What is the true value of Membership Reward Points? How do you guys maximize it?

[Anonymous]

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@SouthJamaica wrote:

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@Anonymous wrote:

I got the Amex gold recently and it had a 50k MR sign up bonus. I intend to use it on 4x dining but apparently the points are worth a lot less when redeemed for cash/amazon. 

Whats the best way to maximize the points? I'd like to at least get 1:1 ratio on it. The only way I saw online was by travel, but I don't fly often. 

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For me their highest value has been slightly less than 1.2 cents.

I usually trade them for Jet Blue points, which are worth 1.5 cents each to me.

MR points trade on a 5:4 basis, so that makes the MR point worth 1.2 cents each.

But then Amex passes along to us its excise tax, which slightly reduces the value.

As near as I can tell, for people who don't travel they're not worth getting involved with.

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if you use jetblue exclusively, amex gives transfer bonus like twice a year to jetblue.

[KJinNC]

I see references to 2 cents being easy to get, but I can't figure out how. The examples seem to be very specific. For example, I saw someone talking about getting a flight to Japan for 90k points, with a lay-flat seat. That is a $6,000 ticket, so that's a great conversion rate, but when I check flights to Europe, I see costs more along the lines of 44-50k points for economy. That's probably better than a penny a point but it's not two pennies a point. I might be looking in the wrong place. Personally, I'm happy at a penny a point, but would love to be schooled on how to maximize this value.

[Anonymous]

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@KJinNC wrote:

I see references to 2 cents being easy to get, but I can't figure out how. The examples seem to be very specific. For example, I saw someone talking about getting a flight to Japan for 90k points, with a lay-flat seat. That is a $6,000 ticket, so that's a great conversion rate, but when I check flights to Europe, I see costs more along the lines of 44-50k points for economy. That's probably better than a penny a point but it's not two pennies a point. I might be looking in the wrong place. Personally, I'm happy at a penny a point, but would love to be schooled on how to maximize this value.

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you are not wrong. It is next to impossible for 2cpp or more if you are not flying international business. so its really two things one needs to consider when booking:

1. whats the cpp.

2. whats the total points.

does one want 10cpp but cost 200k on business? or do you want 1.3cpp but cost 60k on economy for the same trip?

[RSX]

funny i saw this thread - just yesterday i logged into Amex and had 14,000 points and a $60 statement

i first selected for 5000 pts to pay off each $30 charge

then i happened to select an option for a gift card instead - i looked for Home Depot as i planned to buy a storage rack for my garage yesterday

when i selected gift card, the 10,000 points turned into $100 for an HD gc

so by simply browsing around, i 'gained' $40

i am using the points as i am contemplating closing the Amex before the upcoming Jan $95 AF

so it is worth poking around and checking options in order to maximize the points return 

[iced]

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@KJinNC wrote:

I see references to 2 cents being easy to get, but I can't figure out how. The examples seem to be very specific. For example, I saw someone talking about getting a flight to Japan for 90k points, with a lay-flat seat. That is a $6,000 ticket, so that's a great conversion rate, but when I check flights to Europe, I see costs more along the lines of 44-50k points for economy. That's probably better than a penny a point but it's not two pennies a point. I might be looking in the wrong place. Personally, I'm happy at a penny a point, but would love to be schooled on how to maximize this value.

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Your experience is typical. The better valuation comes at higher point redemption values - international premium cabins. Lower point redemptions have lower value, and this makes sense. It puts the bar for the good valuations above what one can get with minimal spend and a SUB; if it didn't, it would be exploited heavily by churners and even casual bonus chasers, leading to point devaluation to offset costs that would once again push the points required for better valuations up out of the casual spender/flyer's grasp.

I think of it like the ticket redemptions at your local craptastic pizza/game joint. You can't get the good stuff with 500 tickets, and the return value on tickets/dollar is lower on the lower ticket items than it is on the big ticket items. It might cost 2000x more tickets for the PlayStation, but it cost them 2500x more to buy it for you than the pencil eraser or rubber ball they give out for 500 tickets.

[wasCB14]

BA Avios for domestic AA

Virgin Atlantic for Delta flights

Transfer bonuses can defiitely boost MR value if you know you'll be using the miles before too long.

[Anonymous]

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@iced wrote:

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@KJinNC wrote:

I see references to 2 cents being easy to get, but I can't figure out how. The examples seem to be very specific. For example, I saw someone talking about getting a flight to Japan for 90k points, with a lay-flat seat. That is a $6,000 ticket, so that's a great conversion rate, but when I check flights to Europe, I see costs more along the lines of 44-50k points for economy. That's probably better than a penny a point but it's not two pennies a point. I might be looking in the wrong place. Personally, I'm happy at a penny a point, but would love to be schooled on how to maximize this value.

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Your experience is typical. The better valuation comes at higher point redemption values - international premium cabins. Lower point redemptions have lower value, and this makes sense. It puts the bar for the good valuations above what one can get with minimal spend and a SUB; if it didn't, it would be exploited heavily by churners and even casual bonus chasers, leading to point devaluation to offset costs that would once again push the points required for better valuations up out of the casual spender/flyer's grasp.

