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LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.
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On this page
- Miles credit cards
- Cash back credit cards
- Pros and cons
- Which type is best?
Written by
Tracy Brackman
Edited by
Robin Ratcliff
Updated on:
Content was accurate at the time of publication.
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Key Takeaways
- Depending on the rewards credit card, you may earn cash back, miles or points for every purchase you make using the card.
- Miles credit cards can be extremely valuable for frequent travelers
- Cash back credit cards can be more beneficial if you’re looking for high-value, no-fuss rewards.
Whether you should choose a cash back or miles credit card (or both) depends on the type of consumer you are. If you’re a frequent traveler who can take advantage of airline perks, like free checked bags, airport lounge access, priority boarding and more, you’ll enjoy the benefits of miles cards. But if you rarely travel or you don’t want to do too much legwork to use your rewards, you may prefer the more straightforward rewards that come with cash back cards.
Miles credit cards
Miles credit cards, also referred to as travel rewards credit cards, allow you to earn a certain amount of miles on every purchase you make with your card. Your miles can then be used to help offset the cost of flights, upgrades or hotel stays.
These credit cards are great for frequent travelers who can benefit from free flights and hotel nights. Many also offer valuable travel perks, like priority boarding, early check-in and annual credits. That said — miles credit cards often charge annual fees that tend to increase with the amount of additional perks and benefits offered by the card.
What are credit card miles?
Credit card miles are a rewards currency that you earn each time you make a purchase with a travel rewards card. Miles typically start at 1 mile per dollar spent on general purchases and can sometimes reach up to 10 miles per dollar when used to make purchases through the issuer’s travel portal. Just know that cards with higher earning rates also usually charge higher annual fees.
For example, the Chase Sapphire Reserve® lets you earn 5x total points on flights and 10x total points on hotels and car rentals when you purchase travel through Chase Travel℠ immediately after the first $300 is spent on travel purchases annually. Earn 3x points on other travel and dining & 1 point per $1 spent on all other purchases. All for a $550 annual fee.
Types of miles credit cards
The main types of miles credit cards are airline credit cards, hotel credit cards and general travel rewards cards. Here’s what you need to know about each:
While airline credit cards are often co-branded with a specific airline, there are general travel cards that offer valuable airline rewards and perks. Some airline-specific benefits may include:
- Priority boarding
- Airport lounge access
- Free checked bags
- Priority upgrades and more
Tip: See if you live in a city that’s a hub for a particular airline. For example, if you live in Atlanta, which is a Delta hub, getting a co-branded Delta credit card can provide convenience and help maximize your rewards-earning potential.
Many airlines are also part of airline alliances. You can transfer miles earned on one airline to any of the other airlines in their alliance — making their airline cards even more valuable.
Check out our picks for the best airline miles credit cards.
Hotel credit cards are cards that are co-branded with a specific hotel chain, or general travel cards that offer hotel-specific perks and elevated rewards on hotel purchases. Hotel benefits can include:
- Elite member status
- Priority upgrades
- Early check-in and late checkout
- Free breakfast
- Free night awards
- On-property hotel credits and more
But it’s important to note that the value of hotel credit card points is typically inflated. So they tend to be worth less than airline rewards cards.
Check out our picks for the best hotel credit cards.
It can be argued that general travel rewards cards are the most valuable category of miles card. That’s because they don’t lock you into a single airline or hotel chain and can typically be flexibly transferred to various travel rewards programs to maximize their value.
For example, the Chase Sapphire Reserve® is our top overall travel card pick because it comes with a variety of valuable travel benefits, like airport lounge access, trip cancellation insurance and an annual travel credit. Plus it offers generous rewards that can be transferred to loyalty partners at a rate of 1:1.
That said — general travel rewards cards do require a bit of legwork to redeem your rewards and discern their value. This may not be ideal if you’re an infrequent traveler or prefer less fussy rewards.
Check out our picks for the best travel credit cards.
How to redeem credit card miles
Generally, you can redeem credit card miles for the following:
- Travel (including flights, hotel stays, upgrades and more)
- Statement credit
- Cash back
- Gift cards
- Merchandise
Just know, the value of miles tends to be pretty inconsistent and varies based on the rewards program and redemption method. That said, you can sometimes get the most value from your rewards by transferring them to a travel transfer partner.
Cash back credit cards
The rewards earned with cash back cards are straightforward, high value and easy to redeem. The rewards are essentially the same as cash, so you know exactly how much you’re earning and exactly what they’re worth. Most cash back cards offer at least 1% cash back on every purchase — with some offering up to 6% cash back on specific spending categories, like groceries.
What are cash back rewards?
Cash back credit cards work by returning a percentage of your card purchases to you in cash. This is known as “cash back rewards.” For example, if your cash back card offers 1% cash back on all purchases, you’ll receive 1% back of the price of everything you buy.
