Whether you’re buying a car, or a television, it’s always frustrating when the sticker price doesn’t quite tell the whole story. It’s no different when it comes to earning points and miles. Some rewards credit cards jump out at you saying “WOW, earn 6 points per dollar spent” but that’s only half the story, and the other half is far more interesting.

Why? A card offering two points per dollar, or even just one might actually be more valuable to you, and some points currencies are always better than others…

Underlying Points Value

Think of points like any currency around the world: dollars, euros, pounds, rand – whatever. What one is worth has little to do with the other, and the values are constantly changing, based on a variety of factors. This is absolutely the case with points programs too.

Take the pound – it’s typically worth more than a dollar, so if you ask someone if they want one dollar, or one pound, they’d be better off taking the pound. No brexit jokes! Going more dramatic, you could try Thai Baht, which is roughly 30 to 1 US Dollar.

Earning 20 baht for doing something sounds more exciting than just one ole’ dollar, but it’s actually nowhere near as good. This is precisely the basis of how people mess up their points earning, assuming that loyalty points are of a similar value. They’re not.

More sounds better, but more is not always more.

Safe lock code on safety box bankHotel points, airline miles and even credit card points can be worth anywhere from half a cent per point to over two cents per point. That’s a 3x difference or more, so one travel rewards card offering 6x points earning on your spending and another offering 3x earning – the 3x option could actually be the better choice, depending what the points currency is.

It just doesn’t sound as cool, that’s all.

Hyatt and Hilton are a perfect tangible example.

By most calculations, World of Hyatt points are worth around 1.4/1.5 cents a piece, whereas Hilton Honors points are .4 or .5 cents a piece. Hyatt is basically 3x more valuable on a per point basis. That’s not to say one is better than the other, it’s just how they position their points.

On general spending, the Hilton Amex Surpass Card offers 3X Hilton Points, whereas the World Of Hyatt card only offers 1x Hyatt Points. On the face of it, many people think Hilton is the better deal, because hey – 3x! – but in this scenario they’re an even draw.

Avoiding Sticker Confusion

Things are the same for airline miles, where miles from one airline may not have any definable value, whereas others are worth lots.

The gap gets even wider on earning rates when you add in bank and credit card points programs, like Amex Points, Citi Points, Chase Points and Capital One, where points are more valuable than any one airline or hotel point.Yes – One American Express, Chase, or Citi rewards point is worth more than any point from any airline or hotel currency.

Too many people are suckered into airline or hotel rewards cards by the exciting sounding earning rate, only to later find out that they’re stuck with a hard to use points currency that isn’t nearly as valuable as they thought.

Both have value and purpose, but it’s important to approach with the right mentality.

When you earn a points currency like American Express Membership Rewards, Chase Ultimate Rewards, Citi Thank You or Capital One Venture Miles, the points are worth more than any one airline or hotel program because you have access to many airline and hotel programs.

These currencies are like branches on a tree, where your points are the trunk and the airlines you can transfer to branch out.

You can move your hard earned points to a variety of airlines or hotels with these points, whereas you can’t when you earn with a specific airline or hotel. This is precisely why they’re worth more, and also precisely why you should focus on earning them.

Actionable Information You Can Use

Lots of mumbo-jumbo, valuations and banging on – so what does it mean for you? The important takeaway here is to look at your own points earning via credit card spend and compare the cards you use in each category against their underlying points value.

The main “point” is that you may do better earning fewer points per dollar spent with a better type of points, than more points per dollar with an inferior points currency. Just like monetary currencies, they are not equal.

In current times of travel uncertainty, prioritizing points programs from banks is a safe hedge against an airline or hotel going bust, or devaluing their program, and since you’re not flying at the moment, it’s time to take a closer look at maximizing the value earned from your spending. Travel rewards are priceless, if you earn the right ones…

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