What is Cents Per Point (CPP) and Why It Matters

Not all points are created equally - and cents per point (CPP) is how we make sense of it all.

CPP is how we calculate the value of our points for each redemption. it helps us decide whether we’re getting a good deal or if we’d be better off just paying cash. In many cases, this simple calculation is the difference between a smart redemption and wasting your hard earned points.

The Three Types of Credit Card Rewards

1. Cash Back

   This one is easy. If your card earns 2% back and you spend $100, you’ll get $2 back - usually as a statement credit or transfer to your bank account. This is the most straightforward kind of reward because you always know exactly what it’s worth.

2. Bank Points

   These come from major players like Chase, American Express, Capital One and Citi. Instead of earning a percentage back, you’ll earn points.

   Example: If you earn 2x points and you spend $100, you’ll get 200 points.

   These points are often referred to as “flexible currency” because you can redeem them in a few different ways:

   • Redeem for cash back.

   • Book travel through the bank’s travel portal.

   • Transfer them to the airline or hotel partners (if your card allows it).

   These transfer partners are where the magic happens - and where savvy travelers can often get outsized value from their points.

3. Airline and Hotel Points

   These come directly from loyalty programs like Marriott Bonvoy, Hilton Honors, United Mileage Plus, Delta SkyMiles, etc. You can earn them by staying at hotels, flying with the airline, buying points, or using co-branded credit cards.

   These points are less flexible - you’re locked into one brand’s ecosystem - but they can still offer great value with the right redemptions.

How to Calculate Cents Per Point (CPP)

Here’s the simple formula we use to calculate CPP:

(Cash Price - Taxes/Fees) ÷ Points Required = Dollar Value per Point.

Multiply that number by 100 to convert the dollars to cents per point (because it’s easier to read that way).

Let’s say a flight costs $500 in cash or 40,000 points + $11.20 in taxes. You’d calculate:

($500 - $11.20) ÷ 40,000 = 0.0122 → Multiply by 100 = 1.22 CPP

This means that each point is worth 1.22 cents for that redemption. Not terrible - especially if your goal is to beat the typical 1.0 CPP you’d be getting from redeeming points for cash or gift cards.

So, What’s a “Good” CPP?

There’s no universal answer, and the value is always changing. Before determining if the value is good, do a search to see what the value is at the time you’re considering travel. Here’s a loose rule of thumb at the time of this writing:

• Cash Back: Always 1 CPP

• Bank Points: 1-2 CPP when used in the travel portal, depending on which card you have. 2+ CPP when transferred strategically.

• Airline/Hotel Points: Varies a lot - anywhere from 0.5 to 2 CPP depending on the airline/hotel and redemption.

Ultimately, the best redemption is the one that works for you - but knowing how to calculate CPP helps you make informed decisions.

Final Thoughts

Cents Per Point (CPP) is a powerful tool to help you make smarter redemptions - and it’s the first thing we look at when deciding whether to use points or pay cash. Once you start thinking in CPP, you’ll never look at your credit card rewards the same way again.

If you’re ready to take your points strategy to the next level - or want someone to run the numbers for you - check our our Credit Card Playbook or Travel Redemption services. We’ll help you build a plan that makes every point count.