How Much Are Ultimate Rewards Points Worth?

Filed Under: Chase, Credit Cards
In the interest of full disclosure, OMAAT earns a referral bonus for anyone that’s approved through some of the below links. These are the best publicly available offers that we have found for each card. Opinions expressed here are the author's alone, not those of the bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities. Please check out my advertiser policy for further details about our partners, and thanks for your support!

Chase Ultimate Rewards points are one of the most valuable and widely collected points currencies out there. Personally, I’ve long stated that I value these points at roughly 1.7 cents each, and I’ve received a lot of questions over the years about how I come up with that valuation. In this post I wanted to take a closer look at how I arrived at that number.

Let me start by saying that while there’s a right and wrong way to go about valuing points, there’s not actually a widely agreed upon valuation of points. So just as I say that Ultimate Rewards points are worth 1.7 cents each, some may say that they’re worth 1.5 cents each, while others may say that they’re worth 2.0 cents each, and they’re not necessarily any more right or wrong than I am.

General approach to valuing points

A while back Travis wrote a series explaining how to value points based on your earning and redemption patterns. He’s much more of a scientific thinker than I am, so check out his series:

The simplest way to explain it is that points are worth some amount between your acquisition cost and your redemption value. Where in that range your valuation falls depends entirely on how you choose to redeem points. With credit card points the acquisition cost math gets murky, since you have to view that in terms of the opportunity cost of earning those points.

In a simple diagram, here’s how he explained his methodology for valuing points:

redeeming and earning combined 3

With airline miles you’ll typically get the most value out of first & business class redemptions, though transferable points currencies give you a bit more flexibility in term of the ways you can redeem while optimizing your points.

If you are going to redeem points for a first or business class ticket, it’s important to keep in mind that points are only worth as much as you’d otherwise be willing to pay for a ticket. If you redeem 100,000 miles for a ticket that would cost $10,000 in cash, you’re not actually getting 10 cents per mile of value, assuming you wouldn’t have paid that in cash. Instead the real value you’re getting is how much you otherwise would have been willing to pay for the ticket. At least that’s how I recommend approaching it when valuing points.

In the case of Ultimate Rewards points, there are two “optimal” ways to redeem these points that have to be considered when coming up with a value:

Redeeming Ultimate Rewards points as cash towards travel

Ultimate Rewards points can be redeemed as cash towards the cost of a travel purchase, including for things like flights, hotels, car rentals, and more. The amount of value you get per point varies based on the most premium card you have:

Again, it’s not just about which card you’re earning points with, but rather about which card is the most premium, since you can transfer points between accounts. So if you have the Chase Sapphire Reserve® Card and Ink Business Preferred℠ Credit Card, all points can be redeemed for 1.5 cents each towards the cost of a travel purchase.

As you can see, this establishes a base value of 1.25-1.5 cents per Ultimate Rewards point, depending on which card you have.

Redeem Ultimate Rewards points for 1.5 cents each towards the cost of a travel purchase

Transferring Ultimate Rewards points to airline and hotel partners

The other way you can redeem your Ultimate Rewards points is to transfer them to one of the Chase Ultimate Rewards airline or hotel partners. All three cards earning premium Ultimate Rewards points have the ability to transfer points to these 13 partners, which include nine airline programs and four hotel programs:

Aer Lingus Aer ClubIHG Rewards Club
Air France/KLM Flying BlueMarriott Bonvoy
British Airways Executive ClubWorld Of Hyatt
Iberia Plus
JetBlue TrueBlue
Singapore KrisFlyer
Southwest Airlines Rapid Rewards
United MileagePlus
Virgin Atlantic Flying Club

So in deciding the value of Ultimate Rewards points, we have to decide the value of the points currencies you can transfer to. Personally my valuations of these points is as follows:

Ultimate Rewards Transfer PartnerTransfer RatioValue Of Points
Aer Lingus Aer Club1000 : 10001.3 cents
Air France KLM FlyingBlue1000 : 10001.2 cents
British Airways Executive Club1000 : 10001.3 cents
Iberia Plus1000 : 10001.3 cents
Korean Air SkyPass1000 : 10001.5 cents
Singapore Airlines KrisFlyer1000 : 10001.5 cents
Southwest Rapid Rewards1000 : 10001.3 cents
United MileagePlus1000 : 10001.3 cents
Virgin Atlantic Flying Club1000 : 10001.2 cents
IHG Rewards Club1000 : 10000.5 cents
Marriott Rewards1000 : 10000.8 cents
Ritz-Carlton Rewards1000 : 10000.8 cents
World Of Hyatt1000 : 10001.5 cents

Transfer Ultimate Rewards points to World of Hyatt for redemptions at the Park Hyatt Maldives

Wait, how can the points be worth more than any of the individual redemption opportunities?

