you have researched. But I am interested in what you do with that number: how does it influence when you use cash vs points, how does it effect which card you choose, etc?

I wrote an extensive discussion of how much different mileage program points are worth back in December. (At the time I valued American miles at 1.7 cents apiece, though deteriorating availability on American’s own flights and reduced premium cabin award space on Cathay probably knocks that down a tenth of a cent.)

Here are the valuations I gave for different airline miles currencies:

That’s less than the best points currencies that transfer to a variety of frequent flyer programs:

It should be noted that these average values are not the same as how you should value these points in all cases.

It depends on how you redeem them. What value are you going to get for your points? The important thing here is not to use the retail price of a ticket you’re getting, since

  1. with premium cabin rewards you might not have been willing to spend that much cash.
  2. Frequent flyer tickets aren’t necessarily worth as much as a paid ticket. They don’t earn miles. They may not be upgradeable. And you can’t necessarily just pick whatever flight you want, you have to be flexible and worry about award availability.

It depends on when you’re going to redeem them. You don’t earn a rate of return on miles and points like you might with cash in a bank or investment account. And you need to discount to present value if you’re going to use the points later. Plus there’s substantial risk of devaluation with many points currencies.

It depends on how many you already have. The value of points at the margin is different than an overall average value. As you approach having enough points for an award, the marginal value of a few more points goes up substantially — since those extra points are what make the award possible. On the other hand, once you have more points than you’ll redeem in the near-term the value of additional points falls since you may not ever use them, or may not use them under current award charts.

But since valuation here is the amount at which you are indifferent to holding miles versus cash this figure is useful for:

  • Comparing when to spend miles or cash. Should I spend 50,000 miles for an award ticket or $700?
  • Comparing when to spend on airline’s miles versus another for the same award. Should I spend 25,000 United miles or 35,000 Delta miles?
  • Comparing the value of different credit card signup bonuses. Is an 80,000 point offer from Marriott better than a 75,000 point offer from Hilton? In fact, I view a 40,000 point offer from Chase Sapphire Preferred better than both (and that’s without the 5000 extra points for adding an authorized user to the account.
  • Determining which hotel chain offers the better value reward when you’re considering staying at two different hotels. Should you spend 12,000 Starwood points or 35,000 Hilton points?
  • Deciding whether to buy points when there’s a big bonus promotion. Were those perennial offers to buy US Airways miles at 1.9 cents apiece a good deal?
  • Figuring out how much extra you might be willing to spend to earn points through a bonus promotion, or figure out whether a hotel promotion should influence your decision about where to stay

But since these valuations are precise I won’t actually pay 1.7 cents for an American mile. I want to accumulate American miles when they’re substantially less costly than 1.7 cents apiece. And I know I am clearly not a buyer at 2.5 cents.

In practice these are fairly blunt tools that tell me “1 cent a point for American miles is a really good deal” but that I’m not going to spend 2 cents unless there’s a very specific scenario — like a few points at the margin to top off an account for an award I’ve put on hold — where it makes sense (and in that scenario, my valuation of each point is higher since they’re helping me at the margin to save with a real redemption).

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Editorial note: any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any card issuer. Comments made in response to this post are not provided or commissioned nor have they been reviewed, approved, or otherwise endorsed by any bank. It is not the responsibility of advertisers Citibank, Chase, American Express, Barclays, Capital One or any other advertiser to ensure that questions are answered, either. Terms and limitations apply to all offers.


  1. Gary,

    It doesn’t matter to me anymore how much a mile is worth, and here’s why. If I can fly using my Southwest miles or BA Avios points, it means I can save my AA/UA miles for long haul business or first class seats.

    I recently booked tickets on Southwest LGA/FLL for 8000 points roundtrip. A recent trip LGA/LAX was roughly 15,000 points. Legacy carriers will charge you 25,000 miles for those trips.

    We’re considering a trip NYC/CUN (Cancun). I can fly SW for 16,600 points R/T, or use my Avios to fly on the non-stop AA flight for 20,000 points. Considering what it would cost to fly AA and UA, I’d say this is a bargain.

    Using the raw data is not as useful as it once was, when these factors are added to the equation.

