The Value Calculator determines if you are getting the best value for your reward points. It also gives you other options allowing you to maximize your point/dollar value.
Explanation of Value Calculator
Simply input the appropriate values into the orange shaded cells.
Trip Details: For simplicity only enter the values for a single traveler. Also don't mix one way and round trip values. Round trip fares can be less expensive than one way fares, so unless it's a one way ticket use round trip values.
Fare Class: This is the type of ticket you are looking to get. From the drop down menu select; First, Business or Economy. If you select economy a number of calculations are removed.
Enter total points needed for your trip.
Enter any cash required: Enter the total out of pocket expense to get the reward ticket. All tickets have at least minimal taxes and fees.
Enter total points needed for the class of service below the one you are comparing. This option will only appear if you have entered either a First or Business class reward ticket. The purpose is to determine if your ticket has good value.
Are you booking and flying with the same airline?: Select either Yes or No. This is to compare the costs of a reward ticket to the purchase of a less expensive ticket and upgrading with points/cash. You can only do this when booking and flying the same airline. For example, if you are booking with American but flying British Airways you can't upgrade. Even if you have no interest in paying cash for a ticket it can be instructive to understand this variable.
If you answered Yes, then enter the points as well as any co-pay cash required to upgrade. If you are not interested in this feature simply ignore.
Retail fares are used to determine the value of your points and reward ticket. You can use Google Flights to check the fares. Click on the Google Flight button to open a separate window in your browser with Google Flights.
Enter the full price of the reward ticket flight you are looking to get.
Enter the full price of the lowest fare to your destination. This is used to compare your fare and point value against a best case scenario, even though the lowest fare is not applicable to redeeming your points. Also the lowest fare may have more stops as well as different airlines and aircraft.
Enter the class down fare for the flight you are taking. If your reward ticket is in business, enter the coach fare, or the fare applicable to upgrade with.
The intrinsic value of your Reward point is set at .02. You can change this if you'd like. Making it lower simply makes everything look better. A 2 cent valuation is reasonable as you can often get 2% cash back on credit cards in lieu of points. You may receive "bonus" points from initial credit card approvals and might choose to adjust your value accordingly.
Reward points, Cash required, Retail fare and Lowest fare are your input values.
Fare Difference of lowest fare to your fare: Lowest fare minus your fare. Will show in red. Typically will mean your flight has either fewer stops and/or with a better product. If your fare is 25% more than the lowest it will show "Great Deal".
Reward points needed, Cash required and Retail fare in the class below your intended ticket are the values you input.
Fare difference between your class and the class below, Business and Economy in the example. The calculation looks to see if your are getting value for the extra points it costs for premium class. The example has 140,000 points for business and 110,000 for economy, or 27% more points. The fare difference is 236%, $2,200 in economy and $7,400 in business. As long as the increase in required points is less than the increase in fare, then the green bar will suggest the worthiness of the more expensive ticket.
Value of reward points for; your flight, the flight with the lowest fare and your flight next class down. The fare divided by total points gives a per point valuation for the each ticket. Your points have an intrinsic value that was entered. These values are compared. To get a green bar "Great Valuation!" the ticket point value must be >=200% of the intrinsic point value. Meaning, if I paid 2 cents cash for the points and traded it for this reward ticket which valued at 4 cents per point, I got a Great Valuation! A yellow bar "Fair Valuation" is 125% of intrinsic point value. Below 125% gets a red bar "Poor Valuation".
Cost of your ticket based on point intrinsic value. Sum of points times intrinsic value of point plus cash required for the ticket. "Better Value" will show when your saved more on your class of ticket costs compared to the savings on the next lower class ticket. These savings are based on the difference between the intrinsic cost and retail fare for both classes.
Your flight savings from retail fare. The cost of your reward ticket is compared to the retail fare for the ticket. Cash difference and percent savings is shown. If your ticket is 50% or more less than the retail fare "Great Savings" shows.
The same calculations are done for the next class down; total cost using intrinsic point value and savings from the retail fare. If you can purchase the ticket for less than the cost using intrinsic point value, a red bar "Save your points" message shows.
The final 3 calculations are for upgrades. Shown are the total points required and the total cost of upgrading including purchase fare, co-pays and point cost. That total is compared to the cost of purchasing the premium fare outright. This can be useful when not enough points are available for reward travel in a premium class or in the event it works out to be less expensive and a better use of your reward points.