Points to dollars: The value of your rewards points | Finder

Points to dollars: How to calculate the value of rewards points

Not sure what your rewards points are worth? Here's how to work out the dollar value so you can get more bang for your buck.

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The value you get from a rewards or frequent flyer credit card largely depends on whether or not you can use the points and other perks to justify the card's fees, rates and any other costs. With points, the value often depends on what rewards you redeem. So, let's take a look at how to work out this value, as well as what else to think about when you're looking at a rewards card.

Steps to calculate the value of rewards points

An important detail to note: there is no fixed, dollar value for points when you're redeeming them. This is because the number of points you need for a reward varies depending on what you redeem them for and the actual rewards program.

But you can get an idea of what your points are worth for any reward using the following steps:

  1. Estimate the retail value of your chosen reward

    For example, if you wanted to redeem your points for a flight, you could go to the airline's website and search for flights on your chosen travel dates. Or, if you wanted to use points for a coffee machine, you could search for a similar model sold at different retailers. With gift cards and other similar cashback rewards, the value is already established (e.g. a $100 gift card = $100 value).

  2. Divide the cost of the reward by the number of points needed

    This gives you the value of each point and is usually a fractional number. For example, if you wanted to redeem 36,000 points for a flight that retails for $533, the result of this calculation would be $0.0148 (or about 1.5 cents).

    This gives you the value of each point, but comparing cents (or fractions of cents) is sometimes confusing when you're looking at different reward options. If you find that's the case, a simple solution is to look at the value you get for every 1,000 points redeemed. You can do this by adding a third step:

  3. Multiply the value per point by 1,000

    This usually gives you an answer that's in dollars and can be easier to compare, because most of the time you'll be redeeming thousands of points for a reward anyway. So with the example reward flight in step 2, you would get $14.80 worth of value for every 1,000 points used.

How to write this as an equation

Using the example of a reward flight above, here is how the basic calculation per point would look:

533/36000 = 0.0148 (or 1.48 cents per point)

Here is how the calculation looks per 1,000 points – keeping in mind that you do the calculation in brackets before anything outside the brackets.

[533/36000] x 1000 = 14.80

What is 1 Qantas Point worth?

How can I make the most of my points?

Treat your points like you would cash when it comes time to redeem them. If you are rewarded with vouchers or gift cards, shop for items that are on sale. With frequent flyer rewards, go for the flights that are more expensive and generally never marked down.

For example, a domestic flight from Melbourne to Sydney may be as low as $85, while one going to London could cost $1,630. If the domestic flight costs 7,000 points with the rewards program and the international one costs 62,500 points, the value of flying to London using your rewards is higher.

Using the value per 1,000 points calculation, the international flight would offer you $26.08 per 1,000 points, while the domestic flight would offer you $12.14.