Types of cash back credit cards
The primary types of cash back credit cards provide flat-rate, tiered or rotating cash back rewards:
These cards offer the same cash back rate (1%, 1.5% or 2%) on every purchase you make using the card. For example, the Wells Fargo Active Cash® Card lets you earn unlimited 2% cash rewards on purchases.
Many cash back cards offer an accelerated rewards rate in specific spending categories — like dining or gas — and 1% cash back on all other purchases. For example, the Blue Cash Preferred® Card from American Express lets you earn 6% Cash Back at U.S. supermarkets on up to $6,000 per year in purchases (then 1%), 6% Cash Back on select U.S. streaming subscriptions, 3% Cash Back at U.S. gas stations and on transit (including taxis/rideshare, parking, tolls, trains, buses and more), 1% Cash Back on other purchases. Terms apply. Cash back is received in the form of Reward Dollars that can be redeemed as a statement credit or at Amazon.com checkout.
These cards offer elevated cash back rates in popular spending categories that rotate on a monthly or quarterly basis. For example, the Discover it® Cash Back lets you earn 5% cash back on everyday purchases at different places you shop each quarter like grocery stores, restaurants, gas stations, and more, up to the quarterly maximum when you activate. Plus, earn unlimited 1% cash back on all other purchases—automatically.Redeem your rewards for cash at any time.
Check out the 2024 cash back calendars for Discover and Chase.
How to redeem cash back
You can usually redeem cash back rewards the following ways:
- Deposit into your bank account
- Statement credit to cover your past purchases
- Check by mail
- Gift cards
- Merchandise
However, it’s worth noting that some cards require you to earn a minimum amount of cash back before you can redeem your rewards. Usually these amounts are low, but they may start around $20.
Pros and cons of miles and cash back credit cards
Both miles and cash back cards have their benefits and drawbacks. But ultimately, consumers who prefer straightforward cash rewards will prefer cash back cards, and frequent travelers will prefer earning and maximizing rewards with miles credit cards.
| Miles credit cards | Cash back credit cards | |
|---|---|---|
Pros | Ability to maximize rewards value May offer travel benefits, like annual credits and travel protections Usually include high sign-up bonus offers Often offer elevated rewards on travel-related purchases | Cash rewards are straightforward Rewards are easy to redeem Cards provide greater long-term value than miles cards |
| Cons | Co-branded cards can be limiting Cards with more robust benefits tend to charge high annual fees Value of miles varies depending on how you redeem them and the specific program | Rewards can be capped or limited Cards typically don't offer many additional perks Tend to offer lower sign-up offers than travel rewards cards |
Which type of card is best for you?
Deciding between a cash back and miles credit card will depend on your preferences and travel habits:
- If you’re a frequent traveler who tends to stick with the same airline or hotel chain, a co-branded miles card will be the most beneficial option.
- If you travel regularly — but don’t want to be tied down to a specific brand —- a general travel rewards card may be your best option.
- If you want a simple approach to earning and redeeming rewards, a cash back credit card could be a great fit, since the value you can get from rewards is unchanging.
Tip: Depending on your credit, you don’t need to limit yourself to a single type of rewards card. It can be extremely beneficial to own both a cash back and miles card at the same time as long as you use them responsibly.
To see rates & fees for American Express cards mentioned on this page, visit the links provided below:
The information related to the Wells Fargo Active Cash® Card has been collected by LendingTree and has not been reviewed or provided by the issuer of this card prior to publication. Terms apply.
The content above is not provided by any issuer. Any opinions expressed are those of LendingTree alone and have not been reviewed, approved, or otherwise endorsed by any issuer. The offers and/or promotions mentioned above may have changed, expired, or are no longer available. Check the issuer's website for more details.
Tracy Brackman
Tracy Brackman is a senior editor and credit card expert at LendingTree, where she writes and edits educational articles on credit cards and personal finance using her 14+ years of experience in the industry.
Before joining LendingTree in 2019, Tracy worked as a products editor for CreditCards.com, where she developed the credit card products section and wrote breaking news content focused on credit cards.
Prior to that, she worked as a product information manager for Bankrate, where she managed the credit card product details and maintained compliance for two affiliate networks, as well as Bankrate-owned and operated sites.
She began working in the credit card space in 2009 as the editorial department manager for FlexOffers, an affiliate marketing company.
Specialties
- Credit card product reviews
- Personal finance education
- Credit card compliance
Achievements
- 14+ years of credit card reporting experience
- Helped establish a process to maintain credit card compliance for editorial content
Education
- Ohio State University
- Florida International University
Tracy’s favorite credit cards
“Currently, I like to use my American Express® Gold Card to earn a high rewards rate on dining and grocery purchases — the two categories I spend the most in each month. I also love the protections that the card provides on my purchases and travel. My husband and I are able to easily combine our Membership Rewards points to use toward flights and hotel stays.”
Read More
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