Miles vs. Cash Back: Which Type of Credit Card Is Best For You?
- Depending on the rewards credit card, you may earn cash back, miles or points for every purchase you make using the card.
- Miles credit cards can be extremely valuable for frequent travelers
- Cash back credit cards can be more beneficial if you’re looking for high-value, no-fuss rewards.
Whether you should choose a cash back or miles credit card (or both) depends on the type of consumer you are. If you’re a frequent traveler who can take advantage of airline perks, like free checked bags, airport lounge access, priority boarding and more, you’ll enjoy the benefits of miles cards. But if you rarely travel or you don’t want to do too much legwork to use your rewards, you may prefer the more straightforward rewards that come with cash back cards.
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. Your miles can then be used to help offset the cost of flights, upgrades or hotel stays.
These credit cards are great for frequent travelers who can benefit from free flights and hotel nights. Many also offer valuable travel perks, like priority boarding, early check-in and annual credits. That said — miles credit cards often charge annual fees that tend to increase with the amount of additional perks and benefits offered by the card.
Credit card miles are a rewards currency that you earn each time you make a purchase with a travel rewards card. Miles typically start at 1 mile per dollar spent on general purchases and can sometimes reach up to 10 miles per dollar when used to make purchases through the issuer’s travel portal. Just know that cards with higher earning rates also usually charge higher annual fees.
For example, the Chase Sapphire Reserve® lets you earn 8x points on all purchases through Chase Travel℠, including The Edit℠ and 4x points on flights and hotels booked direct. Plus, earn 3x points on dining worldwide & 1x points on all other purchases. All for a $795 annual fee.
Types of miles credit cards
The main types of miles credit cards are airline credit cards, hotel credit cards and general travel rewards cards. Here’s what you need to know about each:
While airline credit cards are often co-branded with a specific airline, there are general travel cards that offer valuable airline rewards and perks. Some airline-specific benefits may include:
– Priority boarding
– Airport lounge access
– Free checked bags
– Priority upgrades and more
TIP: See if you live in a city that’s a hub for a particular airline. For example, if you live in Atlanta, which is a Delta hub, getting a co-branded Delta credit card can provide convenience and help maximize your rewards-earning potential.
Many airlines are also part of airline alliances. You can transfer miles earned on one airline to any of the other airlines in their alliance — making their airline cards even more valuable.
Check out LendingTree’s picks for the best airline miles credit cards.
Hotel credit cards are cards that are co-branded with a specific hotel chain, or general travel cards that offer hotel-specific perks and elevated rewards on hotel purchases. Hotel benefits can include:
– Elite member status
– Priority upgrades
– Early check-in and late checkout
– Free breakfast
– Free night awards
– On-property hotel credits and more
But it’s important to note that the value of hotel credit card points is typically inflated. So they tend to be worth less than airline rewards cards.
Check out LendingTree’s picks for the best hotel credit cards.
It can be argued that general travel rewards cards are the most valuable category of miles card. That’s because they don’t lock you into a single airline or hotel chain and can typically be flexibly transferred to various travel rewards programs to maximize their value.
For example, the Chase Sapphire Reserve® is our top overall travel card pick because it comes with a variety of valuable travel benefits, like airport lounge access, trip cancellation insurance and an annual travel credit. Plus it offers generous rewards that can be transferred to loyalty partners at a rate of 1:1.
That said — general travel rewards cards do require a bit of legwork to redeem your rewards and discern their value. This may not be ideal if you’re an infrequent traveler or prefer less fussy rewards.
Check out LendingTree’s picks for the best travel credit cards.
How to redeem credit card miles
Generally, you can redeem credit card miles for the following:
- Travel (including flights, hotel stays, upgrades and more)
- Statement credit
- Cash back
- Gift cards
- Merchandise
Just know, the value of miles tends to be pretty inconsistent and varies based on the rewards program and redemption method. That said, you can sometimes get the most value from your rewards by transferring them to a travel transfer partner.
Cash back credit cards
The rewards earned with cash back cards are straightforward, high value and easy to redeem. The rewards are essentially the same as cash, so you know exactly how much you’re earning and exactly what they’re worth. Most cash back cards offer at least 1% cash back on every purchase — with some offering up to 6% cash back on specific spending categories, like groceries.
Cash back credit cards work by returning a percentage of your card purchases to you in cash. This is known as “cash back rewards.” For example, if your cash back card offers 1% cash back on all purchases, you’ll receive 1% back of the price of everything you buy.
Types of cash back credit cards
The primary types of cash back credit cards provide flat-rate, tiered or rotating cash back rewards:
These cards offer the same cash back rate (1%, 1.5% or 2%) on every purchase you make using the card. For example, the Wells Fargo Active Cash® Card lets you earn unlimited 2% cash rewards on purchases..
Many cash back cards offer an accelerated rewards rate in specific spending categories — like dining or gas — and 1% cash back on all other purchases. For example, the Blue Cash Preferred® Card from American Express lets you earn 6% cash back at U.S. supermarkets on up to $6,000 per year in eligible purchases (then 1%), 6% cash back on select U.S. streaming subscriptions, 3% cash back at eligible U.S. gas stations and on transit (including taxis/rideshare, parking, tolls, trains, buses and more) purchases and 1% cash back on other purchases. Cash Back is received in the form of Reward Dollars that can be redeemed as a statement credit and at Amazon.com checkout.
These cards offer elevated cash back rates in popular spending categories that rotate on a monthly or quarterly basis. For example, the Discover it® Cash Back lets you earn 5% cash back at different places each quarter up to the quarterly maximum when you activate. 1% unlimited cash back on all other purchases - automatically.
Check out the 2026 cash back calendars for Discover and Chase.
How to redeem cash back
You can usually redeem cash back rewards the following ways:
- Deposit into your bank account
- Statement credit to cover your past purchases
- Check by mail
- Gift cards
- Merchandise
However, it’s worth noting that some cards require you to earn a minimum amount of cash back before you can redeem your rewards. Usually these amounts are low, but they may start around $20.
Pros and cons of miles and cash back credit cards
Both miles and cash back cards have their benefits and drawbacks. But ultimately, consumers who prefer straightforward cash rewards will prefer cash back cards, and frequent travelers will prefer earning and maximizing rewards with miles credit cards.
Miles credit cards
Pros
- Ability to maximize rewards value
- May offer travel benefits, like annual credits and travel protections
- Usually include high sign-up bonus offers
- Often offer elevated rewards on travel-related purchases
Cons
- Co-branded cards can be limiting
- Cards with more robust benefits tend to charge high annual fees
- Value of miles varies depending on how you redeem them and the specific program
Cash back credit cards
Pros
- Cash rewards are straightforward
- Rewards are easy to redeem
- Cards provide greater long-term value than miles cards
Cons
- Rewards can be capped or limited
- Cards typically don’t offer many additional perks
- Tend to offer lower sign-up offers than travel rewards cards
Which type of card is best for you?
Deciding between a cash back and miles credit card will depend on your preferences and travel habits:
- If you’re a frequent traveler who tends to stick with the same airline or hotel chain, a co-branded miles card will be the most beneficial option.
- If you travel regularly — but don’t want to be tied down to a specific brand —- a general travel rewards card may be your best option.
- If you want a simple approach to earning and redeeming rewards, a cash back credit card could be a great fit, since the value you can get from rewards is unchanging.
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.