Point valuation is a difficult thing, and you can actually find pretty strenuous debates about it. To me, valuing my points is instrumental. Without doing it, I find I'm a bit at a loss when figuring out which card to use or which points to use, pr whether an annual fee is warranted, so I try to be a bit compulsive about it. And the ultimate question is whether it makes sense to spend a dollar on a credit card for a reward point when I could be simply getting 2 percent cash back.
Point valuations to me fluctuate based on a lot of things -- how much of a currency I have, how flexible it is, for example. But, by and large, I tend to think hard about my values and stick with them. I think it's a trap to value points based on how you redeem them. Can you use 110,000 United miles for a $16,000 Lufthansa first class ticket? Yes. But that doesn't mean United miles are worth 14.5 cents each. You never would have purchased that Lufthansa ticket with cash.
To me, the true value of a point at any moment in time is the price at which you would be at equipoise with respect to whether you would take the point or take cash. For example, I hear people say that they value starpoints at 3 cents. To test that, I think one needs to honestly ask one's self, what is the least amount of money I would take instead of taking starpoints. So, would you rather have $3,000 cash or 100,000 starpoints?
Anyway, I value chase points around 1.75 cents, Amex points around 1.7 cents, and starpoints around 2.2 cents, to the extent anyone cares.
Yes valuation is a tricky thing, I don't think those awesome redemption's make for example those united points worth that much, but it certainly does bump them up a small amount, to me points allow me to do and experience things I would not have been able to otherwise, so in my book it doesn't make sense to throw those ridiculously expensive experiences out the window.
When it comes to 3k cash or 100k starpoints...well since it's the same value I'll take the cash because it's more flexible
(but honestly I value them at about 2.5)
I value whatever points will get me there free
. My travel goals are to pay as little as possible. So if I have UR points and Starpoints, whatever combo will get me free air & hotel works. I don't have a huge bank of points right now, so it's often whatever points I have enough of. If I had a big points bank to work with, I would value them differently.
I agree with you from the "least-amount-OOP" perspective and from the standpoint of not having tons of points making them stretch as far as possible.
As far as Starpoints and UR points, I find UR points so much easier to earn, so it's harder for me to spend my Starpoints since I use them for the 1:1.25 airline miles transfer (when you redeem 20K Starpoints at a time) to many airlines. In fact, I will likely buy Starpoints on the current sale because 1) I have a specific plan in mind for them, and even if I don't end up using them that way 2) having that bank of points allows some flexibility.
I'm planning a trip to Italy for June 2018, and have been keeping a close eye on AAdvantage flights so I am working on building up AAdvantage miles. I've churned the Citi AAdvantage card & want to build up a stash of AA miles in order to upgrade to Business class if those flights become available. I find AA miles hard to earn, even with shopping through their portal and dining program. I plan to apply for the Aviator card for another 50K AAmiles and am hoping for American to run a promo on the transfer of Starpoints like they have the past two years (20K Starpoints --> 30K AAmiles) in Aug/Sept.
Right now I'm partial to AA awards since there isn't any change fee as long as the origin/destination remain the same, which is not true of many other airline award flight programs. With DH's job I need the flexibility to make changes.
Excellent points. While we redeem mostly for first class, I don't value my miles based on the price of the ticket either. Realistically, if I were to place a fixed monetary value it would be based on what I would actually be willing to pay OOP for that first class ticket in real money at that moment in time. But that fixed line of thinking doesn't work for me. My valuation falls more along the lines of what can I normally do with those miles (with regards to the flight experience), how easy are they to earn for me, what is the opportunity cost by using them over cash and how many of them do I have at the moment. I'll use some recent examples since I just quite literally finished all the flights for next year's big fat Adventures By Disney China vacation.
Paid $319 each for flights in first on Delta (FLL-JFK) and Delta wanted 32,500 each. I don't value Sky Pesos all that much. Still, I'd rather earn some butt in seat Sky Pesos at this price. We paid using the Amex Plat so we will be getting 5x in MR for the purchase as well. Earning 5x MR was more appealing than paying with UR or MR as money for me at the moment.
500,000 points (SPG, MR and TY) for flights on Singagpore Suites (JFK-FRA-SIN-HKG) for 2 people (250k each) that would be over $20,000 OOP. I'd never pay that much money for a flight, even one as cool as this. So the value would not be 4 cents per point. I think I would pay $5,000 OOP for this particular flight if it was a special occasion like a honeymoon, anniversary or special birthday or something. So I'd say we got over 2 cents in value per point. We have to take into account that for every 20k SP points I transferred I received a 5k bonus too. SPG points are really tough to earn. We've been hoarding them for a few years. However, between the uncertainty of what may happen to the SPG card post merger completion with Marriott and the awesome once in a lifetime experience of flying suites class, I was fine with the big splurge. I didn't care whether or not it is a good use of points, it's all about the experience in this case. I don't know when I'd even have the chance to try something like this again.
30,000 BA Avios for flights in business on JAL (PVG-NRT) for 2 people (15k each). Oh this was a no brainer. The flights were a little over $1000 each which I wouldn't pay for a 3 hour flight. BA is a UR trasnfer partner and UR points are the easiest to earn. Avios are not worth 7 cent each to me. I would have conceivably paid $400 each for the flight so I'm getting a 2.6 cents per Avios point on this one which is pretty good.
160,000 AA miles for flight in first on Japan Airlines (NRT-ORD) for 2 people (80K each) that would be $11,400 per person OOP. Nope, I would never pay so much money for that. Of course, I don't think my AA miles are worth 14 cents each either. DH and I have about a million AA miles at the moment. This one wasn't about the experience either. DH and I both have to be at work the day after we get back home. I needed to find a flight that could get me from Tokyo and back to Florida in the least amount of time.
Paid $400 each for our flights in business/first on AA from ORD-FLL. AA wanted an additional 45,000 AA miles for that. Are they insane? I would not shell out 45k miles for a 3 hour or so flight when I know 80k AA miles can get me to Japan in first. I'm sure I will be going back at some point to see Japan in addition to the Disney parks LOL This one, we could pay using the Amex Plat and get 5x MR per dollar. I'm also taking into consideration that I just received a notice from AA stating that I earned gold status
I am guessing this was because we "paid" for some of our flights with AA gift cards and TY points. I'm not quite sure how status works. I did read that you get a 40% bonus on your butt in seat earned miles. So between that, the 5x MR and knowing what I could do with just 80K AA miles I wasn't relinquishing 90K miles for a short domestic flight even though we've got plenty to burn.
So there are some of my thought processes as to how and why I used certain miles for a redemption or chose to pay cash.
It drops off in November.
I'm good with that. While I prefer direct flights when possible, I will position myself to get the better flight experience if it is a long flight. When we flew to Hawaii from Florida, I chose a roue that would position me to connect in DFW so that the rest of the flight to Hawaii would be in a lie flat seat. The only AA plane flying to HNL with lie flat seats was in DFW. 