Rewards credit cards comparison

Data updated regularly
Name Product Bonus points Rewards program Rewards points per $ spent Purchase rate Annual fee
American Express Explorer Credit Card
90,000
Membership Rewards
2
20.74% p.a.
$395
Get 90,000 bonus Membership Rewards Points and $300 back when you spend $3,000 on your new card in the first 3 months.
Citi Rewards Card - Bonus Points Offer
100,000
Citi Rewards Program
1
21.49% p.a.
$49 annual fee for the first year ($149 p.a. thereafter)
Get 100,000 bonus Citi reward Points (worth $460 in gift cards) when you spend $3,000 in the first 90 days. Plus, a $49 first-year annual fee.
Qantas Premier Platinum
100,000
Qantas Frequent Flyer
1
19.99% p.a.
$199 annual fee for the first year ($299 p.a. thereafter)
Get 100,000 bonus Qantas Points when you spend at least $4,000 within the first 3 months. Plus a discounted $199 first-year annual fee.
NAB Qantas Rewards Signature Card
110,000
Qantas Frequent Flyer
1
19.99% p.a.
$295 annual fee for the first year ($395 p.a. thereafter)
Up to 110,000 bonus Qantas Points (90,000 when you spend $3,000 in the first 60 days and 20k after 12 months)
ANZ Frequent Flyer Black
120,000
Qantas Frequent Flyer
1
20.24% p.a.
$425
Collect 120,000 bonus Qantas Points and $200 back when you spend $3,000 in the first 3 months. Plus, complimentary lounge passes.
Citi Rewards Card - Velocity Points Offer
100,000
Citi Rewards Program
1
21.49% p.a.
$99 annual fee for the first year ($199 p.a. thereafter)
Enjoy 100,000 bonus Velocity Points when you spend $3,000 in the first 90 days. Plus, complimentary travel and purchase insurance.
Coles Rewards Mastercard
20,000
Flybuys
2
19.99% p.a.
$0 annual fee for the first year ($99 p.a. thereafter)
Enjoy 20,000 bonus Flybuys points, a $0 first-year annual fee and 0% p.a. on balance transfers for 18 months (1.5% fee applies).
St.George Amplify Platinum - Qantas
60,000
Qantas Frequent Flyer
0.5
19.74% p.a.
$99
Earn 60,000 bonus Qantas Points, plus enjoy 0% p.a. on balance transfers for 15 months with a 1% BT fee.
Kogan Money Black Card - Exclusive Offer
N/A
Kogan Rewards Program
1
20.99% p.a.
$0
Finder Exclusive
Save with a $0 annual fee and a 0% introductory rate on balance transfers. Plus, earn $50 Kogan.com Credit and uncapped rewards points.
Westpac Altitude Platinum Qantas
60,000
Qantas Frequent Flyer
0.5
20.49% p.a.
$149 annual fee for the first year ($200 p.a. thereafter)
Get 60,000 bonus Qantas Points when you spend $3,000 within 90 days. Plus, a first-year annual fee discount and a 0% balance transfer offer.
Citi Rewards Card - Points & Gift Card Offer
90,000
Citi Rewards Program
1
21.49% p.a.
$49 annual fee for the first year ($149 p.a. thereafter)
Receive 90,000 bonus Citi reward Points (worth $400 in gift cards) and a $100 Coles eGift Card when you spend $3,000 in the first 90 days.
Qantas American Express Ultimate Card
55,000
Qantas Frequent Flyer
1.25
20.74% p.a.
$450
Receive 55,000 bonus Qantas Points when you spend $3,000 within the first 3 months. Plus, a $450 Qantas Travel Credit each year.
Virgin Australia Velocity Flyer Card - Balance Transfer Offer
N/A
Velocity Frequent Flyer
0.66
20.74% p.a.
$64 annual fee for the first year ($129 p.a. thereafter)
Get 0% p.a. for 26 months on balance transfers and a reduced first-year annual fee. Plus, $129 Virgin Australia Gift Voucher per year.
American Express Platinum Edge Credit Card
N/A
N/A
1
20.74% p.a.
$195
Get $200 travel credit per year to spend on eligible flights, accommodation, car hire and more. Plus, earn up to 3 points per $1 on eligible spending.

American Express Business Explorer Credit Card
75,000
Membership Rewards Gateway
2
3.99% p.a. for 6 months, reverts to 19.99% p.a.
$149
ABN holders w/ $75,000 revenue. Get 75,000 bonus points when you spend $3,000 in the first 3 months. Plus, 2 airport lounge passes.
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What else do I need to think about?

The value you get from reward points – sometimes known as the "points currency" – is influenced by many factors. Some of the other key details to think about include:

  • Additional reward costs. Some rewards attract additional fees and charges. For example, flights might have airline fees and taxes, while retail items like coffee machines could attract shipping costs. So before redeeming, check whether these expenses are charged separately or factored into the points needed for a reward.
  • Point transfers. If you want to transfer credit card reward points to a frequent flyer program, be aware that the transfer rate could affect the value you get from your points. For example, if 2 credit card points transferred to 1 frequent flyer point, you'd end up with half as many points after the transfer. But if that meant you got a higher-value reward flight, it could be worth it. You can compare point transfer rates for credit card reward programs in this guide.
  • Credit card costs. The annual fee, interest charges, international transaction fees and any other charges you often pay for your credit card can offset the value you get from reward points. Ideally, you should get a card that has fees which are lower than the value you think you will realistically get from rewards.

A reward or frequent flyer credit card is only really worth it if the benefits outweigh the card's annual fee, interest charges and other costs. As points are one of the biggest perks on these cards, working out the potential value you can get from them makes it easier to compare and find a card that fits with your goals.

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2 Responses

    Default Gravatar
    MiteshNovember 13, 2012

    I have 500,000 altitude points – what is this in frequent flyer points and how do I check where I can fly to with those points

      Avatarfinder Customer Care
      JacobNovember 14, 2012Staff

      Hi Mitesh.
      49,920 Altitude points* = 312 Air New Zealand Airpoints
      50,000 Altitude points* = 25,000 Asia Miles
      50,000 Altitude points* = 25,000 Singapore Airlines KrisFlyer Miles
      50,000 Altitude points* = 25,000 Malaysia Airlines Enrich points
      50,000 Altitude points* = 25,000 Qantas Frequent Flyer Points
      50,000 Altitude points* = 25,000 Velocity Frequent Flyer Points

      Thanks for your question.

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