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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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With any rewards program, the value of the points often depends on what rewards you redeem. That also means 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 costs.

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 or cashback, 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. For example, if you wanted to spend 36,000 points on a flight that costs for $533, the result of this calculation is $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 a calculation

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 cash when you're redeeming 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, say a domestic flight from Melbourne to Sydney was on sale for $85, while a flight to London was $1,630. If the domestic flight costs 7,000 points through your rewards program and the London flight costs 62,500 points, the value of flying to London using your rewards is higher.

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

Rewards credit cards comparison

1 - 15 of 36
Name Product Bonus points Rewards program Rewards points per $ spent Purchase rate p.a. Annual fee
Citi Premier Qantas Card
Qantas Frequent Flyer
0% for 6 months, reverts to 21.49%
$175 for the first year ($350 thereafter)
Get 80,000 bonus Qantas Points when you spend $4,000 in the first 90 days and a 0% purchase rate offer. Plus, a first-year annual fee discount.
Qantas Premier Platinum
Qantas Frequent Flyer
$225 for the first year ($299 thereafter)
Earn 80,000 bonus Qantas Points when you spend $3,000 in the first 3 months and save with a reduced first-year annual fee.
Citi Rewards Card - Velocity Points Offer
Velocity / Citi
$0 for the first year ($149 thereafter)
Earn 60,000 bonus Velocity Points when you spend $3,000 in the first 90 days. Plus, $0 first-year annual fee.
Coles Rewards Mastercard
Get 60,000 bonus Flybuys points (worth $300 off your shop at Flybuys partners) when you meet the spend requirements. Earn 2 points / $1 spent (up to $3,000 per statement period), then 1/$1 thereafter.
Citi Premier Card - Velocity Points Offer
Velocity / Citi
Enjoy 100,000 bonus Velocity Points (worth $450 in eGift cards) when you spend $4,000 within the first 90 days.
Virgin Australia Velocity Flyer Card - Bonus Points Offer
Velocity Frequent Flyer
$64 for the first year ($129 thereafter)
Get up to 60,000 bonus Velocity Points on eligible spending. Plus, a reduced first-year annual fee and a yearly $129 Virgin Australia Gift Voucher.
American Express Qantas Business Rewards Card
Qantas Business Rewards
ABN holders w/ $75,000 revenue. Get 120,000 bonus Qantas Points when you spend $3,000 in the first 2 months.
St.George Amplify Platinum
Amplify Rewards
$29 for the first year ($99 thereafter)
Earn 100,000 bonus Amplify Points (worth $450 in gift cards) when you spend $3,000 in the first 90 days. Plus, a first-year annual fee discount and Kayo cashback offer.
Westpac Altitude Platinum Card
Westpac Altitude Rewards
$49 for the first year ($150 thereafter)
Get 110,000 bonus Altitude Points (worth $350 cashback) when you spend $3,000 in the first 90 days. Plus, a $49 first-year annual fee discount.
Qantas American Express Ultimate Card
Qantas Frequent Flyer
Up to 100,000 bonus Qantas Points (75k when you spend $3,000 in the first 3 months and 25k in year 2). Plus, a yearly $450 Travel Credit. Ends 23 August 2022.
Citi Premier Card - Cashback Offer
Citi Rewards Program
$150 for the first year ($300 thereafter)
Receive $600 cashback when you spend $2,000 through Apple Pay or Samsung Pay in the first 90 days. Plus, save with a $150 first-year annual fee discount.
American Express Platinum Card
Membership Rewards Ascent Premium
Up to 200,000 bonus points (150k when you spend $5,000 in the first 3 months and 50k in year 2). Plus, a $450 Travel Credit each year.
American Express Business Explorer Credit Card
Membership Rewards Gateway
3.99% for 6 months, reverts to 19.99%
ABN holders w/ $75,000 revenue. Get 100,000 bonus points when you spend $3,000 in the first 3 months.
American Express Velocity Platinum Card
Velocity Frequent Flyer
Earn 75,000 bonus Velocity Points when you spend $3,000 in the first 3 months. Plus, a complimentary return domestic flight per year.
Qantas American Express Discovery Card
Qantas Frequent Flyer
Earn uncapped Qantas Points for every $1 dollar spent, plus an ongoing $0 annual fee.

Compare up to 4 providers

Tip: Credit card points calculations

If you want to know how many points you'll earn from using your credit card, the easiest way to calculate it is to multiply the card's earn rate (points per dollar) by your average spending.

For example, spending $4,000 a month on a card that earns 1 point per $1 equals 4,000 points per month and 48,000 points per year (4,000 points per month x 12 months). All you need to do to work this out is check your credit card points rate, spending and open the calculator on your phone.

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.

Other rewards calculators

Check out these calculators to get an idea of how many points – and how much value – you can get through different programs.

  • Flybuys and Velocity Points calculator
    See how many Flybuys points you can earn for your spending with partners and how many Velocity Points you'd get by transferring them. Plus, what your Flybuys points are worth when redeemed for Flybuys Dollars.
  • Everyday Rewards and Qantas Points calculator
    Calculate how many Everyday Rewards points you'll earn when you shop with Woolworths and other program partners. The calculator automatically shows you how many Qantas Points you could get, and you can compare this to the value you'd get by using your points for cash off your next shop.

Frequently asked questions

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2 Responses

  1. 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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