Points and miles

What It Means

Points and miles are the rewards currencies that credit cards, airlines and hotel chains pay out for spending, flying or staying, which you later trade for flights, rooms or other redemptions. A point has no fixed dollar value: Experian says general travel card points are usually worth about 1 cent each toward travel, more when moved to some airline and hotel partners, and less for many other uses. To judge a redemption, divide the cash it saves by the points it costs.

How People Say It

• "Let's book it on points and save the cash."
• "Is that a good redemption or a bad one?"
• "Our miles are going to Grandma's for Christmas."

The Breakdown

The formula

Cents per point = (cash price minus taxes and fees owed on the award) ÷ points needed × 100

Worked example. A family checks one round-trip ticket two ways (example figures):

What the result means. The same 25,000 points are worth $175, $250 or about $414 depending on how they're spent. Experian says general travel points usually come in at about 1 cent each toward travel, transfers to airline and hotel partners can reach 1.5 to 2 cents or more, and many other uses are worth less. A result well under 1 cent means cash might be the better way to pay.

What moves the number

• Dynamic pricing: Experian notes many airline and hotel programs change the points price with demand, so one date can cost far more than the next.
• Taxes and fees: an award ticket can still carry fees, which cut the value.
• The program's terms, which the issuer or airline can change.

Good to Know

The CFPB's May 2024 report on credit card rewardsCredit card rewardsCash back, points or miles a credit card pays you on your spending, worth only what the program lets you redeem them for. See more found four repeated problems in consumer complaints: programs raising the points or miles a redemption needs, conditions buried in fine print, rewards lost when an account closes or through expiration policies, and redemption tools that didn't work. Read the program's terms, including any expiration rules, before you count on a balance. InterestInterest rateThe yearly percentage a lender charges for borrowing money, not counting fees; the APR adds certain fees to show a fuller cost. See more matters too: as Buhata's credit card rewards page explains, Experian says someone who usually carries a balance will generally pay more in interest than the rewards are worth.

Related Terms and Categories

• Credit card rewards

  Cash back, points or miles a credit card pays you on your spending, worth only what the program lets you redeem them for.

• Foreign transaction fee

  A fee a card provider charges, usually a percentage of the transaction, when you use the card in another country or pay in a foreign currency.

• Annual fee

  A yearly charge some credit cards bill simply for keeping the account open, listed in the card's Schumer box and charged again each anniversary.

• Travel budget

  A plan for how much a trip will cost in total, split into travel, lodging, food, activities and a cushion, set before you book.

• Family vacation

  A trip taken together by a parent or parents and their children, usually planned around school breaks, the children's ages and a shared budget.

Travel and outings with kids