Getting Started Birch

How Birch calculates reward values

Alex Cohen Alex Cohen  | 

Credit card rewards are tricky. Apart from the face earning value of cards, like 2x points on groceries or 3x points on gas, there's an entirely different side of rewards that gets easily overlooked - the value those points or miles are worth when you go to redeem them. The only time these rewards are straightforward (usually) is when you're earning cash back only. It's easier to understand 2% cash back on a $100 purchase = $2.00, compared with 2x points on a $100 purchase = 200 points which randomly comes out to $1.15 upon redemption.

To make things even more complicated, the value of rewards changes based on what you're actually redeeming them for. Here's an easy example - American Express Membership Rewards. Membership rewards is nice because it's flexible, allowing you to redeem your rewards for anything from gift cards to flights to Hawaii. But that flexility comes at a cost and can sometimes end up costing you hundreds of dollars. That's because if you were to redeem 100,000 MR points for gift cards, you would net $500 versus redeeming those same points for travel would net you $1000 or higher.

With some of the more complex programs, such as the branded airlines like Jetblue, American Airlines and Delta, those points have a wide range of values even within one redemption category - like flights. That means you could get more value by flying SFO -> JFK versus SFO -> LGA.

Here's what we do at Birch

We've worked hard to make rewards simple. We don't believe in spending hours putting together excel spreadsheets and trying to keep up to date with changing bonuses.

When you sign up, you choose your reward preferences:

These preferences get built into every calculation we do and recommendation we make. We create a personalized average reward value based on the rewards that mean the the most to you. This way, we strip away all of the complexity behind changing rewards values and understanding what it means to earn different reward rates and then redeem for different values. We also track hundreds of category bonuses and thousands of merchant bonuses, so you don't have to.

We're all about transparency in a space that has traditionally been muddled by increasingly complex programs. We've made it simple to check how we're calculating values. Every transaction has a dropdown that shows how we calculated the values you earned and the value for what you missed.

Any questions? Just shoot the team a message. There's a big green chat button on every page and we're standing by to help.

Alex Cohen

Alex Cohen

I run Birch by day and watch cat videos by night

San Francisco, CA