# so I did some math (re valuing points)



## neroden (Jun 24, 2021)

Figured I'd share it here.

I make the simplifying assumption that all your recreational spending is spent on Amtrak tickets whenever possible, so that money towards Amtrak tickets is equivalent to cash back.  If that is not true for you, this analysis will not be entirely accurate!

----
First: the points are worth about 2.816855 cents normally. 

This is what I found most recently for sleeper reservations, anyway. I use this as the baseline point value, because most of us cash our points in for sleepers.

Business class is usually a slightly better point value, so cashing in your points for business class is the best deal. But business class tickets are cheap enough I've just never managed to spend that many points on business class.

Coach is usually substantially worse point value, and Acela is always worse point value. So value the points based on using them for sleepers. The points are worth about 2.816855 cents if you don't have any discounts on your cash fares.

If you usually get the RPA discount, the disability discount, or another 10% discount, which doesn't apply to points, then the points are worth about 2.535175 cents.

This is all without the card. For Amtrak spending, *without* the card, joining AGR gives you 2 points per cash dollar spent on Amtrak, which is the equivalent of 5.663710% cash back for those without discounts or 5.070350% for those with discounts. (Higher for business class or Acela spending.) Since joining AGR is free, this means joining AGR is always a good idea. 

----
With Rail Passengers Association membership being $60/year, the 10% discount on Amtrak travel means it pays for itself if, without it, you were spending more than $600/year in cash (not points) on Amtrak and you don't have any other discounts. I generally have other discounts, since I am travelling with my disabled girlfriend, so I am a member solely because I want to advocate for better rail service. However, if you don't have any other discounts, it may make sense to join just for the discount. 

If you are spending nothing on Amtrak during the year because all your trips are paid for by points from using the credit card, however, then a discount on cash fares may be irrelevant. See below.

----
Now for the card. I am only looking at the fee card.

With the card, you get "5% points back" on redemptions, increasing the effective point value to 2.965111 for those without discounts, or 2.668605 for those with discounts (although you need a "points cushion" in order to do the redemptions). 

For me, this second number is the one to memorize: 2.668605 cents is the actual value of an Amtrak point to me.

The card with the fee gives you one point per dollar spent, which is therefore equivalent to 2.965111% cash back for those without discounts, or 2.668605% cash back for those with discounts. This is quite good! I don't know of any card with a higher "general spending" return rate, though I know of many with higher rates for particular types of spending.

For travel spending which is not Amtrak, double this: 5.930221% for those without discounts, 5.337211% for those with discounts.

For spending on Amtrak with the card, you end up getting 5 points per dollar spent on Amtrak, which comes out to 14.825555% back for those without discounts, or 13.343025% for those with discounts. Subtracting the baseline value for being in AGR, this is an improvement of 9.161845% for those without discounts or 8.272675% for those with discounts.

The annual fee is a reasonable $79/year. This fee, therefore, covers itself for a person with discounts if you put $2960.35 on the credit card in any way for anything during the year (which I do); after that you are getting the return rates listed above. This probably applies to most people, as most people have that much in ordinary expenses they are already paying which can be directed through a credit card (pay it off each month!!!).

If you do not have discounts, the breakeven point is lower: $2664.32. If you spend any money at all on travel or Amtrak (I didn't in 2020 because of the pandemic), the breakeven point comes significantly earlier: $862.27 spent on Amtrak would do it for someone without discounts, or $954.95 for someone with discounts. Conclusion: card is worth it.


----------



## neroden (Jun 24, 2021)

----
If you are aiming for tier status with minimal Amtrak travel, you put $20,000 on the card over the course of the year to get 4000 TQPs, and then spend $500 on Amtrak (included in that $20,000) to get 1000 more TQPs and reach Select.

If you have the 10% discount, that would be equivalent to $556 in base fares, and if you're getting most of your travel by spending points rather than cash, that can actually be a little tricky!

The business class bonus to TQPs helps; getting 2.5 TQPs per dollar spent on business class, you could spend only $400 on Amtrak to get to Select. (Equivalent to $445 in base fares.) This is probably the most efficient way to reach tier status if you live where you can do it; I can rarely find that much in business class trips.

