How Credit Card Miles Work - And Which Are The Best Cards
How do credit card miles work? Are they better than cash back? How to figure out how much your credit card miles are actually worth.

Today Americans fly year-round, especially with so many airline specials last-minute fares. With all the holidays behind us and with the start of 2020, indeed many of us are already thinking about and/or planning our next trip in the coming year.

For sure, collecting frequent flyer miles is still a profitable pastime for road warriors and occasional travelers alike—take a flight, earn airline miles and eventually collect enough to redeem for a free ticket.

But pro travel hackers know the best way to earn miles is on the ground, not in the air, by taking advantage of credit cards that award miles upon sign-up and again with every purchase.

What are credit card miles?

Credit card miles—the same thing as points—are the currency of loyalty programs attached to certain travel rewards credit cards.

With these rewards credit cards, you earn miles or points that you can later redeem for airfare, hotel stays, or other travel expenses. Under most programs, you’ll earn miles or points for every dollar you spend as well as bonus miles or points for spending in certain categories or spending a minimum amount of money within a certain period of time after opening a new account.

Credit card miles are different than airline-specific frequently flyer miles. Both, however, can be redeemed for free travel.

Credit card miles vs. frequent flyer miles

Airline-branded credit cards will award frequent flyer miles that are only good for travel on that airline. For example, Delta SkyMiles American Express cards earn SkyMiles that can be redeemed for flights on Delta or partner airlines. There are other ways to redeem SkyMiles, but you’re limited to companies Delta has partnered with.

Generic credit card miles can be redeemed with any airline, hotel chain or another travel provider.

In general, credit card miles give you a lot more flexibility when you go to redeem them but tend to have a fixed value-per-mile. With frequent-flyer miles you are subject to restrictions like individual airlines and black-out dates but you may be able to redeem the same number of miles for a more valuable reward, like an international business class ticket.

Credit card miles vs. cash back

With travel credit cards, you’re limited to redeeming points or miles on travel-related purchases, while other cards give you cash back that you can apply to any purchase on your statement, or even transfer to your bank account.

Why choose credit card miles over cash back?

Cash back credit cards are simple and straightforward—earn cash and use it for anything. But miles credit cards can give you more for your money if you know how to use them.

How much is a credit card mile worth?

On average, one credit card mile is worth approximately one cent.

A penny per mile—that’s the benchmark. So, with most programs, if you have 10,000 miles, you have $100 in rewards.

It doesn’t matter if you’re earning miles, points or cash back, if you earn 1% on every purchase, you would need to spend $1,000 to earn $10 in rewards.

Some inferior point-based rewards credit cards make you spend more points to get cash or a cash equivalent rewards (for example, a Visa gift card) than to get branded gift cards or merchandise, lessening the points’ value. No thanks.

What you want to look for are opportunities to redeem miles for more than a one cent each. If you can redeem your miles at a rate of two cents-per-mile, that’s good. If you can redeem them at a rate of three cents or more per mile, you’re entering serious travel hacking category.

This is one of the reasons the Chase Sapphire Preferred® Card has been so popular among miles-cards enthusiasts. It offers a 25% redemption bonus if you redeem points for travel through Chase Ultimate rewards, upping the value-per-mile to 1.25 cents (60,000 points becomes worth $750 instead of $600). But the Chase Sapphire Preferred® Card also lets you transfer points to certain frequent flyer and hotel programs 1:1. And that opens up a realm of possibilities.

Learn more about the Chase Sapphire Preferred® Card here.

How much is a frequent flyer mile worth?

While credit card miles are usually worth about a penny-per-mile, the value of frequent flyer miles is all over the map—it all depends on how you redeem them.

The value of frequent flyer miles is a mixed bag. Can you snag an award ticket for 25,000 miles that’s worth $300 or more? Perhaps, although it’s not easy. If, however, you use miles to travel internationally—or, in first class seats—credit card miles can actually be worth $0.05 or more apiece.

Frequent flyer miles are worth more per mile when redeemed for long-haul flights and business or first class seats.

Hypothetical airline mile redemption values

RedemptionCash valueMiles requiredValue-per-mile
Cash rewards300300001 cent
Domestic coach300400000.75 cents
Domestic first class1000800001.5 cents
Trans-Atlantic coach1500950001.6 cents
Trans-Atlantic business30002000001.5 cents
U.S.-Asia coach20001300001.5 cents
U.S.-Asia business20001300003 cents

If you simply redeem frequent flyer miles for a domestic ticket that normally would only cost a couple hundred bucks, the results are terrible — you get less than a penny per mile! Worse that if you just earned 1% cash back.

