Should I Book With Points or Cash?

Ah… in the world of credit card points, hotel points, and airline miles, the million (not really) dollar question always comes up when someone is planning a trip… “Hey, should I book this hotel/flight with cash or points?”

It’s a question everyone asks when traveling and trying to find the right deal, and more often than not it’s pretty straightforward once you know the formula behind it and whether your booking is (as Howie Mandel would say) a “Deal” or “No Deal.” In this short guide, I am going to coach you on the formula to gauge a hotel or flight and see whether it’s worth using your points to get more value out of them, or whether you should save those valuable points and opt for cash instead… let’s get started.

((Total Cash Price − Taxes & Fees on the Award) ÷ Total Points Needed) × 100 = Cents Per Point (CPP)

That’s it… you are done with the guide!! Get booking… just kidding, but yes, this is the formula that everyone needs to know (sorry for taking you back to 4th grade with division and multiplication). With this formula, you can calculate how many cents each of your points is worth for that particular booking. And if the points booking still charges you some cash (usually taxes and fees), subtract that from the cash price first, since your points aren’t covering it. Let’s do an example real quick:

Let’s pick a hotel… Park Hyatt Vienna (fabulous hotel).

Let’s say their standard rooms on their website are going for around $900 a night (taxes and fees included, don’t forget about taxes and fees) and you plan to stay in Vienna for three nights, totaling $2,700… for a hotel… depending on your budget, that is a STEEP price to pay. But with a little math and some understanding of points, we can figure out the cents per point, or in simpler terms, how valuable each of your points is.

Let’s say that same room is going for 30,000 World of Hyatt points per night, totaling 90,000 points for three nights with no extra fees. Let’s do the math:

($2,700 − $0) ÷ 90,000 × 100 = 3.00 CPP

Okay, I have my point value for this booking… what do I do with that information now? With that number (3.00 CPP), we can figure out if using your points is a good deal. Head to my Points Toolkit page, filter by Hotels, and you will see all the hotel programs with the average CPP for each one. Some average higher than others, but World of Hyatt, as you can see, averages 1.66 CPP based on six different published average valuations.

With 1.66 CPP as the World of Hyatt average, your 3.00 CPP is about 1.81x the average, meaning this booking is a great use of your points! Congrats, you have snagged a great deal!

Now, what if the points price was a lot higher? Let’s say that same room is going for 60,000 World of Hyatt points per night, totaling 180,000 points for the same $2,700 stay. Let’s do the math…

($2,700 − $0) ÷ 180,000 × 100 = 1.50 CPP

Your points are now being valued below the World of Hyatt average (about 0.90x)… that’s a bad deal, and nowhere near the 3.00 CPP we got at 90,000 points. If this was the scenario, I would hold off on using these points and look for a better deal or consider paying cash. Keep in mind these numbers are specific to Hyatt, but the same CPP formula works for every other hotel and airline program.

Let’s do an airline CPP evaluation now.

You want to go to Japan and you live in Chicago… there are multiple flights a day from Chicago (ORD) to Tokyo (HND or NRT), so you have flexibility in picking a flight with multiple carriers. You have a lot of United MileagePlus miles and want to fly in style, so Business Class is on your radar.

The date is set for March 29, 2027 (this is hypothetical)… you look at flights and see United flight UA881 departing and arriving at your preferred times, but then you see the price… oof… $5,091 one way. That is steep (I don’t know your budget, maybe for some of you that’s chump change… but not for me or 99% of everyone else). When you check how many miles it costs to fly that route in United Polaris, you see it’s 100,000 United miles + $5.60 in taxes and fees.

Okay, let’s do the math, but this time be sure to subtract the $5.60 from the cash price, since that’s a cash charge your miles aren’t covering.

($5,091 − $5.60) ÷ 100,000 × 100 = 5.09 CPP

Great! We have our CPP. Let’s go back to the Points Toolkit and find United’s average CPP (filter by Airlines this time)… it’s 1.38 CPP… this right here is a phenomenal deal! That’s almost 3.7x the average CPP for a United booking.

Okay, so I showed you the math and how to practically gauge whether you should pay cash or book with points… however, what the math can’t show is what’s going on in your head: what your points inventory looks like, and if you do pay cash, how much you’re willing to spend.

The math is a surefire way to tell whether a deal is worth booking with points or cash, however… going back to the Park Hyatt Vienna example, if it was 180k points for 3 nights, that’s a bad deal and I wouldn’t use my points for it… but how many people would actually pay $900 a night for a hotel? Not me… and most probably neither would you, so you would look elsewhere to use your points and get maximum value. Same goes for that $5,091 flight… if you would never pay that in cash, the 5.09 CPP looks amazing on paper, but what you’re really saving is whatever you would have actually spent. That being said, using a decent amount of miles to sit in a lie-flat business class seat for 13 hours instead of paying thousands of dollars (you’re only out $5.60!) is still an incredible deal in my book.

Sometimes, even with a bad deal, it’s a hotel you have been dying to stay at so you bite the bullet (I’ve certainly done that before), or sometimes your budget is already really stretched and you need to book with points even if it’s a bad deal because you can’t put any more money toward it. That is perfectly fine! This is NOT a my way or the highway thing, this is a guide to help you gauge whether you are getting the most out of your hard earned and very valuable points or whether you should save them.

Remember that formula! And if you can’t remember it, at the bottom of my Points Toolkit page I have a Value Calculator where you can enter the program you are trying to use points for, the cash price, the points price, and any taxes or fees on the award, and it will tell you whether it’s a good deal or not.

Thanks for reading if you made it this far! Reach out in the comments if you have any questions about this method or any further insight!

Till next time,

Trailblazin’ Half Asian