With 3 TQPs per dollar spent on Acela First Class, you could spend $334 on Amtrak to get to Select that way (equivalent to $371 in base fares), but if you don't live on the NEC, it doesn't make sense, and even if it does, it might not make sense if you don't value the Acela First Class perks, which I don't.

Select Plus requires spending $2500 more in cash on Amtrak tickets than Select; or $2000 more if you're buying all business class tickets.

----
Now, suppose you have a lot of points and are trying to decide whether to spend cash on Amtrak in order to get tier status, versus spending points. (Remember, my assumption is that all recreational spending is on Amtrak!) Is it worth aiming for Select, or Select Plus status, deliberately?

If you really value access to the priority call handling phone number, this may be worth it. It definitely helps; the agents are more expert and less overloaded. $400 is pretty expensive for just getting that, but it may be worth it. I don't think it's that valuable, so let's assume not.

The other main perk of Tier status is lounge access. (I'll explain why the other perks are of little value later.) Select gives you two lounge access passes -- so think of yourself as paying $400-$500 for that, or $200-$250 per lounge pass. This is never worth it. Select Plus gives you unlimited access -- so think of yourself as paying $2400 - $3000 for that. This is occasionally worth it if you are frequenting the stations with lounges while travelling coach.

Lounge access in Chicago can be bought by coach passengers for $35/visit. If you're showing up in Chicago in coach 86 times per year, targeting Select Plus is cheaper; otherwise, it is not worth aiming for tier status just for that.

Most lounges are available to business class passengers. The business class upcharge is typically around $50, though sometimes more like $100. So, cheaper than targeting Select status. If you're taking coach to one of these lounges 60 times a year, or maybe as little as 30, targeting Select Plus is cheaper.

Philadelphia and Boston are open to business class passengers but only after paying an extra $35, again cheaper than targeting Select status. If you're taking business class anyway, targeting Select Plus is cheaper if you go there 86 times a year. If you would normally take coach class, then the upcharge is roughly $50 business + $35 lounge pass (still cheaper than targeting Select), so targeting Select Plus is cheaper if you go there about 36 times per year.

New York is open to business class passengers but only after paying an extra $50, again cheaper than targeting Select status. If you're taking business class anyway, targeting Select Plus is cheaper if you go there 60 times a year. If you're taking coach, targeting Select Plus is cheaper if you go there 30 times a year.

DC lounge is not open to business class passengers at all. Unless you go frequently, however, it may be cheaper to get access by simply buying Acela First Class tickets. Upcharge from coach to Acela First Class seems to be roughly $165-$200, which is still cheaper than targeting Select. If you go there 15-19 times per year, however, targeting Select Plus may be cheaper.

The most efficient way to get Select Plus is to buy Acela First Class tickets and the second-most efficient is to buy business class tickets, so the conclusion is: if you expect to go to the lounges many times per year (as noted above), buy those tickets in cash until you get tier status. Otherwise buy those same business class (or Acela, for DC) tickets in points and get access to the lounges anyway.

----
Suppose, however, you are not that interested in lounge access, perhaps because you're practically never in coach, and you don't need access to the priority phone number.

Then the main benefit of the tier status is the bonus to points -- but only after you've reached the status, so you may not have it at the start of the year. Select gives you a 25% bonus, which amounts to 0.5 points per dollar spent on Amtrak, which -- assuming you have the card -- is effectively 1.482556% back for those without discounts, or 1.334303% for those with discounts. Now, suppose, with discounts, you spent the absolute minimum, $334, to get to Select; you wouldn't recover this until you spent $25031.81 more, in cash, on Amtrak. Without discounts, suppose you spent the minimum, $371; you wouldn't recover this until you spent $25024.36 more, in cash, on Amtrak.

For Select Plus, it is even worse. You have to spend an additional $2500 on Amtrak travel, and you get essentially the same benefit again as for Select.
For Select Executive, you have to spend an additional $5000 on Amtrak travel, and you get twice the benefit, so it comes out about the same.

The other perks of tier status are of no value. The upgrade coupons are unusable as they only work on trains where business class isn't sold out, which it always is. The 10% discount coupons are entirely useless because everyone who's spending $600 on Amtrak travel per year already has a 10% discount. The companion coupons (available only with Select Plus and higher) are occasionally useful but of little value.