You might be saying to yourself “well wait a second, how can Ultimate Rewards points be worth 1.7 cents each, when the most you value any of the individual redemption opportunities with the Chase Sapphire Reserve® Card is 1.5 cents per point?”

Some may disagree with my approach here, though let me first say that I intentionally value points very conservatively, much more so than most. That’s because every time I decide whether to pay cash or redeem points for something I crunch the numbers, and I don’t want to establish a value where I create an unrealistic expectation of points.

So how can I value Ultimate Rewards points more than any of the individual currencies you can redeem the points for? Because one aspect of my valuing points is applying a discount to account for the fact that they’re prone to devaluations. If you’re collecting a specific points currency, the value of your points can decrease significantly overnight. If you’re collecting a transferable points currency, you have a ton more flexibility, and therefore I think it’s only reasonable to apply a premium to the points, in this case of a bit over 10%.

Simply put, I value an Ultimate Rewards point more than any of the individual redemption options because I’d rather hold onto flexible Ultimate Rewards points than points with a particular partner, and I need to account for that in my valuation. The valuation of a particular points currency isn’t based on the absolute most value you can get out of those points, but rather is based on an achievable redemption that takes into account the decreasing value of points over time.

Transfer Ultimate Rewards points to KrisFlyer for redemptions in Singapore Airlines first class

What does that mean for cards earning Ultimate Rewards points?

Given my valuation of 1.7 cents per point, what does this mean for the return on spend offered by the major cards earning Ultimate Rewards points?

  • The Chase Sapphire Reserve® offers 3x points on dining and travel (5.1% return)
  • The Chase Sapphire Preferred® Card offers 2x points on dining and travel (3.4% return)
  • The Ink Business Preferred℠ Credit Card offers 3x points on the first $150,000 spent in combined purchases per account anniversary year on travel, shipping purchases, internet, cable, and phone services, and advertising purchases with social media sites and search engine (5.1% return)
  • The  Ink Business Cash℠ Credit Card offers 5x points on the first $25,000 spent in combined purchases per account anniversary year at office supply stores, and on internet, cable, and phone services (8.5% return), as well as 2x points on the first $25,000 of combined purchases per account anniversary year at restaurants and gas stations (3.4% return)
  • The Chase Freedom Unlimited® offers 1.5x points on everyday spend (2.55% return)
  • The Chase Freedom® Card offers 5x points in rotating quarterly categories on up to $1,500 of spend per quarter (8.5% return)

As you can see, those are some impressive returns.

On personal cards, it’s tough to beat the combination of the Chase Sapphire Reserve® and Chase Freedom Unlimited®, and for business cards both the Ink Business Preferred℠ Credit Card and Ink Business Cash℠ Credit Card offer some valuable bonus categories.

Bottom line

There’s no objective valuation of points that everyone will agree on. Rather I try to provide general guidance as to how I value points, noting that everyone will redeem their points differently, and get different value out of them. With that in mind, I like to value points conservatively, because I don’t want to create unrealistic expectations, and then have people hoarding points they’ll never get a good value out of.

Personally 1.7 cents per Ultimate Rewards point is a value I’ve long felt good about, and continue to feel good about. By my logic:

  • Redeeming Ultimate Rewards points for 1.5 cents each towards a travel purchase isn’t an ideal redemption, though others can value the points slightly less and find this to be a great redemption
  • While I don’t value the points of any individual transfer partner at 1.7 cents, I intentionally value Ultimate Rewards points at a premium, due to their flexibility;

I’m curious to see how my valuation of Ultimate Rewards points compares to how you guys value them.

