Credit cards have seen a major rise in popularity over the past few years. Issuers are throwing large sign up bonuses and “one-uping” others to get their cards in more hands. Most notably, Chase and American Express have been well-known to be the top dogs of the food chain, and, in 2020 and 2021, we have seen them duke it out by adding more benefits to satisfy their cardholders amidst the pandemic. However, what tends to get lost in all this is VALUATION of the rewards. How much is the Amex Gold’s 4x dining multiplier really worth compared to say the Chase Sapphire Reserve’s 3x for dining?
How to Value Points?
This depends. Personally I look at the bare minimum that I can get as a guaranteed return. For example, for Chase, I value my points at 1.5cpp because I know the Chase Sapphire Reserve gives me the ability to use the portal to get said value; For American Express, I value the points at 1.25cpp because I know the Charles Schwab Platinum card will yield me said value. This goes for all the other issuers as well.
It depends on what you want points for. This should be something that is decided before diving head first into the credit game. If you plan to use it for travel, then consider the value you can get for points from each issuer. Youtubers will throw numbers at you when you watch their videos, but many times they are talking about a specific method of redemption. Consider your own valuation based off what you plan on doing with the points.
For example, had it been my parents first getting into the credit card game, and had they watched Youtubers and their valuation, it would not apply. My folks enjoy simplicity and sometimes, the valuations thrown out there, requires work and timing. But until next time…
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