How much are frequent flier points worth? [in relation to CC programs]

[albyd]

Hi,

I hope this isn't too much of a newbie question but I haven't found the answer by searching. I consider myself a bit of a credit card reward aficionado. I generally convert my points to either gift cards or cash back. I've found I tend to get approx 1.7% cash back/gift card reward on my spend on bank issued AMEX (CBA Diamond & Westpac Altitude Platinum Plus) and a maximum of 1% on Visa/MC (Macquarie Visa Platinum or Coles MasterCard). Generally also consider these rebates if I'm hit up for a CC surcharge.

I like to travel on Singapore Airlines. I'm trying to figure out how much a SQ point is worth. It looks like there's a lot to it. I'd be interested in some pointers on where to get started to figure out the system for SQ. This will let me compare it to the value of cash back/gift cards. My understanding is that points are best used for upgrades but only if you buy a full fare economy ticket.

Thanks in advance for your help. Look forward to your comments.

Albyd.

 

[Beta4Me]

I'd suggest the best starting place is to experiment with calculating the cost in points of the most common flights you'd like. Then find out the dollars cost. You will then have yourself a points->cents valuation.
Then just work back from that to how many 'cents' you'll earn per dollar spend on your credit card.
For me, I'd earn 1.5 QFF points per dollar spent on my Amex and I'd value the points at 3-4c. So 8' effectively getting 4.5-6% rewards on my Amex spend.

 

[casanovawa]

Yes it simple to work out a rough value for your points... I don't know SQ values etc, but say for QF (using totally made up numbers) if say a return flight Perth to London is say $2000 in economy and $6000 in business, i think the QFF points required are 110,000 in economy and double that in business i guess so 220,000... Now say if to buy an award ticket you will be charged $800 in fuel surcharges and airport taxes you are basically getting per point:

Economy = $2,000-$800 = $1200 you are saving off buying the fare outright and its costing you 110,000 points so each point is worth 1,200/110,000 = 0.0109 so about 1.1 cent per point... So if you are paying less than 1 cent per point you are saving money, if you are spending more than 1.1 cent for each point you are costing yourself money...

Business = $6,000-$800 = $5,200/220,000 = 0.0236 so 2.4 cents per point so once again any points for less is good, don't bother if its costing you more than that...

With QFF you can also buy ASA's which cost you roughly the same amount of points as a classic award but can earn points as well so you need to deduct them etc from the calculation, but i don't think SQ has those...

So a value of a point changes and really depends on how you will use them either for award flights, upgrades or probably worst use is getting gift cards/shopping items... The gift card does though give another base value you can also use to think about your points and compare...

 

[albyd]

Hi guys,

Thank you for all your feedback - much appreciated. All makes sense. I know that flight prices change over time and taxes will be variable so it's a little hard to determine exactly the "yield" from converting credit card points to frequent flier points rather than gift cards from the bank. Is there a rule of thumb to use for the taxes for instance? I see you've quoted $800 and I know that depends on destination.

Also, I'm. Onside ring either qantas or Singapore airlines. Does the hforum have a preference? My thoughts are I can warehouse points in my bank program until I'm ready to transfer them to Singapore to start the clock ticking while still being able to exchange them for something else. With qantas, I can only be direct earn so I agree exchanging qantas points for gift cards isn't very good value.

Albyd.

 

[Cruiser Elite]

albyd I have done 3 x ret F Saver redemptions and 4 x ret J Saver remptions MEL-PEK/PVG and 1 x ret J Saver redemption MEL-AMS / CPH-MEL this year.

IMHO the ONLY way to use KF pts is Saver redmptions for F or J - forget about upgrades.

There is only 1 person in this planet who can truly value ff pts - and that is YOU. Others can give input and opinion - You are the one who must calculate / determine VALUE.

Check $ price to purchase fares - determins pts required to redeem flts or upgrades - do the comparisons - what I think might be a bargain in terms of flt upgrades / redemptions - you might think is ludicrous.

Again MHO - YMMV.

 

[Beta4Me]

Aren't taxes in addition to fare cost regardless of points or $ so should be disregarded for calculations?

 

[dajop]

SQ - take the floor of a Y fare from SE Australia to SE Asia - is 42,500 return + $400 in taxes. For a fares that is usually around $1k. So that's around 1.5c per point. That's the floor. You can do better.

Yes it simple to work out a rough value for your points... I don't know SQ values etc, but say for QF (using totally made up numbers) if say a return flight Perth to London is say $2000 in economy and $6000 in business, i think the QFF points required are 110,000 in economy and double that in business i guess so 220,000... Now say if to buy an award ticket you will be charged $800 in fuel surcharges and airport taxes you are basically getting per point:

Economy = $2,000-$800 = $1200 you are saving off buying the fare outright and its costing you 110,000 points so each point is worth 1,200/110,000 = 0.0109 so about 1.1 cent per point... So if you are paying less than 1 cent per point you are saving money, if you are spending more than 1.1 cent for each point you are costing yourself money...

Business = $6,000-$800 = $5,200/220,000 = 0.0236 so 2.4 cents per point so once again any points for less is good, don't bother if its costing you more than that...

The equivalent figures for SQ (Per-London, note they are higher from east coast, as are QF's) would be 68,000 in economy and 144,500 in business giving values of 1.8c per point in economy and 3.6c per point in business. If earning equivalent is 1:1 SQ is better for most awards, except domestic and the one world multi sector awards.