How much do you value Ultimate Rewards points at?

Regarding Comments: The comments on this page have not been provided, reviewed, approved or otherwise endorsed by any advertiser, and it is not an advertiser's responsibility to ensure posts and/or questions are answered.
Regarding Comments: The comments on this page have not been provided, reviewed, approved or otherwise endorsed by any advertiser, and it is not an advertiser's responsibility to ensure posts and/or questions are answered.
  1. This is such an interesting topic. I use CPM as a baseline, but there are some circumstances where it isn’t terribly useful.

    For example, if I need to get to Tokyo from Detroit, I may find some cash tickets for $900, connecting in ORD with a long layover on an inferior product. I may find some end-on-end options for even less, going through somewhere like LAX. But, I see DL has a RT in Y non-stop for 70K miles, but with a cash price of $1700. Now I won’t pay $1700 for the non-stop, but 70K miles for the convenience is a good deal when I have a surplus of DL/MR points. Does that mean I’m getting less than 1CPM because I could have added 12 hours and done a nested ticket through LAX?

    Alternatively, when flying in J or F, I use points. I don’t have the cash for $4K-$8K RTs to Asia on great carriers. Not going to happen. But (thanks to you) I tried to do some of my TPAC travel in business, for reasons we all know. The value of points and miles isn’t necessarily the CPM, as I’d never pay that amount for the ticket–the value is that I GET to fly a product I’d never be able to pay for. I’ve tried hard to determine the value in business class to me in monetary terms, and it is difficult. I wouldn’t pay retail, and it is hard to add up the individual perks to determine what their worth to me.

    Bottom line, I don’t always use a direct comparison to USD when using my points.

  2. Edit to above: I “try to do”, not “tried”. There is no past tense for trying business, once tried, it becomes the goal!

  3. Instead of thinking about cpm, I look at how many miles does it take for me to fly 1 miles in J class or Y class. My aim is to spend 5 miles for 1 flown miles on long haul equipment or
    3 miles for 1 flown miles in Y class.

    Example, 62500 AS miles can be used on BAH HKG JFK (I just booked).
    the flown miles is 12035 miles. this is a bit over 5 miles per 1 flown miles in J class.

    I find UA and AS are still the easiest programs to meet this benchmark.

  4. “If you redeem 100,000 miles for a ticket that would cost $10,000 in cash, you’re not actually getting 10 cents per mile of value, assuming you wouldn’t have paid that in cash.” True, sort of: I would not have spent $10,000 for that ticket. But when I stow my stuff and sit down, knowing that in a couple hours I am going to laying flat, I might actually get $10,000 worth of satisfaction. For that brief moment — maybe for the entire flight — I’m in the zone. I forget that I don’t even have $10,000 cash to spend on a plane ticket. I’m getting $10,000 in value without spending the $10,000. Perfect!

  5. I make a spreadsheet of my redemptions with the cash price I would have had to pay to get it at that moment in time and use that as my redemption value per point. In my opinion that is the only objective way to value them and is the most useful metric in helping me decide whether to redeem points or pay cash for a ticket.

    I recently had a perfect example of this with Marriott points. I had a week long redemption in a residence inn in Boston planned in August which set me back 240,000 points. The cash price at the time was $2,181 for that same reservation for a redemption value of 0.91 cents per point. That happened to be the last of my points and I found myself needing to book 5 nights at the Marriott Marquis in NYC over the Christmas/New year week. The cash rate for those 5 nights was going to be $4,452 and with the 5th night free for award stays, it would only cost 180,000 points or a much higher 2.38 cents per point, so I changed my Boston stay to cash payment, took back my 240,000 points, and used only 180,000 of them to book my NYC 5 nights at the Marquis.

    So while I may never had spent $4,452 for 5 nights in a hotel room, the points were certainly worth that to me and helped make the decision on what to do pretty clear.

  6. What do you value membership rewards at?

    I think your evaluation is fair unlike some other sites.

  7. This subject gets more difficult to analyze with frequent business class flash sales and a guaranteed 2% cash back on Fidelity cards. The question becomes should I use my Fidelity card on unbounded spend or Chase Freedom to avoid not having the marginal miles for a specific award problem. Have rarely used points for hotel stays.

