If you earn points or miles on purchases you'd make anyway, rewards credit cards might be a handy addition to your wallet. According to Slickdeals' 2021 study of 2,000 credit card customers, respondents saved an average of $757 per year using their rewards.
.jpg "Values of Miles and Points on Credit Cards (Detailed 2022)") |
| Values of Miles and Points on Credit Cards (Detailed 2022) |
However, keep in mind that the value of the points or miles you receive might differ dramatically between cards. The key is to select one of the top rewards credit cards and then carefully use your benefits. Here's what you should know.
How to Earn Credit Card Points
When deciding between cards and cash, reward points may be a powerful motivator. According to Ipsos research, 53% of Americans feel that collecting points and prizes helps them want to use their cards more frequently. Furthermore, 49% of those questioned stated they would consider switching cards if it meant earning more points.
Different mechanisms for earning points are available with rewards credit cards. Some companies employ a flat incentive system with a fixed amount of points received per dollar spent. Others include tiers of incentives, with some purchases receiving more points per dollar than others.
If you've previously earned a bonus with the same card or another card from the same issuer, you may be barred from receiving a welcome bonus.
Through introductory welcome incentives, anniversary bonuses, and referral bonuses, cards may also provide the chance to accrue more points. Earning these points is usually contingent on satisfying specific criteria. For example, if you charge $3,000 in purchases in the first three months, you may get 100,000 extra points.
What Is the Value of Credit Card Points?
Credit card points are typically worth one penny apiece. However, the real worth of your points will vary depending on what you redeem them for and which card you have. Your redemption possibilities may vary depending on the card:
- Make the journey
- Credits for statements
- Paying down previous purchases
- A deposit of funds into a bank account
- A check was written on paper
- Points-based shopping
- Gift certificates
- Donations to charities
If your card and loans are provided by the same lender, you may even be able to use your points toward the mortgage, auto loan, or school loan payments.
Hotels vs. all other types of travel
It's vital to distinguish between hotel credit cards, which are provided in cooperation with major hotel brands' loyalty programs, and generic travel rewards cards issued by banks when comparing point redemption values. Based on Investopedia's findings, the tables below illustrate the point values for some of the main card issuers.
Average Hotel Point Value
| Hotel Loyalty Program | Value Per Point (Cents) | Value of 50,000 Points |
| Hyatt (World of Hyatt) | 1.88 | $940 |
| Marriott (Marriott Bonvoy) | 1.05 | $525 |
| Wyndham (Wyndham Rewards) | 0.98 | $490 |
| IHG (IHG Rewards Club) | 0.74 | $370 |
| Best Western (Best Western Rewards) | 0.67 | $335 |
| Hilton (Hilton Honors) | 0.48 | $240 |
| Radisson (Radisson Rewards) | 0.42 | $210 |
Points in Bank Reward Programs Have an Average Value
| Bank Credit Card Rewards Program | Value Per Point (Cents) | Value of 50,000 Points |
| Ultimate Rewards (Chase Sapphire Reserve Card) | 1.44 | $720 |
| Ultimate Rewards (Chase Sapphire Preferred Card) | 1.40 | $700 |
| Citi ThankYou Rewards (Citi Premier/Prestige Cards) | 1.21 | $605 |
| American Express Membership Rewards (all Amex consumer and business charge cards) | 1.11 | $555 |
| Capital One Venture Rewards (Capital One Venture/Venture One) | 1.02 | $510 |
Credit Card Mileage Earning
Travelers who wish to utilize their rewards to pay for airfare may find earning miles with a rewards card appealing. Miles are frequently linked with co-branded rewards cards issued by airlines, however, there are also travel rewards choices that allow you to earn miles without booking a specific carrier.
Your usual spending patterns and preferred mode of travel will determine whether it makes sense to select a card that is co-branded with a certain airline or one that rewards miles on every transaction. If you mainly fly Delta, for example, it could make sense to have a travel rewards card that gives you more points for booking Delta flights.
- If you're not committed to any single airline, a card that gives limitless double miles on purchases could be a better option.
Rewards cards with miles, like travel cards with points, may feature initial welcome bonuses, anniversary incentives, or referral benefits. Each of them presents the chance to add more miles to your account than you would normally get from using your card to make purchases.
Check to discover if there are any redemption ban dates or other restrictions if you're thinking about getting a co-branded airline card.
How Much Are Travel Miles Worth?
In general, airline miles are worth one cent apiece. However, the real worth of your miles might vary depending on which card you have and how you redeem them. The most common redemption is usually for airline tickets, however, you may also be able to use your miles to buy:
- Hotels
- Automobile rentals
- Other travel costs (such as cruise, vacation, or resort packages)
- Cash
- Gift certificates
- Shopping
Transferring your miles to different airlines, hotel partners, or rail partners may also be an option. It's crucial to remember, however, that your miles may not transfer 1:1. This implies that transferring your awards from one travel loyalty program to another may result in a loss of mile value.
