Formula

Summary

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The Essential Points Formula‍

Calculating the value of points doesn’t need to be complicated. To maximize the value of miles and points, use this simple formula: Value per Point = (Value of Travel - Out-of-Pocket Costs) ÷ Total Points Used‍

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This formula ensures the best possible return when redeeming points for travel. Start by finding the cash price of a flight, plug it into the formula, and see if the redemption value makes sense. A Quick Example: Consider a flight that costs $1,000 and requires 100,000 points. Divide the travel value ($1,000) by the total points (100,000), which equals 1 cent per point. If the value per point is higher, like 2 cents or more, that redemption is typically a great deal.

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Factoring in Extra Costs‍

While miles and points can lead to near-free travel, there are often taxes, fees, or fuel surcharges that come with the booking. For true value calculations, subtract these costs from the total travel value before dividing by points used. This adjustment gives a clearer picture of what those points are really worth. Is It Worth It? Ultimately, the decision comes down to personal preference. A quick calculation using the formula can help determine if paying those taxes and fees is worthwhile. If the points’ value holds strong even after fees, it's a win!

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Keep It Simple

The process doesn’t need to be complex. Earning points starts with using a travel card for everyday purchases, collecting those rewards, and redeeming when the right travel opportunity arises. Stick to the essentials: earn points, use the formula to find value, and redeem for unforgettable trips.