Credit card reward points aren't free money: Here's how to calculate their real value

Credit card reward points are not free money; their real value depends on earning and redemption methods.

A card's annual fee may outweigh the value of points earned, affecting overall benefit.

Redemption options vary: points may be worth more for travel transfers than for gift cards or cash back.

Spending extra to earn bonus points can reduce the net value if the purchase costs more than the points' worth.