The Value of Points (or Miles)

Recent campaigns from both Velocity and Qantas have been to get us to link our rewards cards and flyby to their programs and transfer our points to them, including from other loyalty programs like hotels, etc.

Getting flight rewards is often a challenge, and some are only standby and available IF you buy a less than economical fare that can be challenging in itself, but if you get lucky there is good value. Over recent times the value of points or miles has been $0.005 +/- a bit. The programs have sales and appear to be like any other on-line store, including selling for points + dollars.

The business case has to be huge for their amount of effort. A bank or hotel awards points but then essentially sells them to Velocity or Qantas programs, and then Velocity or Qantas eventually redeems them in one way or another. Most major international programs are in the same game.

It would be enlightening to understand the business arrangements “under the covers” that makes this such a good deal for the card issuers and Velocity and Qantas, and if it is any deal at all for consumers. I did some calculations and have my opinions, but.


We’d love to hear from other Community members about your experiences with rewards cards, especially trading flights.

I’m sure that the companies have done their numbers on this one @PhilT. Although no doubt there are points chasers who can make it work to their individual situation, there’s a reason why companies continue to run these programs.


As one that travels between Brisbane and Perth reasonably often, i use this as a basis for valuing points. You can pick up the return trip with Qantas for around $500 most times. To book it using points requires 36,000 points. Thus the value of a point is 500 / 36000 = $0.014. If you have to pay a card surcharge to earn points, then take the surcharge amount and divide by the number of points you’ll earn. If it is under $0.014 then you’re in front. Simple. If you don’t fly east coast to Perth, work out the points value based on a route that you do travel.


Just curious, are you able to book it with points when you need to?

Usually. Obviously for peak times (e.g. school hols) you have to get in early.

I have sought a “classic” business or premium economy long haul award going on a decade with nary an open pair of seats even looking a year ahead over a few months window of “opportunity”. Most people have to worry about holiday leave, and more recently if they will even have the same or any job that far out.

No classic awards, check the miles required for an anytime long haul. Most (many?) of us would not accrue that many in a lifetime. They are “priced” against full fare.

@BrendanMays said it well, “there’s a reason why companies continue to run these programs” and it is not to reward us, per se. But some can make it work…

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G’day @PhilT,
I get almost all my QTS FF points when using my ANZ QTS FF card. I’ve used these points to fly many many times Syd-Coff-Syd and a couple of times for at least a one-way overseas. I see these trips as something for nothing. But … I’m very happy to book as many months ahead as I need to.


Me too but not for much longer , it all comes crashing down when ANZ Kills the Amex card which was earning 1 for 1 and reduces the earning rate on the companion Visa card to 0.25 points per dollar

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@habari4u2 I share your sadness :cry:

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I must admit I am a bit of a points chaser, I get most of my points by signing up to new credit cards for bonus points deals, when they have no annual fee for the first year. It is a little bit of work signing up, using the cards for a bit and then canceling the cards. But I think it is worth it has saved me thousands of dollars on flights. It even alowed our family to go to a friends wedding we would not have been able to afford to otherwise. If you want to know a bit more about valuing points Kieth over at has a great artical.

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Glad to hear it has worked for you @heathpithouse. If you don’t mind me asking, have you ever noticed any negative effects from switching credit cards (applications refused etc). You can feel free to disregard this question if you’d rather not provide that info.

@dds - that gave me a good laugh, thanks for posting.

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In the US system, that we are slowly moving toward, cancelling a credit card is a negative regardless of the reason. The perverse reasoning is that one part of the rating formula is how much credit you use against how much you have available. A low ratio is better. If one cancels a credit card the amount of credit available is immediately less, the ratio higher, and the credit score thus goes down. Depending on where that score falls one could suddenly be knocked back for more credit for the sole reason a card got cancelled.


That’s a shocker @PhilT and I wouldn’t be surprised if our system worked in similarly devious ways (although I don’t have any hard proof to support that theory).

From my personal experience, I know the banks don’t make it easy to cancel cards or accounts either. I ended up sounding like an impatient child on a road trip. “Are we there yet? Is it cancelled yet? What about now?”.

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The hardest part is cancelling the cards, they always try to get you to stay with them. You just have to stick to your guns and tell them you want to cancel. Just tell them the truth and say you joined for the bonus points on offer and don’t want the card any more.
I have only been rejected once by Citi bank and I could not find out why. The funny thing is I applied to them again a year later and they gave me a ridiculous credit limit about half my gross annual salary. I would never be able to pay back if I used it all.


Very interesting, thanks for the insights :+1:

My latest inbox offer is to exchange increments of 2,000 flybuy points for 870 velocity points (+15% bonus velocity for the promotion), capped at 20,000 flybuys to make it enticing.

Tempting that may seem, 2,000 flybuys are worth $10 at Coles and related shops. The 1,000.5 velocity points (including the bonus points) get you $6.00 +/- in merchandise or petrol. Trading $10 for $6 seems such a deal. Of course if you are looking for a flight it might theoretically be worthwhile, but the nominal value for merchandise in the exchange, just wow!

If you buy groceries as a direct comparison 20,000 flybuys or 18,000 velocity will get you $100 at Coles. what a deal! just wow! but I repeat myself. :smiley: :smiley:

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Qantas also charges fees which make the value even worse than that, but for comparison (and because I can’t be bothered looking them up), I’ll ignore that. Note that Virgin doesn’t charge “fuel” surcharges anymore, so it is inherently better value than Qantas most of the time.

Anyhow, the trouble with any attempt to value points is that the most expensive routes per distance flown are seldom the busy ones with competition and the busy routes with competition are inherently the routes most of us fly most often! If that’s the only flying you ever want to do, you’re never going to get good value.
Melbourne-Perth. $225 vs 18000 pts. Value $0.012.
Melbourne-Exmouth (Learmonth): $438 or 18000 pts. Value $0.024.

Similarly, do you ever want to actually enjoy flying? Melbourne-Perth in business class is $2148 or 36000 pts. Value is almost $0.06 for that.

If you ever do any travel to regional Australia or ever want to travel in business or first, save your points for that and pay for the cheap economy flights between major capitals.