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LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.
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Cash Back vs. Miles: Which Type of Credit Card Is Best For You?

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Miles credit cards can be extremely valuable for frequent travelers, while cash back cards can be more beneficial for those looking for high value, no-fuss rewards.

Cash Back vs. Miles

Cash backMiles
Types of rewardsCashAirline miles, hotel points, flexible points
Best for optimizers
Best for simplicity
Flexible rewardsDepends on the card?
Valuable travel perks
Odds of an annual feeLowHigh

Whether you should choose a cash back or miles credit card (or both) will depend on the type of consumer you are. Frequent travelers who can take advantage of airline perks like free checked bags, airport lounge access, priority boarding and more, will enjoy the benefits of miles cards. Consumers who rarely travel or for those unwilling to do too much legwork to use their rewards may prefer the more straightforward and indisputably valuable rewards that come with cash back cards.

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Tip

Regardless of whether you choose a miles or cash back card, we always recommend using some type of rewards card so your money is working for you and you’re always earning while you’re spending.

Cash back vs. miles: Pros and cons of each

While both types of cards have their benefits and drawbacks, consumers who prefer straightforward cash rewards will prefer cash back cards, and frequent travelers will prefer earning and maximizing rewards with miles credit cards.

Cash back credit cards

Cash back credit cards work by returning a percentage of your card purchases to you in cash. For example, if your cash back card offers 1% cash back on all purchases, you’ll receive 1% (at least) back of the price of everything you buy. Over time, this can really add up and result in significant earnings, allowing you to earn while you spend.

ProsCons

  Cash rewards are straightforward

  Rewards are easy to redeem

  Offers greater long-term value than miles cards

  Rewards aren't flexible

  Rewards can be capped or limited

  Typically don't offer many additional perks

  Tend to offer lower sign-up offers than travel rewards cards

The rewards earned with cash back cards are straightforward, high value, and easy to redeem. The rewards are the same as cash, so you know exactly how much you’re earning and exactly what it’s worth. The only downside here is that these rewards can’t be maximized like miles often can be.

The value of cash back rewards always remains constant, which may be more appealing for consumers who don’t want to do any work to reap the benefits of their rewards.

Redeeming your cash back is typically an easy process. You can usually redeem cash back as:

  • A deposit into your bank account
  • A statement credit to cover your past purchases
  • A check by mail

However, it’s worth noting that some cards require you to have earned a minimum amount of cash back before you can redeem it. Usually these amounts are low, however, typically set around $25.

Miles credit cards

​Miles credit cards, also referred to as travel rewards credit cards, allow you to earn a certain amount of miles on every purchase you make with your card, which can then be used toward earning free flights, upgrades or free hotel nights.

ProsCons

  Travel rewards cards offer flexible rewards

  Offers the ability to maximize value

  Typically offer additional perks and benefits

  Usually include high sign-up offers

  Co-branded airline cards can be limiting

  Cards with stronger benefits tend to charge high annual fees

  Value of miles varies depending on how you redeem them and the specific program

While the value of miles is inconsistent and varies based on the rewards program and the method in which you choose to redeem them, some miles programs offer ways to increase the value of your points. For example, the Chase TravelSM program allows you to transfer your miles to different hotel and airline partners who offer more value per point.

Miles credit cards are great for frequent travelers who can benefit from free flights and hotel nights, as well as other travel perks that are typically included with these types of cards. One of the downsides of miles cards, however, is that they often charge annual fees, which tend to increase with the amount of additional perks and benefits offered by the card.

There are three different types of miles cards:

  • Airline credit cards,
  • Hotel credit cards
  • General travel rewards cards

Deciding which type of miles card is best for you will depend on the type of traveler you are and how loyal you are or aren’t to particular travel chains.

Cash back vs. miles credit cards: Which one should you get?

Ultimately, deciding between a cash back and miles credit card will depend on your preferences and travel habits:

  • For frequent travelers who tend to stick with the same airline or hotel chain, a co-branded miles card will be the most beneficial option.
  • For regular travelers who still want to earn miles but don’t want to be tied down to a specific brand, a general travel rewards card can be a great choice.
  • If you’re not a frequent traveler but still want to earn rewards on your spending, a cash back credit card can be a perfect fit for your needs.

It’s worth noting that depending on your credit, you don’t need to limit yourself to a single type of rewards card. It can be extremely beneficial to own both a cash back and miles card at the same time as long as you use them responsibly.

Best for simple rewards: Cash back

For consumers looking to simply earn a percentage back on all their spending, a cash back card is the way to go. You won’t have to worry about figuring out how to maximize the value of your rewards; you know you’re earning in cash, so the value of your earnings is straightforward.

Some cash back cards offer bonus spending categories, so if you want to get the most bang for your buck, make sure you use your card for all the spending you do in those higher earning categories.

