Cash back vs. points vs. miles: What type of rewards card is best for me?

Learn how to choose the right rewards card for your spending habits.

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You’ve likely encountered the range of ways providers reward you for your spending. Some credit cards offer cash back, while others reward you with miles or points – but your ideal rewards card will depend on where you spend the most money and how you want to redeem your rewards.

BMO CashBack Mastercard

BMO CashBack Mastercard

19.99 % APR

Purchase interest rate

Eligibility criteria, terms and conditions, fees and charges apply

BMO CashBack Mastercard

Apply today and get up to 5% cash back on all eligible purchases within the first 3 months.

  • Purchase interest rate: 19.99%
  • Cash advance rate: 22.99%
  • Balance transfer rate: 22.99%
  • Annual fee: $0
  • Credit rating: Good
  • Minimum age: Age of majority in the province/territory of residence.
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What are cash back, points and miles credit cards?

All three credit card types (cash back, points and miles) fall under the family of “rewards cards“. These credit cards allow cardholders to earn rewards on their overall spending or within specific spending categories, such as groceries, gas or business expenses.

If you’re trying to decide between a cash back, points or miles card, note that they are similar rewards options but differ in how much value you get from the categories you’re spending in and even how you redeem them. Points and miles cards generally earn you a higher value per $1 spent, but you’ll need to spend time redeeming them. Cash back cards are easy-to-understand rewards and don’t usually require you to redeem them – which means you won’t have to lift a finger to get your hands on them.

How do I choose between a cash back, miles or points credit card?

When choosing whether to go with cash back, points or miles, consider the following:

Cash backPointsMiles
Spending categories
  • Good for everyday spending on categories like groceries, gas, dining and recurring bill payments.
  • Good for everyday spending on groceries, gas and dining, as well as racking up points from general travel purchases including hotels and vacations.
Spend limitations
  • Most cash back cards allow unlimited earnings, however some providers may set a limit.
  • It’s rare to find a points card that comes with a cap, however points may expire.
  • Miles cards generally don’t put a cap on the miles you can earn, however points may expire or there may be blackout dates (limits set on when, how and where you can use your miles).
Rewards value
  • Simple rewards structure — rewards are based on a percentage of your spending.
  • Points are typically worth from less than a cent to up to two cents each, depending on how you redeem them.
  • Miles are usually worth from less than a cent to a few cents.
Welcome offer
  • Generally offer low signup bonuses of up to $300.
  • Offer signup bonuses of $500+, but the spending criteria to earn the bonus might also be higher.
  • Offer signup bonuses of $500+, but the spending criteria to earn the bonus might also be higher.
Optional balance transfer offers
  • Some cash back cards offer an intro APR period on balance transfers.
  • Some points cards offer an intro APR period on balance transfers.
  • Few miles cards offer an intro APR period on balance transfers.
Additional perks
  • Purchase protection, zero fraud liability and extended warranties.
  • May offer additional perks like airport lounge access, travel insurance, concierge services and more.
  • Strong travel perks, such as priority boarding, airline or hotel credits, airport lounge access, comprehensive travel insurance, concierge services and more.
Annual fee
  • Some cash back cards have no annual fee, but if they do it’s typically no more than $120.
  • Range from $0 to $699 or more.
  • Range from $0 to $899 or more.
Interest rates
  • Interest rates vary, but usually sit around 19.99%. Some low rate cards are available.
  • Interest rates vary, but usually sit around 19.99%. Some low rate cards are available.
  • Interest rates vary, but usually sit around 19.99%.

Compare top rewards credit cards

Compare some of the top rewards credit cards on the market in our table below.

