Free interactive tool
Devaluation Drag Calculator
The devaluation-drag calculator computes the yearly dollar cost of holding a points balance: the balance, times your own conservative value per point, times an annual devaluation rate you assume and label as an assumption. It then compounds that erosion into a year-by-year table, so you can see what an idle balance leaks over the horizon you are actually holding it — points earn nothing while they wait, and the issuing program can reprice them at any time.
The formula
annual drag ($) = balance × value per point ($) × assumed devaluation rate value after n years = balance × value per point ($) × (1 − rate)ⁿ
Programs do not publish a devaluation rate — the rate here is your labeled assumption, based on how often your program has repriced and how much discretion its terms reserve.
Run your numbers
From your account page.
How you actually redeem, not a best case — 1.3 is an example placeholder.
Your labeled assumption; programs don't publish one. 10 is an example, not a measured rate.
1–30. Whole years.
- Value today at your cpp
- $3,900.00
- First-year drag
- $390.00 / yr
- Value after 5 years
- $2,302.91
| Year | Value left | Cumulative loss |
|---|---|---|
| 1 | $3,510.00 | $390.00 |
| 2 | $3,159.00 | $741.00 |
| 3 | $2,843.10 | $1,056.90 |
| 4 | $2,558.79 | $1,341.21 |
| 5 | $2,302.91 | $1,597.09 |
The pre-filled numbers are a hypothetical example. The devaluation rate is your own assumption — write it down so future-you knows it was one. A named, funded target award can justify holding; an unnamed someday cannot.
Worked example (hypothetical numbers)
A 300,000-point balance valued conservatively at 1.3¢ per point with an assumed 10% annual devaluation (hypothetical numbers, not a valuation claim): annual drag = 300,000 × $0.013 × 0.10 = $390 per year, and after five years the $3,900 balance is worth about $2,303 — roughly 41% eroded — unless a named, funded award justified the wait.