Travel points without credit card debt: the interest math that decides it

The number that decides whether points pay

A 75,000-point welcome bonus is worth $750 at Chase's own portal rate of a cent a point. ^{4, 3} Carry a $1,000 balance at the average credit card APR and you hand back the same $750 in interest over about 40.6 months. The bonus arrives once. The interest arrives every statement.

That trade gets settled before any of the interesting parts: the transfer partner, the award chart, the seat at the front of the plane. On 28 September 2026 the Federal Reserve put the average APR on card accounts actually charged interest at 22.15%. ¹ A point, by the issuers' own published rates, is worth about a cent. ^{3, 8, 9} The gap between those two numbers is the whole page.

So the order of operations matters more than the card: clear what is owed before chasing a rate, then let a points strategy start from a balance of zero.

What does carrying a balance actually cost?

The Federal Reserve publishes both halves of the answer: the rate, and the balance a typical cardholder carries.

One line in the Fed's G.19 release settles the argument. In the second quarter of 2026 the average stated APR across all credit card accounts at commercial banks was 20.94%. On the accounts that were actually charged interest, the average was 22.15%. ¹ The second figure is the one that belongs beside a real carried balance, because it comes from accounts where interest was really charged.

The balances behind that rate are large. In the Fed's 2025 household survey, cardholders whose answers were matched to credit-bureau records held an average balance of $7,279, up $748 on the same people's balances two years earlier. ² Nationally, card balances reached $1.263 trillion in the second quarter of 2026, and revolving consumer credit reached $1,357.2 billion in July. ^{10, 1}

45% of card owners told the Fed they carried a balance at least once in the previous 12 months, down 12 percentage points over the decade. ² Close to one in two, then, spent part of the year paying the rate above.

The climb was steepest for the people with the least room. Balances among cardholders who describe themselves as finding it difficult to get by went from $6,735 to $9,265, a rise of $2,530. For those living comfortably, the same two years moved the average $59. ²

What is a travel point actually worth?

About a cent, on the redemption most people reach for. Chase states that points earned on its cards are worth $0.01 each through Chase Travel, and that a Points Boost promotion can lift 100 points to $1.50 on Sapphire Preferred or $2.00 on Sapphire Reserve. ³ The base rate is the one to plan with, because the boost applies per booking.

American Express publishes a table by redemption method: 0.7 to 1 cent for Pay with Points at checkout, up to 1 cent for gift cards, 0.6 cents for covering statement charges, and up to 1 cent for flights booked through Amex Travel. ⁸

Capital One works its own example on the Venture page: $2,200 of monthly spend earns 52,800 miles a year, which the page calls a $528 value. Divide one by the other and the rate is exactly 1 cent a mile. ⁹

Transfers to an airline or hotel partner can beat a cent, and they can also land below it. Each issuer publishes the transfer ratio and leaves the value to the receiving program's award chart, which moves by route and season, so this page plans with the published portal rates. For a specific flight or hotel night, MMT's points versus cash calculator turns one redemption into a cents-per-point number, and the airline loyalty guide covers the programs those points land in.

Credit card interest vs rewards, on one balance

A worksheet on two published figures: the Fed's average rate and the Fed's average balance.

A year on the average balance costs $1,612.30 in interest and earns $72.79 in points. The inputs are the Fed's 22.15% average APR, the Fed's $7,279 average 2025 balance, and Chase's own cent a point at 1 point per dollar of ordinary spending. ^{1, 2, 3, 4} The interest comes to 22.15 times the point value.

How long can a purchase sit before the interest wins?

Sixteen days, at 1 point per dollar. A 22.15% APR works out to about 0.0607% a day, so a purchase carried past about 16 days has cost more in interest than the 1% its points paid. ^{1, 5} At 2 points per dollar the purchase gets 33 days. At the 5x rate on travel booked through the issuer's portal, 82 days. ⁴

The mechanic behind those days is published. Issuers that charge a daily periodic rate divide the APR by 360 or 365, multiply it by the amount owed at the end of each day, and add the result to the next day's balance, so interest compounds daily. ⁵

Many issuers apply that rate to the average daily balance across the whole cycle. That is why a payment made mid-cycle lowers the charge on the cycle you are in, instead of waiting for the next one. ¹¹

Are points worth it with a balance on the card?

A welcome bonus is a one-time payment. Interest is a subscription. Chase Sapphire Preferred's current offer is 75,000 points after $5,000 of purchases in the first three months, which is $750 at the portal rate. ^{4, 3} A $1,000 balance at 22.15% costs $18.46 a month, so about 40.6 months of that interest matches the bonus. Sapphire Reserve's 100,000 points reach $1,000 and buy about 54 months. ^{3, 1}

The spend requirement carries its own bill. Putting $5,000 through the card and carrying it for the three-month window costs about $276.88 in interest at the average rate, which takes a $750 bonus down to roughly $473 before the first award search. ^{1, 4}

• Pay the statement in full and the rewards are yours. A grace period runs from the end of a billing cycle to the payment due date, and clearing the full balance by that date keeps that period's purchases free of interest on most cards. ⁶
• Issuers must mail or deliver the bill at least 21 days before the payment is due, so the grace period holds even when a payment lands late in the window. ⁶
• Any payment above the minimum goes to the highest-APR balance first, by law, which matters on a card carrying a promotional transfer rate alongside new purchases. ¹¹
• Every statement shows how long minimum payments alone would take to clear the balance, and the monthly payment that clears it in 36 months. Read that box before reading a welcome offer. ¹²

Put the rewards back in the plan, in this order

The rate comes first, the card second. Four steps, each one a thing to do this week, and none of them requires giving up the trip the points are for.

1. 01

   Read your own APR and balance off the statement

   A card's interest rate is stated as a yearly rate, the APR, and yours sits on the statement beside the balance it applies to. ⁷ Those two numbers replace the averages on this page.

2. 02

   Clear one full statement balance

   Paying the whole statement balance by the due date restores the grace period on purchases on most cards, which takes the 22.15% out of the arithmetic. ^{6, 1}

3. 03

   Send anything extra to the highest rate

   Payments above the minimum go to the highest-APR balance first, and a payment made mid-cycle lowers the average daily balance that the rate is applied to. ^{11, 5}

4. 04

   Then go shopping for points

   With the balance at zero each month, a 1x card pays 1% and a 5x travel portal pays 5%, with all of it kept. Start at MMT's credit card points hub for the fees and transfer partners, and check what a foreign transaction fee does to the same spending abroad. ^{4, 3}

A cardholder who pays in full earns the same 75,000 points as everyone else, on the same welcome offer, and keeps all $750 of it. ^{4, 3} That is the version of this game worth playing, and the rate on your statement is the scoreboard.