Name Product Bonus Points Rewards Program Purchase Interest Rate Cash Advance Rate Annual Fee Rewards with this card Description
HSBC +Rewards™ Mastercard®
10,000
11.9%
11.9%
$0 annual fee for the first year ($25 thereafter)
Earn 2 Points for every $1 spent on eligible dining or entertainment purchases.
Earn 10,000 Points ($50 travel value). Plus, get a full annual fee rebate for the Primary Cardholder for the first year. Apply by June 29, 2020. This offer is only available to residents of Canada other than the province of Quebec. Conditions apply.
HSBC World Elite® Mastercard®
60,000
19.9%
22.9%
$0 annual fee for the first year ($149 thereafter)
Earn 3% in travel rewards on all eligible travel purchases (6 Points per $1 spent) and earn 1.5% in travel rewards on all other eligible purchases (3 Points per $1 spent).
Earn up to 60,000 Points ($300 travel value). Plus, get a full annual fee rebate for the Primary Cardholder for the first year. Apply by June 29, 2020. This offer is only available to residents of Canada other than the province of Quebec. Conditions apply.
BMO AIR MILES World Elite Mastercard
2,000
Air Miles
19.99%
22.99%
$0 annual fee for the first year ($120 thereafter)
Get 1 AIR MILE for every $10 spent on eligible purchases.
Earn a bonus of up to 2,000 AIR MILES. Terms apply. Plus, get the annual fee of $120 waived in the first year.
BMO World Elite Mastercard
35,000
BMO Rewards
19.99%
22.99%
$0 annual fee for the first year ($150 thereafter)
Get 3 BMO Rewards points per $1 spent on eligible travel, dining and entertainment purchases (up to $50,000 spend annually), and get 2 BMO Rewards points per $1 spent on all other eligible purchases (and once you reach the $50,000 annual spend).
Earn a bonus of up to 35,000 BMO Rewards points with a minimum spend of $3,000 on eligible purchases in the first three months of card membership ($250 travel value to be used towards a flight booked through bmorewards.com). Plus, get the $150 annual fee waived in the first year.
American Express Business Edge Card
30,000
Membership Rewards
19.99%
21.99%
$99
Earn 3 Membership Rewards points for every $1 spent on eligible business essentials including office supplies, electronics, rides, gas, eats and drinks (up to an annual earn of 75,000 Membership Rewards), and earn 1 Membership Reward point for every $1 spent on all other eligible purchases.
Earn up to 42,000 Membership Rewards points in your first year. Earn a Welcome Bonus of 30,000 Membership Rewards points when you spend at least $5,000 on eligible purchases within the first three months, and earn 1,000 Membership Rewards points each month (a total of 12,000 annually) when you spend a minimum of $3,000 on eligible purchases
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Tips to maximize your rewards

  • Use multiple cards. More than one card can help you optimize your reward earnings. For example, when dining, use the card that earns the highest cash back or points at restaurants. While on flights, use the card with the strongest miles or points rewards. Use whichever card will reward you highest for the spending category. But if you have multiple credit cards, watch out for annual fees – these can eat away at any value you get from rewards.
  • Combine points. Some credit card programs allow you to transfer your points or miles to other programs. Using two credit cards that allow you to transfer points at a rate of 1:1 can be a powerful way to increase the amount of points or miles you earn overall.
  • Keep an eye on signup bonus caps. If you opt for a rewards card, chances are the provider sets a cap on how much you can earn during the signup bonus offer. Make sure you know any limits on your earnings, and if you reach the cap, use another card to continue earning rewards.
  • Pay your balance on time. If you don’t, you could end up paying late fees, taking on penalty APRs and potentially lose your rewards altogether. Plus, paying fees will take away from any value you’ll get from earning rewards.

Bottom line

Rewards credit cards can help you earn cash back, miles or points on your everyday spending. Both cash back and points cards can be a powerful choice for those looking to earn rewards on everyday spending at grocery stores, gas stations or restaurants, while miles cards typically revolve around travel — think airlines, hotels and rental cars. Points cards can be a powerful travel companion too, which makes them an overall solid rewards card.

Both points and miles cards will earn you a higher value per $1 spent, but cash back is an easier-to-understand reward that is usually directly deposited into your bank account or sent to you via cheque in the mail.

Before you settle on a rewards card, compare other credit cards to find one that best suits your spending habits and financial needs.

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