Travel
Cash or Points? Compare an Award Flight to the Cash Fare
By Ryan Davidovich, founder of BudgetR
Published · Updated
Short answer
To compare an award flight with a cash fare, subtract the taxes and fees you pay on the award from the cash fare, then divide by the points required. The result is cents per point, and you compare it with what your points are worth to you. If the award returns more per point than your own valuation, using points is the better deal; if not, paying cash and keeping the points usually is.
The cents-per-point formula
Cents per point equals the cash fare minus the award's taxes and fees, divided by the points required, times 100. You subtract the taxes and fees because you pay them in cash on the award ticket too, so only the remainder is what the points buy. Use the same flights, dates and cabin for both prices; an economy fare compared with a business-class award tells you nothing.
Count every cash cost on the award side: government taxes, carrier surcharges, booking or change fees, and any fee to transfer bank points into an airline program. Then consider what the cash ticket gives you that an award may not, such as points or status credit earned on the fare.
What are your points worth to you?
A point has no fixed price. Its value is the best realistic use you have for it, which might be the cash back you could take instead or a redemption you would genuinely book. Choose a number in cents per point that you would be happy to get, and treat redemptions above it as good and below it as poor.
That is the idea behind opportunity cost. Spending 40,000 points on this flight means they are not available for another trip, so the flight has to beat your alternative use, not just beat zero. Compare the prices near the time you book too, because cash fares change daily and award seats can be limited.
Setting your own valuation
Three practical ways to arrive at a number for your points:
- The cash alternative: if the same points could be redeemed as cash back or statement credit, that rate is your floor.
- The redemption you would actually book: use the cents per point from a trip you genuinely plan to take, not a rare best case.
- Your recent trips: work out cents per point on the last few flights you considered and take a typical figure.
Taxes and fees matter most on cheap fares. Example: a $150 fare against 15,000 points plus $90 in fees leaves only $60 for the points to replace, or 0.4 cents per point. Any personal valuation above 0.4 cents makes cash the better choice there.
Example: one flight, two award prices
Example: a round trip costs $486 in cash. An award for the same flights and cabin costs either 30,000 points (Award A) or 45,000 points (Award B), each plus $89 in taxes and fees. Suppose you value your points at 1.25 cents each.
| Award A: 30,000 points | Award B: 45,000 points | |
|---|---|---|
| Cash fare | $486.00 | $486.00 |
| Taxes and fees on the award | $89.00 | $89.00 |
| Fare the points replace | $397.00 | $397.00 |
| Cents per point | 1.32 | 0.88 |
| Your points at 1.25 cents | $375.00 | $562.50 |
| Award cost: points value plus fees | $464.00 | $651.50 |
| Result | Award is $22.00 ahead | Cash is $165.50 ahead |
Award A returns 1.32 cents per point, above the 1.25 cents you put on your points, so it wins narrowly. Award B returns 0.88 cents and loses clearly. The break-even is the cents-per-point figure itself: if your valuation is below 1.32 cents, Award A wins. At 1.5 cents, Award A would cost $450 in points value plus $89 in fees, or $539, and paying $486 in cash would come out ahead.
Other factors that change the answer
- Seat availability: an award price only counts if seats are available for your whole party.
- Flexibility: compare change and cancellation terms for both tickets.
- Earning: cash tickets can earn points or status credit; awards may not.
- Transfers: if you would move bank points into an airline program, include any transfer fee and note that a transfer bonus changes how many source points you spend.
- Timing: fares and award prices both change, so recheck before you book.
How to do this in BudgetR
- In Travel, search your route and track the itinerary. BudgetR checks the fare daily and keeps the price history, so you can see how the cash fare is moving.
- In Points, add your loyalty accounts and balances and set a personal value in cents per point for each program. BudgetR pre-fills a default that you can change.
- Record an award quote for the tracked itinerary: the program, points required, taxes and fees, cabin, seats available and when you saw the price.
- Read the comparison. BudgetR combines taxes and fees, any transfer fee and your point values into an economic cost, shows the net value against the tracked cash fare, and labels the result use points or pay cash.
- Check the flags. The comparison is withheld or flagged when the quote is stale, seats are unverified or insufficient, your balance is short, or the currencies differ. BudgetR does not book travel; you book with the airline or program.
Key takeaways
- Cents per point = (cash fare − award taxes and fees) ÷ points × 100.
- Compare like with like: same flights, dates, cabin and traveler count.
- Your own valuation of a point is the yardstick; opportunity cost is why it matters.
- The break-even valuation equals the award's cents per point.
- Availability, flexibility, earning and transfer fees can outweigh a small difference.