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Start with the cash alternative

Cash has a stable face value and requires almost no extra effort. That makes it the correct baseline—not a consolation prize.

Use your redemption value

Divide the cash price you would actually pay, minus award taxes and fees, by the points required. Do not use a luxury ticket's theoretical retail price if you would never buy it.

Count the effort

Award searches, transfer delays, change rules, and limited dates have costs. If the points advantage is slight, choose the simpler option.

Never carry interest for rewards

Interest charges can erase rewards quickly. If a rewards strategy makes it harder to pay the statement balance or encourages unplanned spending, it is not a good strategy.

Sources

American Express: Membership Rewards terms