While it probably doesn’t make a whole lot of difference, it looks to me, like the links are “pretty links” affiliated with View from the Wing, Gary’s blog. I’ve seen others including Frequent Miler, and it appears his link is similarly specific to him. I don’t see this as a problem, just something to be aware of. Now is Plastiq a bad thing? No, it provides an avenue for paying bills with credit cards at a potential gain (even if you use a 2% cash back card you’re getting .01% more than you’re paying, but that may be in the rounding).

This is easy, and does not incorporate the opportunity cost of assuming 2% as the base. It is as simple as taking your cost of acquisition, divided by the number of miles that you are accumulating. Example, you spend $206.95 for a Visa Gift Card from Staples with your Ink Plus, and load $200 onto your RedBird, then you’ve paid $6.95 for 1,000 UR points, or $0.00695 per point.

The skeptics of you may highlight the fact that I wrote about this in the past.

Redemption Value

This is easy as well, imagine you have just booked an Emirates First Class flight with 100,000 Alaska Miles. Let’s say the market cost of that flight is $13,343.80.

So that ultimately means that your Alaska miles are worth $0.133 per mile. Wow, that’s quite the value!

Fair Trading Price

Frequent Miler came up with this, and it took not one, but two posts explaining it. I’m not saying that it is that hard to understand, I’m merely saying it is a pretty complicated approach. The easiest way to describe it is, that this is the lowest, straightforward, repeatable prices for buying points. Ok, I’ll be honest, I love repeatable processes. In fact, I really appreciate the approach. That said, I still have a hard time understanding Fair Trading Prices. I understand the concept as it incorporates a ton of components, including annual fees, the cost of buying the points, and category bonuses. I’m sure Frequent Miler would include more if he could quantify it. That said, you don’t have to do the math, you can just leverage Frequent Miler’s Fair Trading Prices.

Flat Rate

The easiest of all: 1 point equal 1 cent. Simple as that. If you have a 2x card, then you’re getting 2 cents per dollar, or 2%.

Voodoo Math

I call this Voodoo Math, because it includes a variety of factors, and I’m not entirely certain that I even know all of them. For example, One Mile at a Time’s Points Valuations don’t really include any notes, so its hard to figure out how he comes to these numbers. The Points Guy offers his valuations monthly (and for once, I agree with him, because these things do change quickly). Gary perhaps offers the most clear justification and background discussion of points values, but nonetheless offers his own. I wish I could find others, but the fact is, when I read valuations like this, I think a couple things:

• These generally incorporate logical benefits like SPG’s 25% benefit when transferring to other programs (like American Airlines)
• These can be further bolstered to justify annual fees, or otherwise market credit cards.
• These can also incorporate personal biases, e.g. I really want to fly Korean Air First so Ultimate Rewards points are more valuable now.

Now I realize my second point is harsh, but why else would you attribute a value to points, other than perhaps a Fair Trading Price? Because you want to show that one particular credit card is better than another, and it is worth a hard pull. Don’t get me wrong, I apply for a bunch of credit cards each year, however I just have to be skeptical, and would advise others to be skeptical. Let’s circle back to Gary’s post:

As long as you’re using the Everyday Preferred card at least 30 times a month for purchases, it’ll earn at least 1.5 points per dollar on all of your spend. And I value Membership Rewards points at 1.8 cents apiece. So each dollar spent on the card, earning 1.5 points, gets you a 2.7% rate of return.. and a cost through this service of 1.99%. Profit. – Excerpt from View from the Wing

Here’s my concern: Gary is attributing a value, a value of 1.8 cents per Membership Rewards point, and thus asserting that even paying 1.99% you can generate a profit. In all fairness, he offers his logic in the underlined section, but I still have difficulty with the word profit, given how quickly miles and points can change in value.

I too even use Voodoo Math for my personal valuations when I make the quick determination of which card to use for a particular transaction, although that’s more because of that third bullet, based on which particular award I see myself doing next.

The biggest challenge I see with the voodoo math approach is the fact that today I might think UR points are more valuable than say Membership Rewards, however, tomorrow Korean Air or United might devalue their program, leading me to have accumulated all of these UR points for a goal line that has effectively moved another 10 yards, or to another zip code (e.g. United increasing awards by nearly 2x in some cases…there’s a multiplier that I don’t like).

Wrapping Up

There are tons of ways to value your points. Is one way better than another? I can’t say, but, the real point is, to be conscious of how others value their points, and how you value your points, so that everyone can speak the same language.

How do you value your miles and points?