Before we dive back into the time value of points, there are a few relevant and leading news items to discuss:

Not only does maximizing the value of your points require burning early and often, but it also necessitates hitting smaller products with outsized value harder than products with average value.

Revisiting the Time Value of Points

With those notes in mind, we can derive an equation for the time value of points. If it doesn’t render correctly in your email client, see the website here. (And yes, I’m sorry to put you all through this, but sometimes I can’t won’t help myself):

FV = PV \times (1 + r - (q \times d) + i)^n \times (1 - p)


FV = future value
PV = present value
r = any promotional increase of value in a given period
q = the probability of a devaluation in a given period
d = the rate of devaluation in a program in a period
i = interest on points earned in a period (there is a program that does this)
n = the period (time)
p = the probability a program shutting down and wiping out all value

(Thanks to Jon for noting that the original version of this post lacked a definition for i)

The Point?

Is this formula useful? Sort of. It’d be more useful if someone would write a quick calculator web site. Do I actually expect anyone to use this formula? No, not really for anything other than mental gymnastics.

Points and miles still devalue, and sometimes they devalue a lot. Don’t forget that the second part of this site is titled “And Burn”.

Pictured, left to right: MEAB with glasses; The entire churning community after this post.