Should I use points or pay cash for travel?

Points vs Cash: How to Know Which Is the Better Deal

Travel rewards can be incredibly valuable—or completely wasted. The difference is knowing when to redeem and when to pay cash. Here’s how to calculate the right choice.

The Fundamental Calculation

Cents per point (CPP) formula:

CPP = (Cash price × 100) ÷ Points required

Example:

• Flight costs $500 cash
• Same flight costs 40,000 points
• CPP = ($500 × 100) ÷ 40,000 = 1.25 cents per point

Is that good? Depends on what your points are worth on average.

Point Value Benchmarks

What different points are worth (average):

Decision rule: If your CPP is above average, use points. If below, pay cash.

Real Examples Calculated

Example 1: Domestic economy flight

• Cash: $350
• United miles: 25,000
• CPP: 1.4¢ (below average for United)
• Verdict: Pay cash (save miles for better redemption)

Example 2: International business class

• Cash: $4,500
• United miles: 80,000
• CPP: 5.6¢ (excellent)
• Verdict: Use points (massive value)

Example 3: Hotel room

• Cash: $180/night
• Marriott points: 35,000/night
• CPP: 0.51¢ (below average)
• Verdict: Pay cash (points worth more elsewhere)

Example 4: Hyatt hotel

• Cash: $350/night
• World of Hyatt: 15,000/night
• CPP: 2.3¢ (excellent for Hyatt)
• Verdict: Use points

The Transfer Partner Advantage

Transferable points multiply options:

Chase Ultimate Rewards transfers to:

• United, Southwest, JetBlue, British Airways, Air France, Singapore, Hyatt, Marriott, and more

Amex Membership Rewards transfers to:

• Delta, JetBlue, British Airways, Singapore, ANA, Hilton, Marriott, and more

Why this matters:

• Same points, different values depending on transfer
• Business class sweet spots exist with specific partners
• Award availability varies by airline

Example transfer strategy: 40,000 Chase points could be:

• $500 via Chase travel portal (1.25¢/point)
• 40,000 United miles for economy (1.4¢/point)
• 40,000 Hyatt points for $700 hotel (1.75¢/point)
• Or transferred to Singapore for premium cabin sweet spot

When to Always Use Points

Use points when:

• ☑️ CPP is above average for that currency
• ☑️ Business/first class (often 3-10¢/point)
• ☑️ Peak travel dates with high cash prices
• ☑️ You have more points than you can reasonably use
• ☑️ Last-minute bookings (cash prices spike, award prices stable)

When to Always Pay Cash

Pay cash when:

• ☑️ CPP is well below average
• ☑️ Basic economy with minimal reward value
• ☑️ Cash price is unusually low (sales, budget airlines)
• ☑️ You’re building points for a specific future redemption
• ☑️ Refundable ticket needed (points often non-refundable)
• ☑️ Status earning matters (points bookings often don’t earn status)

The Opportunity Cost Consideration

Points have an earning cost:

If you earn 2 points per dollar spent:

• 40,000 points = $20,000 spending
• At 2% cash back instead: $400

So 40,000 points “cost” you ~$400 in foregone cash back.

True redemption value: If redeeming 40,000 points for $500 flight:

• Point value received: $500
• Point “cost” (vs cash back): $400
• True extra value: $100

This matters because: High CPP doesn’t mean infinite value—consider what you gave up to earn those points.

Sweet Spot Redemptions

Best value redemptions by program:

Chase Ultimate Rewards:

• Hyatt stays: 1.7-3¢/point regularly
• Partner transfers for business class: 2-5¢/point

Amex Membership Rewards:

• ANA business class to Japan: 4-6¢/point
• Singapore business class: 3-5¢/point

Airline Miles (business class):

• United Polaris to Europe: 3-5¢/point
• Delta One to Europe: 2-4¢/point
• AA business to South America: 3-5¢/point

Hotel Points:

• Hyatt aspirational properties: 2-3¢/point
• Marriott 5th night free: Effective 20% bonus
• Hilton 5th night free: Effective 20% bonus

The Cash Price Trap

Don’t use “retail” price for comparison:

Hotels and airlines inflate “cash prices” shown on award bookings. Always compare to:

• Actual cash price on the same dates
• Cash price through other booking sites
• What you’d actually pay in cash

Example trap:

• Award booking shows “$600 value” for 30,000 points
• Actual cash price on hotel’s site: $350
• Real CPP: 1.17¢, not the implied 2¢

Decision Flowchart

Step 1: Find cash price (actual, not listed) Step 2: Find points price Step 3: Calculate CPP Step 4: Compare to benchmark for that currency Step 5: Consider:

• Do you have enough points?
• Could you use points better elsewhere?
• Are you earning more points soon?
• Is flexibility needed?

Simple rule of thumb:

• CPP > 1.5× average → Definitely use points
• CPP = average → Either (consider point balance)
• CPP < average → Pay cash, save points

Points Devaluation Reality

Points lose value over time:

• Airlines increase award prices regularly
• Hotels recategorize to higher point levels
• New award charts often mean worse rates

This means:

• Don’t hoard points indefinitely
• Decent redemption now > maybe great redemption later
• Use them while they have value

The Bottom Line

Points are a currency—treat them that way.

1. Know the baseline value of your points
2. Calculate CPP for every redemption
3. Redeem when value exceeds average
4. Pay cash when value is below average
5. Don’t chase “value” for experiences you don’t want

The best redemption is one that gets you travel you actually want at better-than-cash rates.

A “poor value” redemption that gets you a flight you’ll take beats hoarding points for a “perfect” redemption you never make.

About This Calculator

Point valuations based on industry analysis from The Points Guy, One Mile at a Time, and award redemption data. Values fluctuate based on program changes and availability. Always calculate your specific redemption. Last updated January 2025.