Conclusion: there is no point in aiming for tier status unless you are trying to get lounge access or priority call handling. (As noted, for lounge access it only makes sense if you take a whole lot of trips out of stations where you would not otherwise have lounge access.) Enjoy tier status if you stumble into it, but there's no point in actively spending money to reach it when you could spend points for your trips instead.

Conclusion: Usually spend points rather than cash, until you run out of points. Exceptions are:
* former blackout dates where points cannot be spent at their true value;
* situations where you may well need to cancel, where you may need a fully refundable ticket, since points tickets are never fully refundable. In this case your best option is always business class. This is because sleepers are not refundable; "flexible" often costs more than business but gives fewer AGR points; and Acela First Class is just spending extra money vs. business class;
* The aforementioned situation where you plan to leave in coach from one of the stations with lounges a *lot* and are targeting Select Plus.

----
When the points are for sale, they are usually sold around 2.8 or 2.9 cents; so buying the points is worth it -- barely -- for those without discounts but not for those with 10% discounts. Since anyone spending over $600 on Amtrak each year should be joining RPA and getting a discount, this means it is rarely worth buying points. 

Aaaaand that's it.


----------



## jebr (Jun 24, 2021)

Some great math here! A couple of notes to add to it:

The no-fee card has the same earning rate on general spend as the fee card. As such, you'd have to get that extra point-per-dollar value on travel/Amtrak spend (both earn an additional point per dollar over the no-fee card for that spend) in order for the $79 annual fee to be worth it, _unless_ you value either the TQPs or the additional 10% back for on-board purchases (20% with the fee card, 10% with the no-annual-fee card.)
If you're planning on traveling in sleeper or business class later on, it's probably not worth using points for a coach ticket unless you have a ton of them, or there's no discount available. Amtrak does quite a few sales for coach fares which drive the cash cost down 20-50% versus value fare, and you don't get that discount on points redemptions. It may also be worth using cash if there's a "free second person" roomette/bedroom sale and you have two people traveling in the sleeper compartment.
As always with points comparisons to cash, there's the underlying assumption that if you didn't have the points, you'd pay the cash fare for that. If that's not true, then the points should really be valued at what cash fare you'd be comfortable paying had points not been available to redeem.
As an example, as of the time of this post Amtrak is selling a one-way roomette for one from SEA to MSP on July 24 for $859, or 30,495 points. However, if I would only pay $500 for that roomette (i.e. if, at $501, I'd take an alternate mode of transportation or skip the trip entirely) then the 30,495 are only worth ~1.64 cents per point _to me_.

Finally, Amtrak can devalue points at any time with no notice, and there's no recourse available. It's likely that they'd give some heads-up about a major devaluation, but it's possible they wouldn't, or that they'd slowly devalue the points over time like Southwest does. In comparison, cash only devalues at the rate of inflation, and it's ultimately more flexible in terms of use.
The AGR card is currently a great value if you would normally be buying tickets on Amtrak with cash anyways, especially sleeper or business class fares, and you're fine with having the value of your credit card rewards given in Amtrak currency. I'm guessing that's the situation a lot of people on the forum are in. That said, for me personally I generally focus on cash back since I'll often travel coach on Amtrak, I'm fine with traveling on other modes of transportation, and I have a fairly strong preference for cash back over Amtrak points. Thus, while I'm currently using the AGR card as BoA sent a targeted promo for 2% back on top of the 1 AGR point per dollar spent, once that's over I plan to switch back to my cash-back setup and let my AGR card collect dust except for the one recurring charge each month (and for any on-board purchases) - my US Bank Cash+ card earns 5% back on ground transportation, including Amtrak, so I value that over the 2 points per dollar on the no-annual-fee card for Amtrak purchases.


----------



## Brian Battuello (Jun 24, 2021)

Excellent summaries, thanks!


