Redemption Rate
What redemption rate means for credit card points and miles, how to calculate cents per point, typical redemption rates by program, and how to find the highest-value redemptions.
What Is Redemption Rate?
Redemption rate refers to the value you receive per point or mile when you use your rewards. It is typically expressed in cents per point (cpp).
The formula is simple:
Redemption rate = Cash value of redemption / Points used
Example: You use 50,000 Chase Ultimate Rewards points to book a flight that costs $750 through the Chase Travel portal. Your redemption rate is $750 / 50,000 = 1.5 cents per point.
Why Redemption Rate Matters
The value of points is not fixed. 10,000 points might be worth $60 redeemed one way and $150 redeemed another way. The redemption rate determines whether your points card is actually outperforming a cashback card.
A card earning 2x points sounds impressive, but if those points are only worth 0.5 cents each, you are effectively getting a 1% return, worse than a flat 2% cashback card.
Typical Redemption Rates by Method
| Redemption Method | Typical Rate | Notes | |-------------------|-------------|-------| | Gift cards | 0.7 to 1.0 cpp | Usually poor value | | Statement credit (points as cash) | 0.5 to 1.0 cpp | Depends on program | | Chase Travel portal (Preferred) | 1.25 cpp | Fixed portal rate | | Chase Travel portal (Reserve) | 1.5 cpp | Fixed portal rate | | Amex Travel portal | 1.0 cpp | Generally poor value | | Capital One Travel portal | 1.0 cpp | Standard rate | | Airline partner transfer, economy | 1.0 to 1.5 cpp | Route-dependent | | Airline partner transfer, business class | 1.5 to 5.0+ cpp | Best redemption tier | | Hotel partner transfer (Hyatt) | 1.5 to 2.5 cpp | Among best hotel programs |
Finding High-Value Redemptions
The highest redemption rates come from transferring points to airline or hotel partners and booking specific awards that are underpriced relative to cash costs.
A business class seat from New York to Tokyo that costs $5,000 in cash, booked with 70,000 ANA miles (reachable by transferring Amex Membership Rewards), represents a redemption rate of $5,000 / 70,000 = 7.1 cents per point.
Tools like AwardHacker.com, Point.me, and Seats.aero help identify where points have the highest redemption rates for specific routes.
The Floor vs. the Ceiling
Cashback cards have a fixed floor: 1% or 2% is 1% or 2%. Points cards have a floor (often 0.5 to 1 cpp for poor redemptions) and a ceiling (2 to 7 cpp for excellent redemptions). The question is whether you will consistently achieve redemption rates above your best cashback alternative.
For a direct comparison, see cashback vs. points: which is better?
See also: rewards rate, transfer partners.