Two cards can both advertise the same number of points per dollar and deliver very different value, because a point is not a currency with a published exchange rate. Its worth depends entirely on the route by which it is redeemed.
Points are a liability the issuer must fund
When points are awarded, the issuer records a liability. Every point outstanding is a promise to hand over something later.
That promise is funded from interchange revenue, annual fees and interest. The programme is designed so the average redemption costs less than the revenue the spending generated.
Because the funding is finite, issuers steer redemptions towards the cheapest options for them and price the expensive ones accordingly.
Statement credits set the floor
Redeeming points against the balance is the simplest route and usually the least rewarding. The issuer is buying the points back with cash, which is the most expensive way for it to settle.
Cash redemptions are therefore held at a low fixed rate, and that rate becomes the floor beneath every other option.
It is still a useful benchmark. Any other redemption is worth taking only if it beats what the same points would fetch as a straight credit.
Travel portals sit in the middle
Booking through the issuer's own travel portal typically returns more per point than cash. The issuer buys the ticket at a negotiated rate and the margin between that rate and the retail fare funds the uplift.
The catch is that portal inventory is priced in cash first and converted to points at a fixed ratio, so a fare that is expensive in dollars is expensive in points too.
The value is real but capped. It cannot exceed what the trip would have cost in the open market.
Transfers break the fixed ratio
Transferring points into an airline or hotel programme changes the arithmetic, because the receiving programme prices its own inventory in its own currency.
An award seat priced well below its cash fare produces an outsized return, while the same transfer against a cheap fare destroys value. The variance is the point of the mechanism.
Transfers are also irreversible, so the value depends on finding the redemption before moving the balance rather than after.
Devaluation is a structural risk
Because programmes set their own award prices, they can raise them without notice. Points held do not lose their count, only their purchasing power.
This has happened across the industry repeatedly, and it is the reason large balances are riskier than they appear on a statement.
A balance is best understood as a currency with an issuer who controls both supply and prices, which argues for earning towards a specific use rather than hoarding.