On the Compare cards page, the Points Redemption Type setting decides how we turn a points card's points into dollars. It sits with the other card preferences in the side panel (on a phone, tap Spending & Preferences, then open Card Preferences). It only shows when Reward Type is Points or Both, because cash back cards are already in dollars.
The two choices
This is the setting you start on. Your points are counted at the highest value the card's program offers, typically a travel booking or another premium redemption. Those often (not always) give 1.5 to 2 times the value of cash.
The dollar figures are an upper estimate: they assume you redeem your points that way.
Your points are counted at the program's statement credit rate, the plain cash equivalent. You see what the points are worth if you simply take them off your bill.
We hide points cards that don't offer cash redemption, and a banner on the page says so. Cash back cards stay as they are.
How the dollar figure is worked out
The steps are the same for both settings. Only the value of one point changes.
Count the points
Each purchase earns whole points, rounded once per purchase.
Value them
Points multiplied by the value of one point, in dollars. A value of 2 cents per point means $0.02.
Take off the annual fee
The card's annual fee comes off the total. If you entered spending in a foreign currency, the card's foreign transaction fee comes off too.
The value of one point is its for that redemption.
Each program's page on the points calculator shows its estimates, for example American Express Membership Rewards.
Example card
2 points per $1 on groceries, 1 point per $1 on everything else
Groceries
$500 a month
$6,000 a year
Everything else
$2,000 a month
$24,000 a year
Annual fee
$120
Cash Value rate
the statement credit rate
1 cent per point
Best Redemption rate
the best travel redemption
2 cents per point
Points from groceries
$6,000 × 2
12,000
Points from everything else
$24,000 × 1
24,000
Total points
12,000 + 24,000
36,000
Value of the points
36,000 × $0.01
$360
Annual fee
-$120
Rewards for the year
$360 - $120
$240
Example numbers, not a real card. Each card's page shows its own rates and fee. Points are rounded to whole points on every purchase, so a real total can differ from this by a few points.
Compare cards both ways
Switch the Points Redemption Type setting and watch the dollar figures change.