----------



## neroden (Jun 25, 2021)

jebr said:


> Some great math here! A couple of notes to add to it:
> 
> The no-fee card has the same earning rate on general spend as the fee card. As such, you'd have to get that extra point-per-dollar value on travel/Amtrak spend (both earn an additional point per dollar over the no-fee card for that spend) in order for the $79 annual fee to be worth it, _unless_ you value either the TQPs or the additional 10% back for on-board purchases (20% with the fee card, 10% with the no-annual-fee card.)




Good point and, indeed, that is a correction to my math, so I'll work this out in more detail! The no-fee card may be preferable for many people; it's actually remarkably close, and probably depends on the value of lounge access and the number of Amtrak trips taken per year.

The advantages of the fee card:
* substantially more points for opening the account, and a lounge access pass for new account opening. This currently has value equivalent to about 3 years of the annual fee. Arguably cancelling the fee card and reopening it every two years is optimal if you can get away with it, but probably too much work!

* 1 more point per dollar on travel spending (Amtrak or non-Amtrak); for someone with a discount, this has value equal to the annual fee after about $2804.55 in travel spending (which I normally clear every year easily just through hotel stays, though not during the pandemic).

* I will note that if you have a card with a high cash-back rate on travel, like jebr, that might well be preferable; but I will also note that jebr's card has a dollar limit on how much travel spending qualifies for 5% cash back, one which I have shot right past during some quarters. (Actually, I shot past it twice even during the pandemic despite not travelling myself, because I paid for travel for some friends who really needed to travel for emergency reasons. I don't fly, but I was paying for other people's airline tickets and hotels.) 2 points per dollar on the Amtrak card (the rate for Amtrak spending on the non-fee card, or non-Amtrak travel spending on the fee card) amounts to 5.604070% (again, assuming you would be buying Amtrak tickets if you had cash), which is exceptionally good for a rate which doesn't have a cap on how many dollars it applies to.

* Tier status. Basically makes the difference between needing $500 of Amtrak travel vs. $2500 for Select status, and $3000 vs. $5000 for Select Plus status.

This is usually significant for me given how much Amtrak travel I do in a normal year, which is typically more than $500 in tickets and less than $5000.

In a lower-Amtrak-spending year, I wouldn't be Select otherwise, and it gets me Select pretty much every time, which gets 2 lounge passes, which I am usually able to use in NY, and $79 is slightly cheaper than two NY lounge passes. (Plus the priority call handling and the slightly higher AGR point-accruing rate for on cash tickets; so this is worth it for me.)

In a higher-Amtrak-spending year where I would be Select otherwise, it gets me Select Plus when I wouldn't otherwise, which again I am usually able to use to access the NY lounge a couple more times. (Plus the slightly higher AGR point-accruing rate.)

This hasn't been true during the pandemic because I'm not travelling, and it probably won't be in the post-coronavirus year as I try to burn off accumulated AGR points rather than spending cash, so arguably I would be better off with the no-fee card right now. Shuffling back and forth between those two cards is a bit too much work for me though.

Anyway, my conclusion is that the "fast track" to tier status is probably the biggest benefit of the fee card vs. the non-fee card. My previous conclusion was that the main advantage of tier status is lounge access. So $79 for the fast track to tier status is likely worth it if and only if you can use the lounge access. Which explains why it's been worth it to me, because I'm one train ride from NYC, where it's a lot nicer to be in the lounge than in the main waiting room (and I often have to take coach on that train because business class is sold out) -- and not for jebr, because he's in Minnesota.



> If you're planning on traveling in sleeper or business class later on, it's probably not worth using points for a coach ticket unless you have a ton of them, or there's no discount available. Amtrak does quite a few sales for coach fares which drive the cash cost down 20-50% versus value fare, and you don't get that discount on points redemptions.



This is another situation where the points don't redeem at their true value.

So, before booking I generally check the points price vs. the cash price -- before logging in and applying discounts -- and make sure that it's around 2.816855. If the points price is higher, for whatever reason (coach fare sales, blackout dates, whatever) I pay cash.



> Finally, Amtrak can devalue points at any time with no notice, and there's no recourse available. It's likely that they'd give some heads-up about a major devaluation, but it's possible they wouldn't, or that they'd slowly devalue the points over time like Southwest does. In comparison, cash only devalues at the rate of inflation, and it's ultimately more flexible in terms of use.



