# How to calculate whether a credit card surcharge is worth paying?

Hi, I’m looking to calculate if paying certain credit card fees are worth it for the points you receive. I understand depending on the flight you ultimately book that the calculation will fluctuate.

However for the Qantas FF program to book reward seats, what is the general calculation one should make.

E.g. Transaction = \$1,000, fee is 0.8%, earn is 0.75 points/\$1 spent…is it worth it?

Pay up to 1 cent per Qantas point. That’s what its worth. Even Qantas says so given that is their conversion rate on Classic Plus rewards.

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Transaction = \$1,000, fee is 0.8%, earn is 0.75 points/\$1 spent…is it worth it?

Transaction: \$1000
Fee: 0.8% or \$8
Earned points: 750 Qantas pts

Cents per point(cpp): 800 cents / 750 pts = 1.07cpp

Using @kris.mas.x2 valuation, you are just over 1cpp so it is borderline acceptable/unacceptable so it will depend on your use case (e.g. convenience, whether you have cash in hand).

The calculation for earn cpp for a flight is:

Use the cost you were willing to pay for for that flight with cash (anyway). E.g. flight costs \$1000 but you are willing to pay \$800 only, use \$800.

If flights costs 70000 pts and flight taxes cost \$100 the calculation is

(\$800 - \$100) X 100 / 70000 = 1cpp ( very low).

You generally want your use cpp to be higher than your earn cpp. A minimum of 1.5-2x. however, everyone’s circumstances are different. There is no right or wrong.

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Welcome @JCruise,
I’m going to go out on a bit of a limb here… I’m not sure if this is just me or not. While I do monitor the cpp to an extent, I generally don’t [over] think too much about it. If you’re claiming 1st/Business class reward seats, you’re usually so far ahead on the spend/reward ratio that a few cents extra here and there on your points earning is negligible.

Think of it like the people who drive 50kms to find fuel that’s 3-5c per litre cheaper when they fill up, only to buy an extra cup of coffee from their favourite cafe, or grab a few more beers on the way home because they were on special. We tend not to think twice about the extra spend when it’s a want or pleasure cost - chips/chockies/ice cream. But we start to nickel and dime our thought process on points hacking. (I’m generalising here for sure).

It’s like taxes… if you’re paying more, you’re probably earning more \$'s. Same with points… if you’re earning more and flying at the pointy end of the plane, you’re probably doing something right… Sure, keep an eye on things, but also make sure you’re not taking the joy out of the process.

Happy Hacking!!!
See you “up front!”

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Thank you! Appreciate your thoughts on this