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

If you’re in the market for a new rewards card, you’ve likely encountered the range of ways providers reward you for your spending. Some rewards programs are better for specific categories of spending. And each type of card offers perks and benefits that you might not find anywhere else.

What are cashback, points and miles credit cards?

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

Your options often revolve around cash back, points or miles. While similar, these options differ in how much value you get from the categories you’re spending in and even how you redeem them.

Find your ideal rewards credit card

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How do I choose what’s best for me?

When you can’t decide which rewards credit card to choose, consider a few key questions.

  • What do you spend the most money on?
  • Cashback cards in general offer the strongest rewards on everyday spending, like groceries, gas, dining or department stores.
  • Points are generally earned for hotels, travel, dining or entertainment purchases.
  • Miles are earned through travel cards or cobranded airline cards.
  • How much money do you spend on particular categories?
  • Some cashback cards limit how much you can earn — such as 6% cash back at grocery stores on up to $6,000 a year, reverting to 1% back after that. This is especially true for cashback cards with rotating categories, where every quarter you earn the highest rewards on specific purchases.
  • It’s rare to find a points cards that comes with similar restrictions.
  • Miles cards generally don’t put a cap on the miles you can earn.
  • How much are your rewards worth?
  • Cashback cards offer the simplest rewards structure — generally, you know how much you get.
  • Points are typically worth from less than a penny to up to two cents each, depending on how you redeem them.
  • Miles can be worth from less than a cent to a few cents.
  • Does the card offer a welcome offer or signup bonus?
  • Cashback cards generally offer low signup bonuses of up to $200. You can sometimes get more than that if the card requires an annual fee.
  • Many points cards offer signup bonuses of up to $500, but the spending criteria to earn the bonus might also be higher.
  • Miles cards offer high signup bonuses of up to $500 on average, and they also typically require a higher spending ceiling to clear the bonus.
  • Are you looking to transfer a balance to your new card?
  • Many cashback cards offer an intro APR period on balance transfers, which can be ideal if you’re paying high interest on another card and want to consolidate your debt.
  • Points and miles cards don’t often offer intro APR periods on balance transfers.
  • Do you plan to make a large purchase?
  • Cashback cards often come with an intro APR period on purchases. It can help you earn cash back on large purchases and save money on unnecessary interest if you pay it off before your intro expires.
  • Points and miles cards generally don’t offer intro APR periods on purchases.
  • What else can you get with the card?
  • Cashback cards can come with perks like purchase protection, zero fraud liability and extended warranties.
  • Points cards can offer the same perks along with complimentary Wi-Fi for hotel brands or complimentary airport lounge access for travel cards, TSA PreCheck or Global Entry fee credits and more.
  • Miles cards usually offer the strongest travel perks, which can include free checked bags on your flights, priority boarding, airline fee credits and lounge access.
  • Do you want to pay an annual fee?
  • If a cashback card requires an annual fee, it’s typically no more than $95. Annual-fee cards tend to come with stronger cashback rates and higher signup bonuses.
  • Annual fees for points cards can range from $0 to $450 or more. Generally, the more the card costs, the more perks and benefits you get.
  • Miles cards can also range from $0 to $450 or more. Like points cards, you typically get better perks and benefits the more you pay for the card.
  • Do you travel often outside the US?
  • Cashback cards are poor travel companions, charging foreign transaction fees equal to 3% of each transaction.
  • Not all points cards charge foreign transaction fees. In general, cards focused on travelers forgo these fees.
  • Miles cards typically offer no foreign transaction fees, although you will find a few that do. Carefully read the card’s terms, especially if you travel often and want to use your card abroad.
  • Are you looking for a low interest rate?
  • Reward cards tend to have higher interest rates of up to 26% variable, depending on your creditworthiness. Try to pay your statements on time to avoid offsetting your rewards with unnecessary interest — or losing them altogether.