This is another strong reason to spend points as fast as possible.



> The AGR card is currently a great value if you would normally be buying tickets on Amtrak with cash anyways, especially sleeper or business class fares, and you're fine with having the value of your credit card rewards given in Amtrak currency. I'm guessing that's the situation a lot of people on the forum are in.



Yeah, I stated that assumption! I don't travel by air at all, I don't travel long-distance by bus, I don't travel long-distance by car, and I do like to travel. So my choices are Amtrak or stay home, mostly. Obviously, this year, it's been stay home! Normally, however, I will be buying enough Amtrak tickets to burn through all my points each year and still be spending cash afterwards on Amtrak. Which is why I treat the points as equivalent to cash, and my calculation was "Is it ever better to spend the cash first, and if so, when?"

If you don't think you're going to be spending all your money on Amtrak travel, the AGR card is terrible, because AGR points are essentially only valuable for Amtrak.



> That said, for me personally I generally focus on cash back since I'll often travel coach on Amtrak, I'm fine with traveling on other modes of transportation, and I have a fairly strong preference for cash back over Amtrak points. Thus, while I'm currently using the AGR card as BoA sent a targeted promo for 2% back on top of the 1 AGR point per dollar spent, once that's over I plan to switch back to my cash-back setup and let my AGR card collect dust except for the one recurring charge each month (and for any on-board purchases) - my US Bank Cash+ card earns 5% back on ground transportation, including Amtrak, so I value that over the 2 points per dollar on the no-annual-fee card for Amtrak purchases.



Makes sense. Your location also means that lounge access has relatively little value. Only once I started doing the math did I realize how large lounge access looms when making these calculations.


----------



## MARC Rider (Jun 27, 2021)

neroden said:


> ----
> The other perks of tier status are of no value. The upgrade coupons are unusable as they only work on trains where business class isn't sold out, which it always is. The 10% discount coupons are entirely useless because everyone who's spending $600 on Amtrak travel per year already has a 10% discount. The companion coupons (available only with Select Plus and higher) are occasionally useful but of little value.



Au contraire, for those of us NECsters who ride the Acela, the upgrade coupons have great value. Acela First Class is a real upgrade over Acela business class. I use at least 3 of my 4 coupons every year. In fact, just last week, I used one to upgrade my $116 Acela ticket to a First Class ride that was being offered for over $300. 
The 10% discount coupons are, indeed not worth it for me, because I get my 10% Senior discount. (OK, I don't get that discount on the Acela, and I haven't checked the conditions of the coupon.)
I've used the companion coupon once or twice, but, of course, the problem of that coupon is that it can't be combined with another offer, so one can't, say, apply the companion coupon and 2 1-class upgrade coupons to get a ride on Acela First Class for my wife and me for the price of one Acela business class ticket.


----------



## City of Miami (Jun 28, 2021)

Has Amtrak in fact devalued the points since the conversion to AGR2? It has been $.02896 give or take a few hundredths of a cent the whole time afaik. There's inflation of course but that applies across the board cash or points whenever you spend.


----------



## neroden (Jun 28, 2021)

MARC Rider said:


> Au contraire, for those of us NECsters who ride the Acela, the upgrade coupons have great value. Acela First Class is a real upgrade over Acela business class.


True, it's usable there, if you're already paying for Acela, which I generally don't see the point in doing. The problem is basically that on all the other trains, business class is routinely sold out. This makes it pretty useless if you live anywhere else (Empire Corridor business class is always sold out, Pacific Surfliner business class is always sold out, etc.), and since NE Regional business class sells out, it's even useless on the NEC if you aren't springing for Acela tickets to start with.

I think they didn't think this one through; they need more business class space on most all trains.


----------



## neroden (Jun 28, 2021)

So "Bob Dylan" pointed out to me that the companion coupons have had their restrictions relaxed and are more useful than they were before.

They're not very useful in coach because Saver fares are generally cheaper.

But you can use them to put a second person in a sleeper now. That's worth a significant amount on, for instance, Chicago to LA or Syracuse to Chicago -- around $84 for the latter on one random date.

You can also use them to put a second person in business class, and only pay the difference between the "Value" fare and the business class fare, which may save $50-$100.

