How Not To Find the Most Valuable Credit Card Reward Points

Updated on Apr 01, 2016

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When I was a kid, my family had a pinball machine in our basement. For those of you who are not familiar with this ancient device, think of it as the mechanical version of a video game. Anyways, a classmate had a different pinball machine in his basement, and bragged that he scored more points on it than I did with ours. Of course, it didn't matter since the two games were entirely different and offered different amounts of points for different things, kind of like comparing football scores to baseball scores.

The same flawed logic seems to have overcome the authors of this study by Their press release claims that the Citi Hilton HHonors Reserve Card is the "top rewards points credit card available today." This card does offer 10 points per dollar spent at Hilton hotels, 5 HHonors Bonus Points for every dollar spent on airline and car rental purchases, and 3 HHonors Bonus Points for every dollar spent on other eligible purchases.

That's a lot of points, but the problem is that Hilton points are worth far less than points in other competing reward programs. For example, here are three hotels in the Dallas area, along with their prices in both dollars and points.

hotel example 1

As you can see, the points are worth about one third to one half of a cent each. The same is true in this example from New York City:

hotel example 2

So for each dollar spent, cardholders are getting just one to one and a half cents in value towards award nights at their hotels.

Now let's look at what the Starwood Preferred Guest program offers for the same nights in New York City:

hotel example 3

And some properties for the same night in the Dallas area:

hotel example 4

Once again, we see that each Starwood point is worth at least two cents each towards free nights and sometimes more than three. So even though the Starwood Preferred Guest credit card from American Express only offers one point per dollar spent, that one point is worth about four to six times as much money towards hotel night awards as a Hilton HHonors point. Furthermore, Starwood points can also be transferred to airline miles with 32 different frequent flier programs, which is an incredibly valuable option.

Their other selections

The study also rated the Citi ThankYou® Preferred Card very highly. This card offers two points per dollar spent on dining and entertainment, and one point per dollar spent on all other purchases. These points are worth at best, once cent each towards gift cards and travel reservations, and even less towards statement credits, merchandise, and purchases from It's not a terrible rewards card considering that it has no annual fee, but it certainly shouldn't make anyone's list of the most valuable reward credit cards.

Finally, they list the Barclaycard Arrival™ World MasterCard® (which has since been rebranded as the Arrival Plus). Here is a card that can actually be considered one of the most valuable reward cards, but not for any of the reasons they list. This card offers double miles on all purchases and each mile is worth one cent each as statement credits towards any travel expense. In addition, cardholders receive a 10% mileage rebate when they redeem their miles or statement credits, so each dollar spent returns 2.22% in value as rewards. Since rewards come as statement credits towards any travel purchase, cardholders book their reward travel just as they would any other reservation. Unlike other airline and hotel awards, these bookings are eligible to earn miles and receive upgrades.

How to find the most valuable reward points

First, look at what you can realistically redeem your reward points or miles for. Take a look at your favorite hotels or an award flight you want to take, and compare the points or miles needed with the price of the service. Be sure to consider any discounts that you would have received if you paid cash for the same service.

Then, see how many points per dollar you can get from the company's co-branded credit card. Divide the dollar figures by the points or miles to come up with a value in cents per point or mile. One to two cents in value per dollar spent will always be inferior to a card like the Barclaycard Arrival Plus.

Credit card users typically get more than two cents in value per dollar spent when they book business and first class awards using airline miles, as these tickets generally cost several times more than coach, but typically require less than 100% more miles. Luxury hotel rooms offer great value too, but there can also be some good deals in awards for budget properties, like the Dallas hotel that costs $131, but only 4,000 points.

Overall, when you are guided strictly by the value of rewards earned for each dollar spent, you can look past "points" to find the best reward credit cards.

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