First, many FTers get cards mainly for the signup bonuses, so there is no real conflict between "cash back" and "miles." If you get an airline card that gives 40K points to sign up, your choice is not 40K points or $x cash back, it is 40K points or nothing.

Second, everyone has different redemption patterns. When I was single, if I met someone online I wanted to meet in person, I would far prefer to redeem miles for their ticket at the last minute, risking a redeposit fee if they changed their mind about coming, than buy a nonrefundable ticket weeks in advance. Now that I'm married, I want to buy business class tickets for my wife to go to Europe to see her family. In both cases, the value to me of the miles I earn exceeds the value of cash back I would get.

Some people don't know the best deals, or are seduced by flashy TV ads into less-than-optimum cards. Experienced FTers usually don't fall into that category.

Finally, not everyone is completely rational. Some people who spend (say) $1000 a month might feel that $15 a month cash back is something they'll never feel or see, but if after four years they've earned 48K (call it 50K) points and get a couple of free tickets, that feels like a "good deal" even though in a strict financial sense it cost them $720 in foregone cash.

Thanks redtop.

I have another question about these credit cards that generate points instead of miles. It appears to me that when redeeming the points the credit card company controls the points used based on how much the ticket cost. They also say they have a bonus because as long as there are seats for sale you can use your miles. i.e., $200 seat = 20,000 flexpoints $1,000 seat = 50,000 flexpoints.

If, on the other hand, I have miles in my ff account I can search for available award seats regardless of the price the seats are being sold. Or is this correct? Are the airlines controlling seat availability based on price? To answer my own question, I'm not sure I think they are because I've gotten some pretty pricey seats with my miles at standard awards if I book early enough. Am I right with my thinking that pure miles generated from cards like spy, airline cards, Marriott are better for booking than points:seats?

As already discussed, determining a fixed value for points is nearly impossible. As a short-hand, a lot of people will simply see what that award ticket or award night would have cost them out of pocket and then divide by the number of points used. That's a good method if you are using points for otherwise routine travel.

But many of us use points for travel (or class of travel) that we would never pay for out of pocket. I have a Hilton redemption next summer that, by traditional metrics, is netting me about 7.2 cents per point. On top of this, the points are usually earned at 6pts/$. Using these numbers, I'm getting a whopping 43.2% back on all purchases on that card. This is misleading, though, as I would never be doing this trip if it weren't for the points. So I'm not really saving 43.2% per transaction, I'm just earning a trip that I would not otherwise take. And that, my friends, is why points are invaluable. :)

Because of this, I think the best strategy is to figure out what trip(s) you want to take and then devise a strategy around the end-goal. For many, this is preferable and less stressful than trying to accumulate "the most valuable" points. If this approach is not possible or practical, then I say just earn your favorite points and don't stress about earning the absolute greatest value (unless it's a large difference, like 1 HHonors pt vs. 1 Starwood pt, but there isn't really much stress involved in that decision). You can drive yourself crazy trying to figure out the precise valuation.

And that, my friend, is how miles and points should be used, and valued at - not a sense of dollar and cents.

It is such a simple concept that miles and points are great life-enhancers but so many people fail to see that - rather, they struggle to attach a $ sign to those miles / points and try to perform the impossible task of giving them a tangible value in the term of money.

And this is exactly what I'm trying to do. Since we have Marriott timeshares those points allow us to travel very nicely many times a year. It's a couple possible trips in the next 2 years I'm working on padding some accounts for flights and hotels.

In order to be prepared for hotels in Europe I can choose to pad either one of these accounts. I noticed you have both in your list of programs. It's my understanding Starwood has the greater value. Am I right? (With help I won't have to stress about it :) )

Yes, an SPG point is more valuable than an Hhonors point, but Hhonors points are much easier to come by. Why not see what's available in each program for where you want to go then figure out what it will take to get the needed points for your choices.

Miles and hotel points can be used for awards that may be worth much more than what an equivalent number of fixed-value points (ie Thank You pts, Flexperks, etc.) could get for you provided there is availability which typically requires flexibility. Fixed-value points typically provide the advantage of not requiring flexibility.

Or you can just be like my buddy who is happy to pay his mortgage and taxes (and the service fee) so he can earn avios for "free hotel nights."

That my friends is why companies have these programs. Not everyone is FT material :)

Point for point, Spg is more valuable than HHonors. But as noted, HHonors are earned at a faster rate on all of the various partner credit cards. So if you are just talking about earning points from basic spend, you will want to consider that amex spg is 1pt per dollar on almost everything, whereas hilton points can be earned at 3-6 pts per dollar.

Also, note that hilton citi visas are highly churnable, so you can collect about 100k hilton points every 65 days on sign up bonuses alone. Amex spg bonuses are much more limited. If you have a long horizon, I'd say churn hilton cards (hilton has far more hotels, also).

Finally, don't forget that diversification is key to a healthy points portfolio. It won't hurt to get both types of cards. Maybe put basic spend on spg, and collect HHonors through high earning spend categories and sign up bonuses.

You both get 1000 of my special gg Thank You Points redeemable for one very sweet stray cat.* *Offer limited as there is only 1 cat. Pick up required.

Can someone explain a bit more here? Like how to use Starpoints for cash + points? Does this mean at hotels? Is that all?

Yes. When you are booking at a Starwood hotel, there is always the option to pay cash, sometimes the option to pay with points only, and sometimes the option to pay with cash and points. Cash and points is often a great deal, especially at the lower-category properties. For instance, I just reserved a $300 room for 4800 points and $90 cash.

Where can I get my free cat?!

Moderator action
 

Some earlier discussions of points valuation have been merged into this thread.

Thank you. You answered 2 questions at the same time. First the room + cash and then when I did the math I figured you got a value of $.04375 for the points. Can I ask if you checked on using the 50% coupon that comes with annual spg card fee and how that compared?

If you also want a Thank You cat I'll go look for one :)

Right here in lovely Plymouth, MI. He's very sweet and begs to come in but I'm already housing another runaway who's owner gave up taking her back home. What can I say, they love me.

Gardengirl -

You may also want to look into SPG's Flights and Nights program.

In short, you redeem a certain number of SPG points (either 60,000 or 70,000) and in return you get 5 award nights at a category 3 or 4 hotel + 50,000 airline miles. I haven't used this option, but it seems like it could be a great value in the right scenario. I think it saves you 8,000 Starpoints at Cat3 hotels and 10,000 Starpoints at Cat4 hotels, as long as you don't mind transferring some Starpoints to an airline. Take a look at the link for more details.