According to Investopedia's estimations, below is the worth of miles at various major airlines:
Average Value for Domestic Flights in Airlines Miles
| Airline Loyalty Program | Value Per Mile (Cents) | Value of 50,000 Miles |
| American Airlines (AAdvantage) | 2.04 | $1,020 |
| United Airlines (MileagePlus) | 1.98 | $990 |
| Southwest (Rapid Rewards) | 1.50 | $750 |
| Delta (SkyMiles) | 1.44 | $720 |
| JetBlue (TrueBlue) | 1.42 | $710 |
| Hawaiian Airlines (HawaiianMiles) | 1.26 | $630 |
| Alaska Airlines (Mileage Plan) | 0.85 | $425 |
| Spirit Airlines (Free Spirit) | 0.76 | $380 |
| Frontier (Frontier Miles) | 0.62 | $310 |
Points or Miles: Which Is Better?
In terms of redemption value, miles typically outperform points. Hotel rewards tend to be more valuable than general travel rewards cards when it comes to points. So there is a type of hierarchy to be mindful of when deciding which reward choice is most desirable.
However, whether points or miles are better for you will depend on your travel plans. If you pay off your whole debt each month or carry a balance, as well as whether the card levies an annual fee, can also have a role.
A hotel rewards card can be a better option than a card that gives miles toward flights, for instance, if you frequently travel by car and stop in hotels along the route. However, if you often fly for business or pleasure, miles cards may be more beneficial.
If you plan to travel overseas, look for a rewards card that does not impose foreign transaction fees.
Examining your purchasing history for the past six to twelve months will give you an estimate of how much you're likely to earn in rewards with each card. Based on the redemption numbers supplied below, you may then determine how much you'd earn back from those prizes.
Choosing a Travel Rewards Card
The first step is to decide if you like points or miles. The next step is to limit your possibilities for earning travel points. Considering the following factors might also be helpful when comparing rewards cards:
- Structure of the rewards scheme. Based on how you spend, consider whether a tiered rewards program or a flat-rate rewards program might be better for you.
- Bonus for signing up. If you're interested in a travel rewards card with a welcome bonus, compare the size of the incentive and the minimum spending criteria to what comparable cards offer.
- Options for redemption Some cards provide you more options for redeeming your points or miles than others. A program that allows you to transfer points or miles to other travel partners, for example, will provide you more freedom.
- Dates of expiration If your account has been inactive for a long, your points or miles may expire after a specific length of time with various cards and loyalty programs. They never die with others.
- Card advantages and characteristics Some travel cards can add value by providing amenities such as access to lounges, fee credits toward Global Entry or TSA PreCheck, or free checked luggage.
- Fees per year. Depending on how frequently you use your card and the incentives you may earn, paying an annual fee may or may not make sense for you. So think about how much you'd have to spend to earn the charge back in incentives each year.
- Fees for international transactions. If you plan to travel overseas, a credit card with no foreign transaction fees might help you save money.
- APR. If you anticipate carrying a balance on your card, keep the annual percentage rate in mind (APR). Also, if you're applying for a credit card with a low introductory rate, be sure you understand when the promotional period expires.
You are not required to use a single travel rewards card, of course. If you want to optimize your benefits, you may get a hotel card, an airline card, and a general-purpose bank card. If you have to pay various yearly fees, be sure you're receiving your money's worth.
Miles and points from credit cards FAQ:
What Exactly Is a Travel Mile?
When you use a credit card with travel rewards or book flights through a frequent flyer club, you can earn incentives called travel miles. Travel miles can be redeemed for flights and other travel expenditures, however, the redemption value varies by program.
How Much Do Travel Miles and Points Cost?
Travel miles and points are generally worth one penny apiece. However, the value of your miles or points might vary depending on the card you used to earn them and what you redeem them for. Depending on the card and how you use them, travel points and miles might be worth more than one penny apiece or less.
How Can I Make Use of Travel Points?
Depending on the possibilities your card offers, there are several ways to spend travel points. Travel points may frequently be used to pay for flights, hotels, rental cars, cruises, and holiday packages. Travel points may also be redeemed for cash, bill credits, shopping, gift cards, or charity donations.
How Should Credit Card Points Be Used?
The easiest strategy to redeem credit card points is to choose the redemption option that provides the most value (provided it is something you desire). For example, utilizing points for flights or hotels may provide greater value than redeeming them for cash. The lowest value redemptions for points or miles often come from gift cards and buying using points.
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