  2. In my very simplistic view of things, it seems to me that all of the various points/loyalty valuation methods are quite subjective and variable. My primary metric is how much it would cost me to replace the points for a particular reward? Am I better off putting that amount of spend on a (bonused) cash back card (i.e. Amex OBC, Discover It, etc.) or a program loyalty card. For instance, most domestic Hilton properties are generally a better deal using a bonused cash back card to generate the cost than generating the absurd number of points required for even a mid-tier hotel with any of the Hilton cards. On the other hand, I’m almost always better off generating Chase UR points for Hyatt properties. AA miles generally accrue at 1 point/$1, while anything in the UR program can easily accrue at 5 points/1$ spent. Certainly this technique disregards some travel planning nuances, but for me it’s a good starting point and cost reality check. (And I analyze the value of a new sign-up bonus separately.)

  3. @dhammer53

    I usually hate being that guy with a negative comment, but I think you either did not read Gary’s post thoroughly, or you are not connecting his reasons for knowing point values to even your own specific situation.

    You state the 16.6k SW or 20k Avios to Cancun is a better deal than the higher number of AA or UA required. Which is true, but that simply talks about how best to use each type of mile.

    But that doesn’t change all the scenarios in which knowing what value you get out of each type of point helps you make good decisions. As Gary said, do you decide to spend on a credit card that gets 1 AA mile or another that gets 1 UR point? Do you go for promotions that earn 4000 SW RR, or 3000 AA miles? Do you pay $300 in cash or 25k UA miles on a route that SW or AA can’t take you on? And so on. Those are examples of decision making that knowing your point values can help with, along with the others that Gary outlined.

  4. dhammer53,

    Good thought, Southwest is my preferred airline for domestic because of the (usually) lower point redemptions, way more flight options, and free cancellations. To eclipse the 25k point mark the Southwest flight needs to be over ~$380 RT. UA and AA points I save for international trips whether its economy or business.

  5. I do things the EASY way. I spread tiles not unlike the game Twister across my tile floor , then I go outside with a bottle of Captain Jack Morgan in hand, polish that off , come careening down my hallway LEAP HIGH Over the couch, and whichever tile I belly flop on….

    That’s the one I fly.

    Gotten me this far.


  6. Jig,

    And that’s the stuff that keeps folks like you and me up at night. 😉

  7. I think this post omits the big point: there’s not much logic, if you buy Gary’s valuations, of using miles cards for non-bonused spend. Every mile save Starwood is valued at less than 2%. And even Starwood is roughly equal to Arrival+ miles.

    Put it differently, make sure you’re getting more than 2% in value for your miles, or just keep it simple.

  8. @Hmm – that is something I have written many times. Indeed, I’ve recommended getting 2% cash back and buying miles at a discount when you need them.

  9. @Beachfan I’m torn within a very small range for Citi points. They are transferable to Singapore, so worth at least as much as Singapore miles of course. And they’re valuable for flexibility, I like Etihad as a transfer partner. They aren’t as valuable as Chase, Amex or Starwood points. I just haven’t settled on 1.6 or 1.7 cents. [And this applies of course only to ThankYou points that are transferrable to miles.]

  10. @Gary

    Thanks for the post.

    In general I think there is often a mixing between purchase value and redemption value.

    When you say a given valuation is the point at which one is indifferent to using points out cash it makes me think of purchase value. Meaning for every dollar one spends that earns one point they have already assigned a purchase value of >¢2 since they chose a point over ¢2 back.

    Using the values you assigned for point values means only the SPG, and EveryDay Preferred make sense for general spending.

    This is different from redemption value which is situationally unique. One can hit ¢7/mile with ANA or the could hit ¢0.3/mile on Delta. Given a purchase value of ¢2 obviously and redemption less than ¢2/point is a net loss.

    Am I reading you post right? You are OK “purchasing” SPG points at less than ¢2.2/point and that is also the base value at which you are looking to spend it?

  11. I don’t see how there can be much of a difference between purchase and spend value, if you can purchase in unlimited quanities. As I note above you may not be willing to spend at your purchase value if you are limited in the number you can purchase and you have higher competing uses.

    Where the spread comes in is that the values are imprecise and can fluctuate for reasons I explain in the post. As a result they’re rough guides, so you want to accrue at a price less than the value and redeem at an amount higher than the rough value, the bigger the spread the better.

