Cash back vs. points vs. miles: Which rewards card is best for me? | finder.com
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Cashback vs. points vs. miles: What type of rewards card is best for me?

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Learn how rewards cards differ — and how to choose the right one.

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

What are cashback, points and miles credit cards?

All three credit cards fall under the family of rewards card, which allows cardholders to earn rewards on their overall spending or within specific categories, such as travel, gas or business.

If you’re considering cashback vs points vs miles, 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.

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

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

CashbackPointsMiles
Spending categories
  • Strongest rewards on everyday spending, such as groceries, gas, dining or department stores
  • Good for hotels, travel, dining or entertainment purchases
Spend limitations
  • Some cashback cards limit how much you can earn, especially cards with rotating categories
  • It’s rare to find a points card that comes with similar restrictions
  • Miles cards generally don’t put a cap on the miles you can earn
Rewards value
  • Simple rewards structure — generally, you know how much you get
  • Typically worth from less than a penny to up to two cents each, depending on how you redeem them
  • Worth from less than a cent to a few cents.
Welcome offer
  • Generally offer low signup bonuses of up to $200
  • Offer signup bonuses of up to $500, but the spending criteria to earn the bonus might also be higher
  • Offer high signup bonuses of up to $500 on average, and they also typically require a higher spending ceiling to clear the bonus
Intro APR on balance transfers
  • Many cashback cards offer an intro APR period on balance transfers
  • Usually don’t offer intro APR periods on balance transfers
  • Usually don’t offer intro APR periods on balance transfers
Intro APR on purchases
  • Often come with an intro APR period on purchases
  • In general don’t offer intro APR periods on purchases
  • Generally don’t offer intro APR periods on purchases
Additional perks
  • Purchase protection, zero fraud liability and extended warranties
  • Same perks plus complimentary Wi-Fi for hotel brands or complimentary airport lounge access for travel cards, TSA PreCheck or Global Entry fee credits and more
  • Strongest travel perks, such as free checked bags on your flights, priority boarding, airline fee credits, lounge access and a companion pass
Annual fee
  • Most cards have no annual fee, but if they do it’s typically no more than $95
  • Range from $0 to $450 or more
  • Range from $0 to $450 or more
Foreign transaction fee
  • Often charge foreign transaction fees equal to 3% of each transaction
  • In general, cards focused on travelers forgo these fees
  • Typically offer no foreign transaction fees
APR Reward cards tend to have higher interest rates of up to 26% variable, depending on your creditworthiness.

Pros and cons of cashback, points and miles cards

Cashback cards

Pros

  • Simple rewards structure and redemption.
  • Easy to know rewards values beforehand.
  • Intro APR periods on purchases and balance transfers.
  • Annual fees that range from $0 to $95.

Cons

  • Limited redemption options.
  • Can take one or two billing cycles to get your rewards.
  • Foreign transaction fees.
  • Lower signup bonuses.

Points cards

Pros

  • Highest redemption flexibility.
  • Transfer points to another account.
  • Larger signup bonuses.
  • Often no foreign transaction fee.

Cons

  • Points values differ by redemption option.
  • Can come with annual fees of up to $450.
  • Rare to find intro APR periods on balance transfers and purchases.

Miles cards

Pros

  • Solid redemption flexibility.
  • Higher signup bonuses.
  • Typically no foreign transaction fees.

Cons

  • Point values vary.
  • Annual fees as high as $450.
  • Rare to find intro APR periods on balance transfers and purchases.

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 rewards.
  • Combine points. Some credit card programs, like the Delta suite of cards or Chase cards with Ultimate Rewards, offer the highest value if you combine cards within the program. For example, only one Delta card offers 2x miles on dining. Use this card at restaurants, and use another Delta card on flights for perks like free checked bags, priority boarding and more.
  • Keep an eye on the cap. If you opt for a cashback card, make sure you know any limits on your earnings. If you reach the cap, use another card for higher rewards, if you have one.
  • Pay your balance on time. If you don’t, you could end up paying late fees, taking on penalty interest rates and potentially losing your rewards altogether.

Bottom line

Rewards credit cards can help you earn cash, miles or points on your everyday spending or within specific categories that match your lifestyle.

Cashback cards can be a better choice for rewards on everyday spending at grocery stores, gas stations, restaurants or department stores. Points cards often focus on dining, travel or entertainment purchases. And miles cards typically revolve around travel — airlines, hotels and more.

Before you settle on a rewards card, look into other credit cards to find the best that meets your habits and budget.

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