I think of it like the ticket redemptions at your local craptastic pizza/game joint. You can't get the good stuff with 500 tickets, and the return value on tickets/dollar is lower on the lower ticket items than it is on the big ticket items. It might cost 2000x more tickets for the PlayStation, but it cost them 2500x more to buy it for you than the pencil eraser or rubber ball they give out for 500 tickets.

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Churners and MS'ers are the ones getting the First class tickets. With the airline gift cards and no annual fee on the Gold the first year You could get two golds for 100k.  4 Platinum's for 255k.  Amex Green for 25k.  A bunch of other cards for 25k.  Downgrade Gold to Green and then upgrade again. Downgrade Platium to Gold and then upgrade again.  Until the pop-ups started and Amex got crafty it was pretty easy to get first class tickets. 

So even at 1CPP Gold cards were worth an easy $700 with a 1k spend.  

[longtimelurker]

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@RSX wrote:

funny i saw this thread - just yesterday i logged into Amex and had 14,000 points and a $60 statement

i first selected for 5000 pts to pay off each $30 charge

then i happened to select an option for a gift card instead - i looked for Home Depot as i planned to buy a storage rack for my garage yesterday

when i selected gift card, the 10,000 points turned into $100 for an HD gc

so by simply browsing around, i 'gained' $40

i am using the points as i am contemplating closing the Amex before the upcoming Jan $95 AF

so it is worth poking around and checking options in order to maximize the points return 

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Well, that's one way of looking at it!   But the other is to know in advance:  redeeming for cash/credit is the lowest value use of MRs, so nearly anything else, such as giftcards, is going to be better.

[iced]

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@Anonymous wrote:

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Churners and MS'ers are the ones getting the First class tickets. With the airline gift cards and no annual fee on the Gold the first year You could get two golds for 100k.  4 Platinum's for 255k.  Amex Green for 25k.  A bunch of other cards for 25k.  Downgrade Gold to Green and then upgrade again. Downgrade Platium to Gold and then upgrade again.  Until the pop-ups started and Amex got crafty it was pretty easy to get first class tickets. 

So even at 1CPP Gold cards were worth an easy $700 with a 1k spend.  

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Saying that only people flying premium international are the ones twisting and abusing the system while completely ignoring the frequent flyers with aligned credit cards in those systems is...well, silly and wrong.

Unless something has changed, this would be a one-time thing for a churner now since American Express limits SUBs to one per person per card. Those restrictions are in place precisely because people abused the system in the way you described. If you can still work the credit card system to fly international business on the same airline every year or two, enjoy it while it lasts, because they will crack down on that eventually.

Your statement seems to make the assumption that 100% of one's miles comes from credit cards, and this isn't the case for frequent flyers. People who fly 150,000+ miles per year and spend $20,000+ on airfare each year are raking in hundreds of thousands of miles just from flying, not counting the MR/UR earn from that airfare spend. It's not that hard to find Diamond Medallions or 1Ks who earn 250k miles/year from flying. Even the lower tiers who only fly 50k or so miles a year are still pulling in about a SUB worth of miles every year just by sitting in a plane.

Add another 100k UR/MR in earnings on top of it and these users have a steady stream of miles for premium cabin travel, and I can assure you that many of those flyers do NOT use those miles for economy unless they're hauling a bunch of kids somewhere with them.

[redpat]

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@iced wrote:

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@Anonymous wrote:

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Churners and MS'ers are the ones getting the First class tickets. With the airline gift cards and no annual fee on the Gold the first year You could get two golds for 100k.  4 Platinum's for 255k.  Amex Green for 25k.  A bunch of other cards for 25k.  Downgrade Gold to Green and then upgrade again. Downgrade Platium to Gold and then upgrade again.  Until the pop-ups started and Amex got crafty it was pretty easy to get first class tickets. 

So even at 1CPP Gold cards were worth an easy $700 with a 1k spend.  

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Saying that only people flying premium international are the ones twisting and abusing the system while completely ignoring the frequent flyers with aligned credit cards in those systems is...well, silly and wrong.

Unless something has changed, this would be a one-time thing for a churner now since American Express limits SUBs to one per person per card. Those restrictions are in place precisely because people abused the system in the way you described. If you can still work the credit card system to fly international business on the same airline every year or two, enjoy it while it lasts, because they will crack down on that eventually.

Your statement seems to make the assumption that 100% of one's miles comes from credit cards, and this isn't the case for frequent flyers. People who fly 150,000+ miles per year and spend $20,000+ on airfare each year are raking in hundreds of thousands of miles just from flying, not counting the MR/UR earn from that airfare spend. It's not that hard to find Diamond Medallions or 1Ks who earn 250k miles/year from flying. Even the lower tiers who only fly 50k or so miles a year are still pulling in about a SUB worth of miles every year just by sitting in a plane.

Add another 100k UR/MR in earnings on top of it and these users have a steady stream of miles for premium cabin travel, and I can assure you that many of those flyers do NOT use those miles for economy unless they're hauling a bunch of kids somewhere with them.

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+1 All my business travel is FC and BC and my personal plat is used to book other employees also so that total exceeds 30k plus my AIS (ass in seat) miles coach is never an option for my personal travel.  This isn’t gaming anything but paying a lot of money is just the cost of doing business and cc rewards add to it.

So I’m not an MSer and I get plenty of free FC and BC flights.