Compare top rewards credit cards

Updated October 23rd, 2018
Name Product Welcome Offer Reward Value per Dollar APR (Annual Percentage Rate) for Purchases Annual Fee
$150 statement credit after you spend $1,000 in purchases on your new Card within the first 3 months.
1% cash back
14.99% to 25.99% variable
$0
Earn a $150 bonus statement credit after you spend $1,000 on purchases in the first 3 months. Rates & Fees
$200 statement credit after you spend $1,000 in purchases on your new Card within the first 3 months.
1% cash back
14.99% to 25.99% variable
$95
Earn $200 bonus cash back after you spend $1,000 on purchases in the first 3 months. Rates & Fees
$250 Back. Here’s how: Earn a $150 statement credit after you spend $1,000 or more in purchases with your new card within the first 3 months of card membership. Plus, earn an additional $100 statement credit after you spend an additional $6,500 in purchases within your first 12 months.
1.5% cash back
14.99% to 25.99% variable
$0
Earn up to $250 back. Earn $150 back after you spend $1,000 or more in purchases with your new Card within the first 3 months of Card Membership. Plus, earn an additional $100 back after you spend an additional $6,500 in purchases within your first 12 months. You will receive the cash back in the form of a statement credit. Rates & Fees
75,000 Bonus Points after you use your new Card to make $3,000 in purchases within the first 3 months.
2 points
17.74% to 26.74% variable
$0 annual fee for the first year ($95 thereafter)
Enjoy a $0 annual fee on the first year and earn up to 2 Starpoints® for every dollar of eligible purchases. Rates & Fees
125,000 Hilton Honors Bonus Points with the Hilton Honors American Express Ascend Card after you use your new Card to make $2,000 in eligible purchases within the first 3 months of Card Membership.
3 points
17.74% to 26.74% variable
$95
Earn 125,000 Hilton Honors™ Bonus Points after you spend $2,000 or more in purchases with your new Card within the first 3 months of Card Membership. Rates & Fees
75,000 Hilton Honors Bonus Points with the Hilton Honors American Express Card after you use your new Card to make $1,000 in eligible purchases within the first 3 months of Card Membership.
3 points
17.74% to 26.74% variable
$0
Earn 75,000 Hilton Honors™ Bonus Points after you spend $1,000 in purchases on the Card within your first 3 months of Card Membership. Rates & Fees
Earn a $150 cash rewards intro bonus after spending $2,500 in the first 3 months. 10% Anniversary Bonus on all Cash Rewards earned once a year.
1.5% cash back
14.99%, 18.99% or 24.99% variable
$0
Earn unlimited 1.5% cash rewards on purchases. See Rates and Fees.
10,000 bonus miles after spending $500 in purchases on your new Card in your first 3 months.
1 miles
17.74% to 26.74% variable
$0
Earn 10,000 Bonus Miles after spending $500 in purchases on your new Card in your first 3 months of Card Membership. Rates & Fees
30,000 Bonus Miles after spending $1,000 in purchases on your new card in your first 3 months and a $50 statement credit after you make a Delta purchase with your new card within your first 3 months.
1 miles
17.74% to 26.74% variable
$0 annual fee for the first year ($95 thereafter)
30,000 bonus miles after you use your new card to make $1,000 on purchases within the first 3 months. Rates & Fees
1 points
16.99% variable
$495
Mastercard Black Card members receive an annual $100 air travel credit toward flight-related purchases including airline tickets, baggage fees, upgrades and more.
1 points
16.99% variable
$195
Enjoy unique excursions, privileged access to exclusive events and insider opportunities.
2 points
16.99% variable
$995
Earn points every time you spend. Luxury Card enhances your purchasing power by providing you with one (1) point for every one dollar ($1) you spend. Every purchase gets you closer to the rewards you want.
Enjoy 60,000 bonus miles after spending $5,000 on purchases in the first 90 days and paying the annual fee
2 miles
17.99%, 21.99% or 24.99% variable
$0 annual fee for the first year ($89 thereafter)
Enjoy 60,000 bonus miles after spending $5,000 on purchases in the first 90 days and paying the annual fee.

Compare up to 4 providers

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 or points 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 or points 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.

Frequently asked questions

Kliment Dukovski

Kliment Dukovski is a writer who specializes in global financial markets and personal finance, with a focus on credit cards. His main goal is to deliver honest and accurate information to help you make the right financial decision. When he's not writing about finance-related subjects, he writes sci-fi stories.

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