Many of the blogs I follow have catchy ads talking about the newest “100,000 point card”. That may sound like a deal too good to pass up, but don’t be tricked into thinking that because it’s a lot of points, it’s worth a lot to you. So, how do you figure out what is worth it to you?

The first thing you need to understand is: not all points are equal. In fact, there are several websites that are dedicated to comparing the value you can receive from credit card rewards points. I use several of them, and they are very helpful. But to really understand the valuation, there are a few key things to note.

Credit Card Issuer Points vs. Co-branded Card Points

1. Credit Card Issuer Points: Credit card companies all have their own cards that they market. You’ve probably heard of the Chase Sapphire Card, Capital One Venture Card, or the Citi Prestige Card. These are cards that earn credit card points that can be redeemed in very flexible ways such as for gift cards, shopping at places like Amazon, or travel. Typically you get the most value out of these points when you redeem them for travel; that’s solely what I use them for. Each issuer has their own way of letting you redeem points – some through a portal similar to Expedia or Kayak, some by transferring points to travel partners, and some through tools that act like an expense eraser that just let you deduct travel expenses directly from your monthly bill. The flexibility of these points is really what makes them valuable, but there is a catch: when you cancel the card, you lose the points. That means you need to be strategic about using your points well before you plan to cancel your card.
2. Co-branded Card Points: Co-branded cards are cards that are issued by a credit card company on behalf of another company such as Delta, American Airlines, Hilton, or Marriott. The points you earn are directly with the co-branded company and not the issuer. They are not nearly as flexible as credit card issuer points, but there is one advantage to them: when you cancel the card, you keep the points. This can be very helpful as you start to navigate the world of amassing credit card points.

Card Points Are Not Equal In Monetary Value

It’s easy to start thinking about points as 1-to-1 in value, but unfortunately it doesn’t work that way. In fact, depending on the card issuer, you may have different valuation of the same points depending on what card you have. So it is important to pay attention to how those points are actually valued.

A good example of this is Chase. If you have the Chase Freedom card, the Chase Sapphire Card, and the Chase Sapphire Reserve Card, you earn Ultimate Rewards (UR) points with all of them. But with the Chase Freedom card, they are worth $.01 a piece, with the Sapphire card, $.0125 a piece and with the Sapphire Reserve card, $.015 a piece. That may not seem like a lot, but it’s the difference between $500 and $750 when you redeem 50,000 points.

That being said, the Points Guy does a great job at calculating the value of points. If you’re able to redeem your earned points at or above the value he specifies, you’re doing well. If you find a deal that is less than that, you may want to consider using your points in a different way.

The Highest Monetary Value Points May Not Be The BEST For You

Just because a certain card point is flexible or has a high value, doesn’t necessarily make it the most valuable to you. The most valuable points are the ones that you’ll actually use.

Sometimes when I’m reading a “famous” points blogger, they’ll talk about their first class flight to some obscure city just because it was a “great value” for their points. I take a different approach to points. I want them to be usable for the places I want to visit or travel to often. At the end of the day, the points that you’ll use are the ones that are the most important

Points Aren’t a Good Holder of Value

That brings me to my final point. USE YOUR POINTS! It can be really tempting to save and save for a big trip. But history has shown that airlines and credit card companies change their policies often on points, and rarely does that include points becoming more valuable. My goal when I earn points is to use them in the next 12 months. If I can’t use them before then, I risk wasting them or getting a bad redemption value.

Hopefully this helps you understand points a bit better. If you have any questions, leave them in the comments below and I’ll get back to you! Happy travels!