But look what happens when you cash in miles for a more expensive ticket. The value per mile goes up to a penny and a half or even three cents if you save them up for a trip across the Pacific in business class. (Depending on the route and schedule, these seats can sell for $10K or more).

When do airline credit cards make sense?

Despite the higher potential value-per-mile, unless you frequently and religiously fly one particular airline, credit card miles that can be used on any airline may be more valuable than airline-specific frequent flyer miles.

Airline-branded credit cards will award that airlines’ frequent flyer miles (for example, Delta SkyMiles American Express cards earn SkyMiles) whereas other travel rewards credit cards will award credit card miles that can be redeemed for flights on any airline, hotel stays and more.

If you fly frequently enough on one particular airline, then carrying that airline’s branded credit card may make sense. Most of the benefits of an airline credit card come not from the miles you earn, but from additional perks like:

  • Free checked bags
  • Priority boarding
  • Reaching elite status faster

For example, I fly Delta just enough that carrying a Delta SkyMiles Amex gets me into their Gold Medallion level. That perk gets me priority customer service and—every now and then—a free first class upgrade.

The best airline miles rewards credit cards

Unless you’re a frequent traveler chasing elite status, a travel rewards credit card that gives you miles good on any airline is probably your best bet.

There are several advantages to earning airline credit card miles:

  • Airline Miles can be redeemed as a statement credit toward any travel purchase (tickets on any airline, hotels, rental cards, cruises, etc.
  • There are no blackout dates or other restrictions.
  • Unlike many frequent flyer miles programs, you don’t need to accumulate the miles needed for an entire flight—you can redeem in increments as low as $50 to defray your travel purchases.
  • Most credit card miles do not expire as long as your account is open and in good standing. (Some frequent flyer miles will expire if you don’t take a flight on that airline every year.)

The good news is you have several great options—most of which offer generous sign-up bonuses worth up to $625 if you can spend a certain amount within a few months of signing up.

Capital One Venture Rewards Credit Card

In A Nutshell

Capital One’s leading product is the Capital One Venture Rewards Credit Card and it shows. A one-time 100,000 mile bonus after spending $20,000 in the first 12 months is flat out AWESOME, and 2X miles per dollar spent is about as good as it gets with a travel rewards credit card.

Read review
Apply Now On the Secure Website

In A Nutshell

Capital One’s leading product is the Capital One Venture Rewards Credit Card and it shows. A one-time 100,000 mile bonus after spending $20,000 in the first 12 months is flat out AWESOME, and 2X miles per dollar spent is about as good as it gets with a travel rewards credit card.

Read review
Credit score requirements: Credit Score requirements are based on Money Under 30’s own research of approval rates; meeting the minimum score will give you the best chance to be approved for the credit card of your choice. If you don’t know your credit score, use our free credit score estimator tool to get a better idea of which cards you’ll qualify for. *Money Under 30 uses a [FICO 8] [Vantage 3.0] score, which is one of many different types of credit scores. *A creditor may use a different score when deciding whether to approve you for credit. ?
  • Good/
  • Excellent
Poor 500-599
Fair 600-699
Good 700-749
Excellent 750-850

What we like:

  • Earn 100,000 bonus miles when you spend $20,000 on purchases in the first 12 months from account opening, or still earn 50,000 miles if you spend $3000 on purchases in the first 3 months

  • 2X miles earned for $1 spent on all purchases

  • Receive up to $100 application fee credit for Global Entry or TSA Pre✓®

  • Earn 100,000 bonus miles when you spend $20,000 on purchases in the first 12 months from account opening, or still earn 50,000 miles if you spend $3,000 on purchases in the first 3 months
  • Earn unlimited 2X miles on every purchase, every day
  • Miles won't expire for the life of the account and there's no limit to how many you can earn
  • Receive up to $100 application fee credit for Global Entry or TSA Pre✓®
  • Redeem on travel—from vacation rentals to car rentals and more. Plus transfer your miles to over 10+ travel loyalty programs
  • No foreign transaction fees
Intro APR Purchases
N/A
Intro Term Purchases
N/A
Intro APR Balance Transfers
N/A
Intro Term Balance Transfers
N/A
Regular APR
17.24% - 24.49% (Variable)
Annual Fee
$95

Apply Now >>

We believe the Capital One Venture Rewards Credit Card has the best rewards rate—earn 2x miles per dollar spent on every purchase. There’s a signup bonus of 100,000 bonus miles when you spend $20,000 on purchases in the first 12 months from account opening, or still earn 50,000 miles if you spend $3,000 on purchases in the first 3 months.

