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Find out if you prefer points, miles or cash back rewards programs.

Credit card rewards come in many different forms. Some rewards programs grant points on purchases made with a particular credit card. Other programs forego these credit card points in favor of rewarding “miles” to a cardholder making eligible purchases. And then you have the cash back credit card with which cardholders can earn back a certain percentage on their purchases.

What’s the difference between these programs? How are credit card points different from cash back or even miles? Let’s explore the difference to find out which is better!

What is a cash back credit card?

A cash back credit card lets you earn back a small percentage of any eligible purchase you make with the card. In the past, we’ve covered our top picks for best cash back credit card. An example of this would be a credit card that offers 5% cash back for every dollar you spend on gas at the pump. If you charged $50 to that card, you would actually get back $2.50 back.

The case for cash back credit cards

You tend to have more freedom in how you spend your rewards when it’s cash back. A lot of rewards programs that rely on the accrual of points and miles can limit you to their storefronts or purchase portals. Cash back also isn’t nearly as complicated a currency as points and miles which can fluctuate or sometimes feature a baffling rate of exchange.

What are credit card points?

Credit card points are a kind of alternate currency you accumulate from charging purchases to a points-based rewards system. For example, a credit card offering 2x points for every dollar spent on gas would yield 100 points back for $50 of gas. These points can then be exchanged for cash back or put toward purchases within a credit card providers shopping portal.

The case for credit card points

Chase Sapphire Preferred® Card

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Chase Sapphire Preferred® Card

• Rewards Rate:

  Enjoy new benefits such as a $50 annual Ultimate Rewards Hotel Credit, 5X points on travel purchased through Chase Ultimate Rewards®, 3X points on dining and 2X points on all other travel purchases, plus more.

• Welcome Offer:

  Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That’s $750 when you redeem through Chase Ultimate Rewards®.

• Annual Fee:
  $95
• Regular APR:
  15.99%–22.99% variable
• Balance Transfer Intro APR:
  N/A
• Purchase Intro APR:
  N/A
• Highlights
  • Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That’s $750 when you redeem through Chase Ultimate Rewards®.
  • Enjoy new benefits such as a $50 annual Ultimate Rewards Hotel Credit, 5X points on travel purchased through Chase Ultimate Rewards®, 3X points on dining and 2X points on all other travel purchases, plus more.
  • Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards®. For example, 60,000 points are worth $750 toward travel.
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In some cases, it can be quite easy to earn tens of thousands of credit card points when you take advantage of a signup bonus. Take the Chase Sapphire Preferred® Card, for example. When you spend $4,000 within the first three months of activating this card, you instantly earn 60,000 bonus points. Those points can be converted into $750 you can put toward travel.

And while charging $4,000 might sound a little steep, you need to consider your everyday spending. Take, for example, our tips for saving on holiday travel. If you were to use a credit card like the Chase Sapphire Preferred® Card on all of your everyday purchases (TV, phone, groceries, gas, coffee, etc.) you would reach this threshold and be able to make the most of this signup bonus.

Another great thing about credit card points is that they are sometimes worth more when you use them through a card provider’s purchase portal. Going back to the Chase Sapphire Preferred® Card, you can redeem the points for a statement credit of about $0.01 per point. However, redeeming these points for travel through their Chase portal means each point equals $0.0125.

What are credit card miles?

Credit card miles more or less operate in the same capacity as points. This is why miles are often lumped together with credit card points. However, there is a subtle difference. Usually, the miles you earn on purchases you make are tied to a specific airline’s frequent flyer program. This can make them slightly more limiting as they can, often, only be redeemed through that airline’s program.

The case for credit card miles

A card that lets you earn miles instead of points or cash back is usually most ideal for frequent flyers. These cards allow you to redeem your miles without having to worry about blackout dates or restrictions on your travel plans. Furthermore, miles can be redeemed for a statement credit on more than just airfare including hotels, car rentals, and more.

Another great thing about most credit card miles programs is that your miles do not expire so long as your account is active and in good standing. This means you have ample time to accrue miles through your everyday purchases you can then put towards a free trip.

Is it better to get points or cash back?

As you might have already guessed, the clear victor in this clash depends solely on your own personal needs and expenses. If you are a frequent flyer or do a lot of business travel, then you’ll benefit more from a rewards credit card that focuses on miles or points. If, however, you like more flexibility in your rewards credit card, then you might want to go with cash back.

Just realize that the flexibility of cash back might fall short of the redemption rates of credit card points programs. In the end, it depends on what you are using the card for. Make sure you take stock of your everyday expenditures and what you would use a credit card most for in your life. Then you can decide whether you want points, miles, or a cash back credit card.

Take the quiz!

Answer a few short questions to find out if your ideal credit card reward is points, miles or cash back.