  8. My main use is for business class to Europe. I think a price I would pay for that is $2k or less. If I can avg 2 pts per dollar spend (not everything will be 3 pts per dollar) that means, barring sign up bonus, it would take $50k spend. If I use a 2% cash back card that only gets me $1k so at least that means I’m better off with Chase.

    Of course with bonuses you get more pts. And throw in some wonderful, although not up to your stds, first class awards It makes things worth pursuing.

    Doesn’t explain valuation but does help when comparing options. The people who can do well are those with businesses. I know someone who had a business and was using Amex for his spending and has 30 million pts. I doubt he is spending them wisely, seems mostly domestically.

  9. @Lucky May I recommend that you create a category of reference material that’s super helpful like this to pull up when looking at redemption options. I’ve been bookmarking articles such as this, and “Redeeming Avios On Alaska”, and many others to help me evaluate and gauge options.

    Or organize it by the type of point currency?

    Anyway, good article as usual!

  10. I wonder what will happen to Ultimate Rewards points when airlines finally gut their miles to equal or less than 1 cent per mile. For example, a biz ticket to Europe at $2000 would be priced at $2000*100 p/$ = 200,000 miles.
    Would that be the death of UR?

  11. I understand the logic but disagree with the idea that the value is not the same as the ticket price. Would I spend $10k one way in first class? No. But that’s what they charge. It’s not subjective, it’s not an opinion. It’s just an objective fact. I can’t call them up and offer $2,500 or whatever I think it’s worth. I can pay $10k or not fly in, period.

    So when I pay my 100k miles it makes sense to me that I am getting 10¢ each in this example.

    It just seems black and white since the published fare is the published fair. No opinion involved.

  12. @ Ted — I don’t necessarily disagree with that logic, but it makes it impossible to put a realistic value to the points. Let’s say that I get an average of 10 cents per Ultimate Rewards point when comparing the revenue cost of a ticket to my redemptions (which probably isn’t that far off from the reality). Should I then think of it as earning 30% back on dining and travel with the Sapphire Reserve? Should I be willing to buy KrisFlyer miles for eight cents each because that’s less than the cash cost of the ticket I’m booking?

    So I don’t disagree that this is objectively the absolute value you’re getting per point. But to me that’s simply not a useful figure, because it doesn’t account for what I’d otherwise be willing to pay.

  13. @Ted,

    No one pays 10k for first class. The travel agents can get you a deal for much lower than 10k. They make a fat commission, you think you got a great deal and the airline sells its tickets.

    If you are still so naive after reading this blog, god help you.

  14. Lucky I am one of them long time listeners–first time callers. I just want to say that I greatly appreciated it as a stimulus for not only reader participation, but for writing about a topic in a somewhat nuanced way which yielded some very excellent and provocative comments. Some of your material is very excellent, but the range of topics occasionally sales. Thank you for the style of your analytic style.

  15. Top of mind when handicapping these point valuations, are opportunity costs. They can far outweigh a future value of an as-yet-found or secured award ticket somewhere that you actually want to go (and would go to whether paying with points or cash).

    The value of UR points is the return on spend (return on invested capital) x the cash-out value multiplier (if there is one). Cash is ultimately transferrable, and can be reinvested in higher earning assets (like stocks), until it is needed for a purchase.

    In the case of Chase UR points:
    $1*3*1*$0.1 = $0.03 cpp or 3% return
    Take $0.03 and invest at 1.07, and you get $0.0321 after the first year, for a 3.21% return on spend. The investing of the points float until you need to spend it, provides a multiplier effect.

    If you want to hoard your points to pay for a big fancy airline ticket, it may take you two years.
    Two years of this multiplier will produce a second year return that compounds: $0.0321*1.07 = $0.0343 – or a 3.43% return on spend. That is a 14.3% boost to your value.

    There can be a further multiplier if using some card combinations. Converting 3x points to dollars via the schwab amex platinum, offers 3.75% returns on spending immediately to cash.

    $0.0375 *1.07 = $0.04
    $0.04 *1.07 = $0.043
    Now we are seeing a 43% return on the original point earned, or a 4.3% return on spend.

