Why Using Cents Per Point to Measure Award Redemptions Is Ridiculous

Hi. My name is Jonny Tran and I think measuring award redemptions by a Cents Per Point (CPP) valuation is ridiculous. You might think this is a pretty bold statement to make. Especially since it’s my first blog post as Coworkaholic’s new “In-House Credit Card Guru“, but please, hear me out.

Who’s This Guy & Who Does He Think He Is?

Okay, so a little background about me. I graduated from law school five years ago and got a big-boy job.  I was 25-years-old and had never used a credit card (except for the Discover it Card my mom signed me up for when I was a teenager).  She never told me she applied for it. God bless her soul.


I went to dinner with a friend one night and offered to pay with my shiny Wells Fargo debit card.  Please don’t stop reading.  My friend laughed and mercilessly mocked my pathetic, non-point earning piece of plastic.  I believe the exact phrasing she used was, “you are a peasant.” She is a Reddit aficionado and told me to educate myself on /r/churning.  So, I did. I read every FAQ, Wiki and blog post on points and miles like I was studying for the damn bar exam. It was like discovering fire.  Since then, I’ve signed up and received bonuses for thirteen cards, racking up nearly two million points along the way.

Cents Per Point (CPP) and Why It Can Be Misleading

Every resource I read explicitly said you should try to get at least 1.5 cents per point (CPP) on award travel redemptions.  I was an amateur. Who was I to question this churning commandment?  Embracing my inner over-achiever, I refused to use points on any award returning less than 3 CPP.

I followed this rule for a while until I realized that it was actually costing me more time (e.g., layovers), money, and energy striving for >1.5cpp economy award redemptions. Please note, this post does not apply to premium seating award chart sweet spots. Those are dope.

p.s. – if that’s your style, you need to subscribe to the Straight to the Points Award Alerts Email List. Spencer Howard is a redemption boss & has mastered finding awesome award inventory. His email is FREE and always has great finds, such as: nine (9) business class seats to Australia on Delta, four (4) business class seats on Qatar Airways and more.

As soon as I came to my senses, I went back to the basics and have been flying incredibly cheap ever since.

Weigh the Actual (Total) Value of the Flight to the Possible Award Redemptions

You might think of me as a millennial coupon cutter.  I like awesome things but also want them cheap. For my first exhibit, let’s talk about flights:

Follow the Deals But Use Common Sense

I saw a Delta SkyMiles flash sale on award flights to Belize and have been wanting to go for some time now. Immediately checking Delta.com, I thought to myself: “Damn…33,000 SkyMiles and $83.43 in taxes ain’t bad.”

Let’s do the math on this.  For this example, I’ll value the 33,000 SkyMiles and $83.43 (8,343 SkyMiles) in taxes at 1.5 CPP.  That means that the true cost of this flight in my analysis is $620.14 ([33,000 + 8,343 Skymiles] x 1.5cpp).  The cost of the flight would have to be a minimum of $620.14 for this to be a “1.5 CPP worthy” redemption.  I checked Google Flights and Delta for the cost of the flight if I paid cash.

Well.  Not even close.  From a CPP perspective, this award redemption would be .8 CPP (62,014/$502) and a hard pass.  This example is also why I hate the 1.5 CPP rule as a blanket expectation.

The Portals Are Not the Enemy When Trying to Get the Best Value

Okay, so maybe this Belize redemption wasn’t the one I was looking for, right?  Wrong. Enter the Chase Ultimate Rewards Travel Portal. Those who are Chase Sapphire Reserve cardholders can find award redemptions through the Chase Ultimate Rewards portal and can redeem their points at 1.5 CPP automatically.  That’s thanks to a 50% bonus when booked through them. This isn’t always the best option but I’ve found that when you spot a deal (e.g., Cheap Flight Alerts or All The Flight Deals), the portal is typically the best bet.

I looked up the exact same flight on the Chase Ultimate Rewards Portal.  What did I find? The monetary cost of the flight was the same as Delta.com at $502.  Through the Chase Portal, the award redemption cost 33,408 Ultimate Reward points and $0 in taxes.  Yes, the Chase Portal (which is always available) provided a better award redemption than the Delta flash sale.

Keep in mind the fact that I would rather not pay $83.43 in taxes, let’s compare the total amounts I’d have to pay through Delta to the Chase Portal to see the true value of this redemption:

  • $501.13 + $83.43 (Delta Award Redemption Taxes Foregone) = $584.56.  
  • $584.56 / 33,408 UR = 1.75 CPP

Boom.  Finding a deal and going through the portal doubled my value from a CPP perspective and I didn’t have to pay a cent out of pocket—for the exact same flight. Agree or agree to disagree – we all find value in different ways.

What’s The Takeaway?

I’ve been a /r/churner, /r/awardtravel, and BoardingArea reader for years now and can confidently say that the CPP commandment has been grossly overused in determining whether a redemption is worthwhile.  In my example above, no matter what the cost of the “flash fare”, the Chase Ultimate Rewards portal was going to be the better bet as it covers out-of-pocket cash I would have to dish out.

There’s one other element to consider as I defend this perspective. Did you know that when you book through the Chase Portal, your ticket counts as an actual CASH ticket.

You can rest at ease, knowing you’re earning Elite/Premier/Medallion Qualifying Dollars & Miles. Not to mention you might also be resting a bit more comfortably with an upgrade, which would not have been eligible should you have opted for a SkyMiles redemption, no matter your status level.

Should you have status and score an upgrade, you’ll be greatly increasing the total “CPP” value of your award redemption. Or, perhaps you’re close to making that next status level and want to do so with an award ticket, rather than paying cash?

Sure, there will be plenty of folks out there that will give me a hard time for using Chase Ultimate Rewards rather than “SkyPesos” (arguing the “true” value of each currency), but that’s another blog for another day. My main point being this: in the world of ever changing “made up” currencies and new dynamic award charts, there’s now, more than ever, far more factors at play. Don’t lock yourself into a CPP valuation mindset without taking into consideration all the options out there.

The post Why Using Cents Per Point to Measure Award Redemptions Is Ridiculous was first published on Coworkaholic.

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