  12. In one instance I value Skymiles at 4.28 cents . PDX to BKK in December business class $6,000 or 140,000 miles . 6,000 divided by 140,000 equals .0428 . So for this one example I consider it a pretty good deal . Now if I can actually arrange the tickets before Delta ups the price again ….

  13. @Daryl Two questions for you: would you have paid $6000 for that ticket if you couldn’t have gotten it in miles? If not, then you don’t really value the miles at 4.28 cents, you only got something that sold at retail for 4.28 cents per miles. Second, can you reliably do that whenever you wish? You can use cash to buy a $6000 ticket whenever you like. But if you can’t use miles as easily then you have to discount the value of those miles relative to the cash price of what you’re redeeming for.

  14. Just curious, towards the end of the post you mentioned you’d buy AA miles at 1c per mile.

    No sarcasm here, I’m not familiar with the AA program, has that ever happened? Or is that a pie in the sky number? I thought 2c sounded cheap, maybe that’s how they should market it, but if 50,000 aeroplan points were offered to me at 2c per, that’s $1000 (CAD of course in my math as a Canadian) that’s not worth it except under certain circumstance. 50,000 will get me YVR-MDE, a usual flight for me and almost as far as 50,000 points will take you. That flight ranges from 750 at it’s absolute cheapest to 1200 at Christmas. So a non-status person getting less availability might have trouble using the miles at Christmas, but I wouldn’t and 60,000 miles would get me to business class, upping the price to anywhere from 1800-2000$. In that case it’s likely a decent deal for me, but using them in April would make no sense.

    But based on the article that’s not really have you do your math right? I was a bit lost to be honest. But back to my original question, is your 1c number realistic? Or is it just theoretical?

  15. I’ve been finding that most of the time I am lucky to get 1.5c. The only way I feel I can get higher values is business class to Europe, which I don’t do often, and sometimes on last minute bookings. I recently moved to a big Delta city, and those are usually pegged pretty close to that 1.3c number Gary suggested, sometimes not even that. We have United, Delta and American cards, primarily for the specials and free bags. But since we have cards that earn 2%, we rarely use these airline cards. I have booked about 20 tickets in the past couple years (using them up on family members) and have never hit anything close to 2c.

    To be honest, it is so much hassle trying to figure out how to optimize use of points (I really feel the next time I take an overseas trip I need to hire someone to do it for me), that I will be happy when most of my accumulated miles are used up and I can just stick to the 2% cards. Most of my direct airline mile accumulation now comes from shopping portals and 5x spend on Chase for Amazon gift certificates at office supply stores.

  16. @Daryl

    Would you have bought a business class ticket with cash?

    Most people probably would not, they would have paid cash for economy.

    For example, I booked a trip on ANA to Japan in may with MR points: 170,000miles + $500 for 2 business class tickets.

    Had I not gotten the awards I would’ve bought 2 economy tickets for $4600 total.

    So my value of the miles is (4600-500)/170000= $0.024/mile.

    This is different from the retail value of $12000/170000=$0.07/mile. Since I was never willing to pay this in the first place.

    Value doesn’t equal enjoyment.

    I’m going to enjoy business class at $0.024 /mile way more than I’m going to enjoy $0.024/mile in economy.

  17. @brett armstrong first, US Airways sold miles at 1.2 cents occasionally and second buying miles isn’t just taking advantage of a purchase promo, but how much you spend on some other mechanism by which miles are earned — whether it’s a shopping promotion, gift cards, etc.

  18. Completely off-topic.

    My Global Entry expires in two months. Is there a method to renew or does the process begin anew from scratch?

  19. I am surprised you value United so high. They have some really expensive awards from what I see.

  20. @Vinhsynd very interesting comments. I like how you broke down the value to you. That is what really matters.
    You make a great point. 85K round trip on ANA per ticket to Japan, that is pretty good, or is that one way?


  21. @robertw – Their first class awards are crazy expensive. Their business awards aren’t cheap, but with no fuel surcharges.

  22. To both Gary Leff and Vinhsynd I don’t guite follow your reasoning based on the hypothetical assumption that I would not buy business class otherwise . I agree that defining value is open to debate . If I was younger it would definitely be coach , to save awards or cash . Lately my old bones can definitely benefit from a little more room on a long , long flight . So business class will nowdays have more value for me . I guess you are trying to establish a standard way of comparing all different miles and I did not grasp that .
    Anyway…Keep Smiling ,

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