Read our review of the Capital One Venture Rewards Credit Card

Chase Sapphire Preferred® Card

Apply Now On the Secure Website

In A Nutshell

The Chase Sapphire Preferred® Card sets the standard for travel rewards by offering an excellent 2x points on all travel and dining at restaurant purchases that you then can transfer to airline and hotel partners. And points are worth 25% more when you redeem travel through Chase Ultimate Rewards. That means that the killer 60,000 point sign-up bonus is worth $750 towards travel.

Read review
Credit score requirements: Credit Score requirements are based on Money Under 30’s own research of approval rates; meeting the minimum score will give you the best chance to be approved for the credit card of your choice. If you don’t know your credit score, use our free credit score estimator tool to get a better idea of which cards you’ll qualify for. *Money Under 30 uses a [FICO 8] [Vantage 3.0] score, which is one of many different types of credit scores. *A creditor may use a different score when deciding whether to approve you for credit.
Poor 500-599
Fair 600-699
Good 700-749
Excellent 750-850

What we like:

  • A monster of an up-front bonus. 60,000 bonus points after spending $4,000 in the first three months

  • 2x points per dollar spent on all travel and dining at restaurants, worldwide

  • Points are worth 25% more when you redeem travel through Chase Ultimate Rewards

  • Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $750 toward travel when you redeem through Chase Ultimate Rewards®
  • 2X points on travel and dining at restaurants worldwide, eligible delivery services, takeout and dining out & 1 point per dollar spent on all other purchases.
  • Get 25% more value when you redeem for travel through Chase Ultimate Rewards®. For example, 60,000 points are worth $750 toward travel.
  • With Pay Yourself Back℠, your points are worth 25% more during the current offer when you redeem them for statement credits against existing purchases in select, rotating categories.
  • Get unlimited deliveries with a $0 delivery fee and reduced service fees on orders over $12 for a minimum of one year on qualifying food purchases with DashPass, DoorDash's subscription service. Activate by 12/31/21.
  • Earn 2x total points on up to $1,000 in grocery store purchases per month from November 1, 2020 to April 30, 2021. Includes eligible pick-up and delivery services.
Annual Fee
$95
Regular APR
15.99%-22.99% Variable
Intro APR
Intro APR Purchases N/A , 0 months
Intro APR Balance Transfers N/A , 0 months

Apply Now >>

The Chase Sapphire Preferred® Card has the most generous sign-up bonus—60,000 bonus points.

But you’ll need to spend $4,000 in purchases within the first three months.

Read our review of the Chase Sapphire Preferred® Card

Bank of America® Travel Rewards credit card

The Bank of America® Travel Rewards credit card might not as flashy as some other travel rewards cards, but it is one of the best—especially if you want to avoid an annual fee. It offers decent (and simple) rewards, $0 annual fee, and no foreign transaction fee.

It’s perfect for anyone who wants to travel internationally but isn’t ready to splurge for one of the premium travel cards.

Read our full review of the Bank of America® Travel Rewards credit card.

Discover it® Miles

The Discover it® Miles offers a competitive choice for consumers with good credit who want to earn a better-than-average rewards rate without an annual fee.

While other travel rewards cards feature large sign-up bonuses, the Discover it® Miles will match your rewards in your first year instead. The card is very strong product that stands out in an extremely competitive market.

Read our full Discover it® Miles review. 

Finding the best card for you

Not sure you want any of the cards above? Finding the right credit card for you is much simpler if you know your credit score, and can narrow your search to only the cards you know you’ll get approved for. We’ve made it easy for you. If you don’t already know your score, use our quick and free Credit Score Estimator tool – then find the perfect card for you!

Summary

With a travel rewards credit card, you’ll earn credit card miles with every purchase, which you can redeem for any future travel purchases on that card. When redeemed as a statement credit, credit card miles are usually worth one cent per mile.

Frequent flyer miles that you earn when you fly—or by using an airline’s branded credit card—must be redeemed when you purchase an award ticket on that airline or its partners. You’re much more limited in how you can redeem frequent flyer miles, but they can be worth much more than a penny a piece if you’re strategic.

Read more:

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About the

Total Articles: 354
David Weliver is the founder of Money Under 30. He's a cited ity on personal finance and the unique money issues he faced during his first two decades as an adult. He lives in Maine with his wife and two children.

