There are different types of credit card miles and interesting points, and their main purpose is to reward people. Companies offer such credit card rewards as a thank-you for using their services. Use credit card miles and experience the full enjoyment of life. Usually, they are related to travel, for example, you can book your favorite airline or hotel. However, the miles you earn and the points are not the same thing. They have some differences, which we will discuss in more detail below.
What Are Miles and Points?
Miles or points are a way for companies to work with different versions of a credit card that offers a wide range of emotions. Many miles and points can be earned while shopping and later exchanged for more interesting prizes. These can include travel, merchandise, gift cards, and cashback. With your cards, let you redeem miles and immerse yourself in new experiences. In addition, some cards allow you to transfer points or miles to other travel partners. This gives you more flexibility when it comes to redeeming your rewards.
What Are Miles and Points Worth?
The questions below allow you to estimate the value of your reward miles or points.
What Is Your Base Cash Value?
Their basic cash value is equal to their equivalent cash value when exchanged for various rewards. For example, many loyalty programs can have a range of values from 0.5 cents to 2 cents per point. These figures depend on many factors, such as program terms, redemption options, and market conditions. Sometimes, you can get one mile per dollar on general purchases.
What Is the Value of the Awards You Redeem for?
A study was conducted that determined that the average value of points and frequent flyer miles is approximately 1 cent each. This means that 10,000 points or miles will be worth approximately $100 in the context of travel. Or, if the cost of an airline ticket is $700 and the mileage exchange costs $0.02 per mile, then 35,000 miles would be required to redeem that ticket. Credit cards offer miles that meet the generally established standards. This information can be found in the table below.
|Exchange rate for 1 mile
|Delta Air Lines
What about Valuations?
Each company has its unique rules, approaches, and principles for evaluating points and miles that can be used. This valuation depends on many factors. For example, the type of rewards, whether there is cash back, how they can be used, and who the partners of the bonus miles program are. Companies such as American Express or Chase have a fixed value of points and allow you to redeem your miles for a certain amount of money. And other airlines have a point is worth depending on specific routes and class of service.
What’s the Difference between Miles and Points?
|Typically earned in airline loyalty programs.
|Generally earned in hotel or credit card loyalty programs.
|Often more restrictive, tied to specific airlines.
|It is more versatile and usable across various travel partners or for non-travel rewards.
|Value can vary based on airline and route.
|Value may be more consistent, especially in credit card programs with fixed-point values.
|Limited transfer options between airlines.
|Some programs offer more transfer flexibility between partners.
|Primarily used for flight-related rewards.
|It can be redeemed for flights, hotels, merchandise, or cash back, depending on the program.
|Miles are a type of earned based on distance flown.
|Points are earned based on spending with affiliated partners or credit card purchases.
|American Airlines AAdvantage, Delta SkyMiles.
|Marriott Bonvoy, Chase Ultimate Rewards.
What Types of Credit Cards Earn Miles Best?
- Airline miles cards: Your credit card miles work directly in the airline’s frequent traveler program. Every dollar you spend on your purchases can lead to a new trip, and you can use miles to book a seat. In addition, airline credit card can offer sign-up bonuses that can help new cardholders earn airline miles. This is also sometimes possible, depending on your credit score.
- Hotel cards: This credit card may earn points or rewards for hotel stays and related purchases. It works similarly to airline cards but is tied to specific hotel chains or brands. These types of credit cards also offer accelerated point earning at affiliated hotels. After you pass the threshold spending stage, you may even be given free nights. You can also redeem your points for room upgrades or hotel services.
- General travel rewards cards: Travel credit cards offer miles that can be used for various travel-related expenses. These can include flights, hotels, car rentals, cruises, etc. Travel credit card is not tied to a specific airline or hotel chain. These cards usually earn miles on purchases. A travel card can be used in such companies as Chase Sapphire Preferred, American Express Gold Card, or Capital One Venture Rewards. That is, users can redeem these points through the travel portal provided by the credit card issuer.
How to Earn the Most Miles With a Credit Card
Here are three typical methods for accruing miles with a travel rewards credit card. Below, you will learn more about how credit cards allow you to receive more miles.
Purchasing a new card allows you to receive generous welcome bonuses. This contributes to the rapid accumulation of a large number of miles. Usually, issuers provide such miles as a reward and incentive for new cardholders. If you reach a certain threshold of expenses within a period of time set by the company, then you can easily consider yourself to have miles earned. Such an influx of bonus credit card miles allows you to get what you want faster than through regular spending.
Many companies also allow you to earn credit card points or miles credit card for spending in certain categories. These, in turn, are strategically chosen to encourage you to use your card for everyday spending. Here’s a list of the most common categories besides travel:
Dining: This often includes interesting restaurants, cafes, bars, and other dining options. You can get miles of money using your credit card when you order.
Groceries: Supermarkets and grocery stores can give you the best credit miles.
Gas: This category rewards people for buying fuel by offering extra points or miles for every dollar spent on gasoline.