This means that the companion coupon pays for the fee on the fee credit card all by itself if you are going to take one long trip with a companion in sleeper. 

So this increases the value of Select Plus status, by maybe ~$100-$200, if you have a companion. Add that to the value of the unlimited lounge access (which depends on how often you'd use it), and if you're *just short* of Select Plus status, it might make sense to pay cash to get the status instead of spending points. I'd say unless you're a very heavy lounge user, you'd still need to be less than $500 in spending short of Select Plus status to make it worth it to save your points and pay cash to get tier status. 

This would mean you'd need to know you were spending at least $2500 in cash on tickets even if you spent all your points. If you knew that was the situation, it might make sense to spend the extra cash to get Select Plus status before starting to burn your points. But still most of the time my conclusion is spend points first.


----------



## City of Miami (Sep 13, 2021)

Just now I saw an Amtrak tweet for the World card with 50K point bonus "worth up to $1250." That comes out to 2.5 cents per point. I wonder why they say that - instead of $1445?


----------



## MARC Rider (Sep 13, 2021)

neroden said:


> True, it's usable there, if you're already paying for Acela, which I generally don't see the point in doing.
> 
> ......
> 
> and since NE Regional business class sells out, it's even useless on the NEC if you aren't springing for Acela tickets to start with.



I think Acela is definitely worth paying for if you're going from Washington or Baltimore to Boston, as it does cut an hour of the trip time, as opposed to the Northeast Regional. 

I've had pretty good success buying Northeast Regional Business Class tickets even right before the train leaves, though, some trains, especially those with the 2-1 split seating, like 65-66-67 and the Vermonter (between Washington and New Haven) do sell out by train time. I've never tried redeeming 48 hours in advance, so I don't know how well that works.


----------



## bratkinson (Sep 13, 2021)

neroden said:


> ----
> If you are aiming for tier status with minimal Amtrak travel, you put $20,000 on the card over the course of the year to get 4000 TQPs, and then spend $500 on Amtrak (included in that $20,000) to get 1000 more TQPs and reach Select.



Due to my riding Amtrak only once this year prior to mid-July, my main goal was to get to 20K TQPs to retain my Select Exec AGR status. The benefits are extensive enough to make it worth while, in my opinion. So I plotted a quick path to SE based on bonuses, etc, and discovered Acela First Class was the best bang for the buck in terms of TQPs. Especially with it being double TQPs all year! 

What totally threw me for a curve is that all the previously non-TQP-earning 'bonus' points such as 25% for business class and 100% (base) for Select Exec has miraculously became TQP points as well...and DOUBLED to boot! So, for one leg, NHV-WAS, I paid $229 and got 2290 regular points and 2290 TQPs!!! My round trips from Windsor Locks to NHV in BC were $25 each way. Total TQPs for one $508 round trip? An incredulous 5028 TQPs! I made two more identical trips as of last Tuesday, and am taking a trip to NYP to 'cross the finish line' tomorrow. 

Here's the AGR posting of my latest trip for the 2 Acela portions ($229 each way, and 1 of the $25 BC legs)


----------



## me_little_me (Sep 13, 2021)

City of Miami said:


> Just now I saw an Amtrak tweet for the World card with 50K point bonus "worth up to $1250." That comes out to 2.5 cents per point. I wonder why they say that - instead of $1445?


Possibly they plan to devalue them?

You don't pay fewer points if you are senior, disabled, veteran or whatever. You pay full points and often you pay much more in points near holidays. In AGR 1.X, there were blackout days. Amtrak touted 2.X as having "no blackout days" but they didn't say they'd jack up the points requirement. A lot of "ethical challenges" on their part when they were pushing the "new improved" AGR 2.X.


----------



## zephyr17 (Sep 14, 2021)

Ethical challenges in a frequent traveler program? I'm shocked! Shocked!


----------



## neroden (Sep 22, 2021)

bratkinson said:


> What totally threw me for a curve is that all the previously non-TQP-earning 'bonus' points such as 25% for business class and 100% (base) for Select Exec has miraculously became TQP points as well...and DOUBLED to boot!


That changes all the TQP calculations!


----------