Best for optimizers: Travel rewards

Unlike cash back rewards, airline miles have the advantage of being optimizable. If you have a travel rewards card and are willing to put in a bit of effort, you can stretch out the value of a single mile. Optimizers will plan itineraries that give them the best returns for the miles they have.

For example, if you spend time looking at flights on different days and times, you can book an award ticket with United so that you get $0.02 for each mile. The average value of a United mile, however, typically hovers around $0.012.

Flexible travel rewards cards are one of the best options for maximizing point value because you have the ability to transfer your points to a variety of loyalty programs. For example, the Chase TravelSM program includes transfer partners like JetBlue, United, and Southwest, among others. We’ve found an average value of 2 cents per point transferred to a Chase travel partner, which is double their normal value.

In the following example, you can see how transferring points with a miles card like the Chase Sapphire Preferred® Card can yield greater value than a simpler cash back card, like the Citi Double Cash® Card.

Sample rewards earned in the first year

Chase Sapphire Preferred® CardCiti Double Cash® Card
Earning rateEnjoy benefits such as 5x on travel purchased through Chase Travel℠, 3x on dining, select streaming services and online groceries, 2x on all other travel purchases, 1x on all other purchases, $50 Annual Chase Travel Hotel Credit, plus more.Earn 2% on every purchase with unlimited 1% cash back when you buy, plus an additional 1% as you pay for those purchases.
Sign-up bonusEarn 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 Travel℠.None
Annual fee$95$0
First year value$1,554$400

Our valuations are based on an assumption of $20,000 annual spend, with $3,000 spent on travel through Chase TravelSM, $2,000 spent on all other travel, $5,000 spent on dining, and $10,000 on everything else. We value Chase Ultimate Rewards® points at 2 cents each.

| Disclosures
Chase Sapphire Preferred® Card
Chase Sapphire Preferred® Card
apply-now-icon Apply Now
on Chase's secure site
N/A
21.49%–28.49% variable
$95
Enjoy benefits such as 5x on travel purchased through Chase Travel℠, 3x o
  • 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 Travel℠.
  • Enjoy benefits such as 5x on travel purchased through Chase Travel℠, 3x on dining, select streaming services and online groceries, 2x on all other travel purchases, 1x on all other purchases, $50 Annual Chase Travel Hotel Credit, plus more.
  • Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Travel℠. For example, 60,000 points are worth $750 toward travel.
  • Count on Trip Cancellation/Interruption Insurance, Auto Rental Collision Damage Waiver, Lost Luggage Insurance and more.
  • Get complimentary access to DashPass which unlocks $0 delivery fees and lower service fees for a minimum of one year when you activate by December 31, 2024.
  • Member FDIC
720 850
Excellent

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| Disclosures
Citi Double Cash® Card
Citi Double Cash® Card
apply-now-icon Apply Now
on Citibank's secure site
Rates & Fees
N/A
19.24% - 29.24% (Variable)
$0
Earn 2% on every purchase with unlimited 1% cash back when you
  • Earn $200 cash back after you spend $1,500 on purchases in the first 6 months of account opening. This bonus offer will be fulfilled as 20,000 ThankYou® Points, which can be redeemed for $200 cash back.
  • Earn 2% on every purchase with unlimited 1% cash back when you buy, plus an additional 1% as you pay for those purchases. To earn cash back, pay at least the minimum due on time. Plus, for a limited time, earn 5% total cash back on hotel, car rentals and attractions booked on the Citi Travel℠ portal through 12/31/24.
  • Balance Transfer Only Offer: 0% intro APR on Balance Transfers for 18 months. After that, the variable APR will be 19.24% - 29.24%, based on your creditworthiness.
  • Balance Transfers do not earn cash back. Intro APR does not apply to purchases.
  • If you transfer a balance, interest will be charged on your purchases unless you pay your entire balance (including balance transfers) by the due date each month.
  • There is an intro balance transfer fee of 3% of each transfer (minimum $5) completed within the first 4 months of account opening. After that, your fee will be 5% of each transfer (minimum $5).
600 660 720 850
Fair/Good/Excellent

How Does LendingTree Get Paid?

LendingTree is compensated by companies on this site and this compensation may impact how and where offers appears on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.

Cash back allows cardholders to earn a percentage of their spending back in cash rewards, while miles can be used towards free flights and hotel nights with various airlines and hotel chains. Cash back rewards offer unchanging value while the value of miles will depend on the particular loyalty program and method of redemption.

Points can be better than cash if you’re able to maximize their value by transferring them to a travel partner that offers more cents per point. Cash value is stagnant and doesn’t offer the option to increase the value of your rewards.

If you regularly use your cash back credit card and make sure to use it for the spending categories that offer the highest percentage of cash back, cash back can definitely be worth it. It allows you to earn a percentage back on every dollar you spend, which in time can yield significant results.

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