    Now you can go ahead and live a little, and book some luxury airplane sitting experience, or you can earn an extra 4.3% in purchasing power every year for doing nothing all that complicated. If you discount that by inflation, you have close to 1.4% earned above your cost of capital, and you can get very rich on that over time.

    The lesson illustrated above is that you can use free leverage and create money out of thin air, without any risk. It may not be a huge deal at first, but I guarantee if you play out those numbers for say 15 years, you’ll see some very powerful effects. Your points earned in year one turned into $0.11 a piece, or just shy of 3x the original value (2.93x).

    If you spent $10,000 in your first year of earning points at 3x:
    30,000 points = $300
    $300 x 15 years x 1.07 = $857.21

    If you spent the same amount each year for those 15 years, and did the same cash-out w/ investment:
    450,000 points earned = $4500
    Ending value = $8,818.00

    Over 30 years = $33,160

    So yes, if you take consumption now to fly first class, you will get value, but will you get $33,160 worth of value? Remember that stocks have provided about 10% returns before inflation as long as we have been counting. Also, consider that your spending would rise with inflation too, so you would put ever higher spending on the card over time, and will end up with a much larger balance relative to spend than the above.

  16. Not sure if naiveté (or randomly insulting strangers) has anything to do with it.

    No one may pay full fare first costs bust that’s not really the point. Let’s say you can get the $10k seat for $7k or $5k for that matter, it’s still the price one would need to pay for that ticket. $10k is just a random number being assigned here. It whatever it is. Regardless of $10k or $1k it’s simple math to determine the value of that particular redemption.

    What Lucky says makes sense. I understand the logic and perhaps need to come up with some sort of value but it does not change the fact that (to me) the value is not what I would be willing to pay but rather the average of the actual costs of the seats I was able to redeem.

  17. Not to hijack the UR currency being discussed, but it is notable in my above post, that you may choose to look over at that amex schwab card as a third multiplier.

    $375 a year for 15 years at 1.07 = $11,023
    30 years = $41,450

    There may be a huge advantage to this approach.

  18. Another consideration for using points for cash is the added value of earning mileage return and elite qualifying miles on purchased flights. Flexibility in booking independent of award availability also adds some value in my opinion, especially for those not living in hub cities. So I would argue that the established base value is slightly more than 1.5 cents.

  19. I know this is minor and not about the overall point of the article, but I’d argue the Krisflyer valuation seems a little rich (at least relative to United)… the devalued Kris Chart has a lot fewer sweetspots than before on top of the cash surcharges. Having access to Singapore First is nice, but not enough to warrant a premium over United in my mind which has generally better redemption prices and smaller surcharges.

    I like that Krismiles are even easy to accumulate (Chase/Amex/Citi/SPG), but this obviously doesnt effect the individual point valuation.

    To each their own.

  20. I also disagree with @Teds logic.

    In your scenario, you think you should value the 100,000 points as though theyre worth $10K even though you wouldn’t pay $10K for the same ticket. If that is true, are you saying you wouldn’t trade the 100,000 UR points for $9K in cash if given the opportunity?

    I like Lucky’s view because while his valuations are slightly different from my own, I can appreciate that he seems truly ambivalent about cash or points. If you aren’t indiffierent between using points or cash at a certain rate, then you haven’tn found the rate you REALLY think your points are worth.

  21. Evan-

    I think the $10k is throwing things off here. $10k is just a random number. Let’s just say “x” instead.

    A seat as a real actual value right? It’s not always equal but there is some specific real cost that one would need to pay to obtain a seat. So to me it is more logical to use those numbers instead of “what would I be willing to pay in some theoretical world” figure.

    I do agree with your point and Lucky’s overarching points as well but how we land on those final values may be different. With that said I do like how you phrase it better. The idea of how much cash would you accept instead of the redeemed ticket is in essence the same system Lucky uses but resonates with me more.