Article comments

We invite readers to respond with questions or comments. Comments may be held for moderation and will be published according to our comment policy. Comments are the opinions of their s; they do not represent the views or opinions of Money Under 30. Comments have not been reviewed or approved by any advertiser, nor are they reviewed, approved, or endorsed by our partners. It is not our partner’s responsibility to ensure all posts or questions are answered.
12 comments
amy says:

Do I have to pay off the balance in full every month to get the bonus?

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Llesna says:

1.5%? Citibank Double cash pays 2%, no questions asked or gimmiks. I’ve seen nothing better.

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athensguy says:

I primarily use Cash Back cards. My primary card is the former Schwab Invest First Visa which is 2% back for every purchase. Someone applying now should go for one of the Fidelity Amex cards.

In other categories, the Penfed Gas Cash card is 5% on gas. The Amex Blue Cash Preferred is 6% back on groceries and 3% at department stores with a $75 annual fee. The Blue Cash mentioned above is deprecated.

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Mark says:

I think Chase has the best cash back system, like it says in the article, 1% cash back, + 5% back for certain categories which change each quarter. But my card also gives me an additional .1% and 10 points per purchase. So even on little purchases, I get at least 10 cents back. Plus, if you open an account and start using it they give you $100 back.

There might be a better card out there(available to everyone), but I haven’t seen it yet.

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Brian says:

Miles no doubt. I just booked two first class tickets to London with a retail price of 18k (9k each) for 250,000 miles on American. 7 cents a mile.

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Rachael says:

We don’t get the miles cards for the spending miles–we get them for the sign up bonuses! We usually get one each per year, on the same airline. Then we charge all our extra purchases for that year on there, getting another 10-15k each. Putting major app德扑圈官方网址home repairs or buying cars on them (and then paying it off immediately of course) helps rack up miles. We have gotten to go to Hawaii, Mexico, and even Brazil once for free, as well as lots of regular trips back to the Midwest.

Also, most airlines will give you a free flight at 25k. Its easy to get the flight you want if you plan way ahead.

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Joy says:

We used to be all about the cash back (Amex Costco card which gave 3% on gas and groceries, 2% on food and 1% on everything else), but we recently switched to a miles card instead. With our Amex card we were receiving $300-400 back each year, but we realized that with the Virgin America card, we could be getting at least one domestic flight a year, which was up to a $600+ value on the flights we frequent. Plus, there’s no annual fee, and Visa is more commonly accepted than Amex.

We’re probably an uncommon case, but the miles card just worked out to a better deal for us, even without first class/international tickets.

Reply
Andrew says:

I happily pay the $95 annual fee for the Delta Skymiles Amex. With it, I get the first checked bag free (normally ~$25) for myself and anyone on my itinerary; so the card pays for itself with one round trip flight for two(2 checked bags each way). I also get a “buy 1 fare get a companion fare for $99” coupon every year. My wife and I make at least 2 cross-country trips/year so the card is worth it to us. If you don’t travel often than I can’t see how the card would be worth it. There’s no way the average person could rack up 40,000 miles(the average mileage cost of a domestic trip) by spending alone.

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Sarah says:

I also always do cash. When I traveled for work airline cards were worth the miles but like you mentioned you have to be a high volume traveler to get the value for these cards.

In my credit lifetime I have experience with Capital One, Mastercard, Discover, and American Express. Discover and American Express have FAR superior customer service, never mess up my bill or rewards balance, and have never compromised my account number.

Capital One absolutely struggled with multiple address changes until I finally had to cancel the card and Mastercard compromised my account number and had to re issue the card 3 times in 1.5 years.

Therefore, I think the “perks” of good business outweigh slight increases I could find in cash back from a provider besides America Express and Discover. However, I maintain my mastercard because it is widely accepted whereas some retailers do not accept Discover or American Express.

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Brian says:

I’ve not had any issues with Capital One, but if I had, I’d do the same and use another card even if it was slightly lower rewards

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Grace says:

Delta Skypeso is the worst program among the U.S. airlines. The others have much better redemption rate if you have their miles to burn.

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Brian says:

I always do cash.

I use Discover and Capital One (the latter of which constantly tries to get me to switch to miles, and I constantly refuse)

The Discover I only use for their periodic 5% cash back categories, up to the limit. I dislike the .25% prior to spending $3,000 in a year, I hate that you cannot get the rewards until $50 is accumulated, and I get better rewards with Capital One.

I use the Capital One for all other purchases. It gives me 1% cash rewards + an annual 25% bonus on the rewards… Effectively 1.25% cash back. There is no minimum for redemption, and they also have periodic bonus cash back categories/stores etc.

All of my cash rewards I move into a separate savings account. I haven’t decided what to do with it, but when I do, it will be nice to know the credit card companies paid for it.

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