As we have already mentioned, credit card issuers often have travel portals. In such places, you, as a cardholder, can use your miles to book airline tickets, rent cars, and other travel services. You can also use miles per dollar on hotels. This is a safe place where you are able to redeem your miles. Their main goal is to encourage you to use their platform. But who can resist when there are so many interesting offers? Here’s a list of some of the major credit card banks that offer such programs:
- American Express
- Chase Ultimate Rewards
- Citi ThankYou
- Capital One Travel
How Do You Redeem Credit Card Miles?
Instructions on how miles can be redeemed using such methods:
- Travel-related purchases.
Redeeming miles for travel involves accessing the credit card issuer’s travel portal or platform. You can log in to your account and view available flights, hotels, or other important aspects. During checkout, you can choose to pay with miles or points. Further, the site’s instructions will help you achieve your goal.
- Miles transfers.
There are also special card programs that allow you to transfer miles or points to partner airlines or hotel loyalty programs. To check if this option is available to you, you must first log in to your account. Then, go to the transfer section and select the desired airline or hotel partner. If this option is available to you, you can enter the recipient’s loyalty program account details. After that, you can choose the number of miles or points you want to transfer.
- Cash or statement credit.
To redeem miles for cash or statement credit, you need to access the redemption section on the credit card issuer’s website or in the mobile app. As a cardholder, you can select the cash or statement credit option. Next, you should enter the number of miles you want and can redeem. Then, feel free to follow the prompts to redeem your miles correctly.
- Gift cards.
To redeem miles for gift cards, you need to have special access. This should be a special rewards exchange section of your credit card account. There, you can view the available gift card options from different merchants or brands. After selecting the desired gift card, you can enter the number of miles you want to redeem for a specific gift card value. Finally, you need to complete the activation process and follow the instructions provided on the website.
What to Pay Attention to When Earning Miles?
An annual interest rate is charged on outstanding credit card balances. That is, only if they are not paid in full by the due date. When you earn miles with a credit card, it is very important to pay attention to the concept of APR. After all, if cardholders have a balance, the accrued interest increases the cost of purchases. This is not a very good indicator. It would be better to avoid such a situation.
Balance Transfer APR
The APR of a balance transfer is an interest rate. It appears when you transfer your balance from one credit card to another. Usually, this does not affect the accumulation of miles in any way, it affects the overall financial management. Some people use balance transfers to consolidate debt or manage high-interest balances.
Credit Card Fees
Credit card fees may include:
- Annual fees
These are fees charged to the user for holding the card. Their value varies from company to company. They can range from about $50 to several hundred dollars a year.
- Balance transfer fees
Balance transfer fees are charged when transferring debt from one card to another. As a rule, they range from 3% to 5% of the transferred amount. Sometimes, balance transfers can consolidate debt and offer lower interest rates. However, such a large fee can add to the overall debt burden.
- Cash advance fees
If you use a special credit card to withdraw cash from ATMs, then you will also be charged a fee. They range from 3% to 5% of the transaction amount or have a fixed fee.
- Late payment fees
These are the so-called fines if you fail to make the minimum payment on your credit card on time. These fees are usually between $25 and $40. They also vary from card provider to card provider and can increase if you repeatedly fail to make the payment.
- Foreign transaction fees
This fee applies to purchases made abroad or in foreign currency. As a rule, their size reaches about 3% of each transaction. You can always choose a card with which you will no longer have to think about such a nuisance.
Are All Credit Card Miles Rewards the Same?
Not all rewards for miles on credit cards are the same. Various cards offer different programs for earning miles on a credit card. A good example is that you can even get 5 miles per dollar on flights booked through Capital One Travel. Such generosity is a rarity, and not all companies are willing to do such things. It’s worth noting that this option is available even if you have a co-branded credit card. In addition, some miles may require a statement credit for the purchase, and some may not. Some cards may prioritize certain categories of spending or offer higher bonuses. In turn, this actively affects how quickly miles work on credit cards.
How much are credit card miles worth?
Typically, credit card miles range from 1 to 2 cents. However, several factors always influence this estimate. For example, a specific credit card program, airline partnerships, and other important things. The more diverse the redemption options and the stronger the partnerships with airlines or other organizations, the higher the potential value of miles.
How many credit card miles do you need for a free flight?
The definition of how many miles needed for a free flight varies significantly. It is also influenced by many factors. For example, the reputation of the airline, the distance traveled, the destination, and the seat class chosen. For domestic flights in the United States, you can typically get between 7,500 and 30,000 miles. International flights are more expensive.
How do travel miles on a credit card work?
Good or excellent credit miles are accumulated through the cardholder’s spending. For every dollar you spend, you earn a certain number of miles or bonus points. They are awarded in certain categories. Then, they can be redeemed for various expenses.
How do I use miles on my credit card?
If you want to redeem your miles, you need to have access to the card issuer’s rewards platform or portal. There, you can directly redeem your miles for direct airline bookings and payment of related travel expenses. All instructions are usually provided on the website.