  22. Ed: Of course it would be, because why do that instead of a 2.5% cash back card?

    I typically use for business class to europe. You can fairly easily find tickets for $4000 so that’s the price I use. I have had good luck finding 100k-140k each way, so I require at least a 2.5c/mile value in order to use points/miles. But unfortunately I always find these flights with AA and Delta, neither of which are UR partners. Therefore my UR points pile up. So then I break down and buy at ticket through the chase portal with the CSR bonus. Now I’m back to 600,000 UR, so I really hope at some point I will be able to transfer UR to get my 2.5c/mile value. I also have Avios I can never use; I finally actually found a flight on Iberia by calling and talking to a BA rep, but I ultimately cancelled those for better connections.

  23. Wow “The Ink Business Preferred℠ Credit Card offers 3x points on”… ” internet, CABLE, and phone services”

    Cable as in a telegram or cable-tv bills ?

  24. By this logic, ALL points and miles should be valued less than their face value in dollars, because they are vastly less flexible than cash. In fact the flexibility difference between UR points vs. miles for a particular airline is arguably much smaller than the difference between cash and UR points.

    For example, a UR point can be redeemed for 1.5 cents for travel, but that should count as less than the face value of 1.5 cents because you can only use it for travel. More like 1.2 cents in my book.

    This is why I like straight cash back credit cards better than most blogs do. But I guess the extent to which flexibility should matter differs from person to person. If you travel a lot out of your personal funds, then x1.5 redemption on travel is maybe almost as flexible for you as straight cash.

  25. I disagree with your percentages valuing each of the cards because you do not take into account the details. The Freedom card, for example, may earn over an 8% return, but it depends on the category and it is only up to $1,500 per quarter in expenses. Most people do not get use of all of the categories. The other thing is that it depends on the cards that you own because if you hold a reserve card and a freedom card then you could pool the points together, for example.

  26. lamhere, the post wasn’t about the value of spending on various cards. Just about the value of a point once you have it. I see them as two different things. 1. Where do I put my spend, and 2. How to spend my points. But of course they do interact. For example, in determining where to spend, I compare spending on a 2.5% cash back against the 1.5x with Chase Freedom x 1.5x on travel with the CSR = 2.25%. But if I can use them on international business class they are worth 1.5x *.02=3% or 1.5x*.025=3.75%. (At the moment i already have a lot of points and haven’t been able to find a way to use them at these higher values, so my current valuation is 2.25% which is lower than my 2.5% cash back card.

  27. This is a great breakdown. That being said, it is nearly impossible to get a award flight on Korean Air these days.

    Has anyone else experienced this? I’ve tried leaving from three different airports with different date ranges within a span of 3-4 months out, and arriving at 3 or 4 different destinations. I have almost 400k chase points and 145k amex points and it seems impossible to use them and get a decent return.

  28. I use a valuation to determine if I will pay cash or redeem points. Generally for a cheap hotel or domestic coach ticket cash is where it’s at. But for me points allow me to travel and do things I could not afford to do even paying cash. I look at how much I paid to acquire the points for the redemption. For example I got the VA card with the intention of using it for 2 J tickets on DL to Japan (one way). After fees and manufacturing spending to get to 120k points I was out about $400. So I bought enough points for $400 to get 2 J tickets to Japan. I don’t have a ton of spare cash so the economy price would have been double that per person. Which I wouldn’t have been able to afford. And I am flying back JAL first! So my goal in the whole game is to collect points as cheaply as possible either through bonuses or smart everyday spending and use them to do things I otherwise wouldn’t be able to afford to do. This hobby has allowed me, my family, and friends to do things that would not have been possible without points. And a big thanks goes out to Ben for opening up what is really possible. Many years ago when I started I would never have even thought of flying ANA or JAL. But those experiences have been amazing and far superior to my hometown airline Delta. Which I will still exploit if it is possible as the nonstop are sometimes just too convenient. Fun topic, nice post.

  29. I am finally under the 5/24 rule. If I downgrade my Sapphire to a Freedom Unlimited card in order to apply for the Sapphire Reserve, does anyone know if there is a minimum wait time to apply for the Reserve? Should I give it a week or two? And I got my Sapphire bonus three years ago so I should qualify for the signup bonus for the Reserve.

  30. When will Chase ever have mileage transfer bonuses for BA or Virgin like AX Membership
    or Thank You Rewards offer occasionally?

Leave a Reply

Your email address will not be published. Required fields are marked *