# How do I calculate what percentages I'm getting back on my credit card on which I get points, not dollars?

So, I have a Scene Visa card (Canadian) which instead of giving me money, gives me points for which I can use for a variety of things, but the most common being movies. How do I figure out what percentage I'm getting back based on the cost of the movie?

So, if I spend \$1000 I get 1000 points. It takes 1000 points for a movie ticket and the most expensive movie is \$17.75 per ticket. How do I figure out what percentage of my \$1000 is converting into cash for a movie ticket?

-- Edit / Response:

This question is more just so I'm making sure I'm calculating it right. Not so much of a comparison. Having said that, here's my responses.

Regarding there being a variety of options you can get with the points. This is partially true, although the other options obviously don't give the same return. For example, a \$25 movie for 3000 (or more) points. But one thing I was remembering is that they have a package deal: 2 movies (\$17.75 x 2 = \$35.50) plus 2 drinks and a popcorn (probably about \$16) for 2500 points. Total cost \$51.50 / 2500 = 2.06%, so a bit better.

The in response to other cards: the problem I have with the cash back cards, at least for the ones available in Canada (and the ones I've found) is that they have a minimum (usually \$1000) and a maximum (around \$10 000) for when reweards start. For someone like me who puts over \$30k a year on the card, \$10k no longer makes sense even if the return is slightly higher. Another problem the cash back card I have is that it doesn't have a fixed return. Last thing I read it was between 1% and 1.75%. In my case, any time it drops below 1.5%, it's no longer worth it.

But in the end, for the Scene Visa card, because the best thing you can get out of it is movie tickets or movie package deals, it's not worth it if you don't go to the movies.

• Realize that this type of obfuscation of such loyalty points is intentional, and that, if possible, you'll simplify your life by going with a cash based rewards card in my opinion. – CrimsonX Feb 11 '11 at 13:06
• I definitely agree that cash back cards can be obscure, especially with tiered cards or cards with annual fees and min/max amounts. There are dozens of threads at RFD with literally 100s of posts discussing the merits of different credit cards. The consensus seems to be that the best cash back card is the MBNA Smart Cash. Scene card is definitely not bad if you watch a lot of movies, but for me, there really haven't been that many great movies lately. – fideli Feb 11 '11 at 20:48
• The beauty is they don't have to great when they're "free" :) – Darryl Hein Feb 12 '11 at 1:28

The calculation is to figure out how many dollars you get in return for the amount of dollars you spend. In your case, you know you get 1000 points for \$1000 dollars, and can redeem one movie ticket for 1000 points. Therefore,

`````` \$17.75 redeemed     1000 points
----------------- x ------------ = 0.01775 = 1.775 %
1000 points       \$1000 spent
``````

Granted that you could also redeem a \$8-9 ticket, making your return 0.8-0.9%.

In addition, this can get more complicated for some points cards that may give out free points, and is especially so if there's an intermediary such as AIR MILES, for which points can be earned in numerous ways. To get really nitty gritty, you could to keep a spreadsheet where you list number of dollars spent, number of points gained, number of points redeemed, and value of reward received. Thus, you can figure out exactly what your cost is for each point (second factor from above), as well as the ultimate value of each point with respect to rewards redeemed (first factor). I'm considering doing that myself since I'm prone to spreadsheet addiction, but this method is likely overkill for most points cards.

Usually points have different value depending on what you use it for and how much of them you convert. For many providers, if you have enough (10000+ usually) points, it is possible to convert them 1:1 (which means 1 point converted to 1 cent) to either cash or something that is almost as good as cash (\$100 gift card for some popular store or \$100 Amazon.com certificate, etc.). Some cards have more exotic ways of getting best value - such as transferring money to pay student loans, retirement accounts, etc.

So to get the best value, I'd recommend to make a list of what you can get from your program (most types of reward are uniform - i.e., many gift cards with the same price, so the work may be less than it seems) and calculate point values of each of those. If you want to be really precise take into account that if you buy something with points, you do not earn points on that, which reduces the value a little.

In general, these days it is very rare to get a card that produces more than 1% back, though some have up to 5% for certain categories of purchases.