If you are diving into the world of points and miles, the term CPP is everywhere. But what exactly does it mean?
CPP stands for Cents Per Point. It is a metric used to determine how much cash value you are getting out of every single point or mile you redeem. Since different points currencies have different values, CPP helps standardize comparisons.
Since cash prices are usually displayed in dollars and points are in the thousands, calculating CPP requires converting dollars to cents. $1 = 100 cents.
The simplest formula for calculating CPP is: CPP = (Cash Price in Cents) / (Points Required)
For example, a $200 hotel room that costs 10,000 points: CPP = 20,000 cents / 10,000 points = 2.0 CPP.
When booking award flights, you often still have to pay taxes and fees. To get an accurate CPP, you must subtract these out-of-pocket costs from the cash price.
CPP = ((Cash Price - Taxes & Fees) * 100) / Points Required
A common pitfall is using inflated or unrealistic cash list prices to calculate CPP. If a First Class flight lists for $15,000 in cash, but you would normally not purchase that ticket with cash, using that full price distorts the practical value saved. Calculate CPP based on the cash price you would have reasonably paid for the journey.
Skip the manual math! Use our CPP Calculator to instantly figure out the value of your next flight or hotel redemption, or check your total portfolio value with our Points to Dollars Calculator.