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Should I Get a Travel Credit Card That Earns Points, or One That Earns Miles?

June 20, 2019
Credit Cards
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If you’re new to the world of travel credit cards, a logical place to start is the difference between a card that earns “points” and one that earns “miles.” Understand that, and you’re on your way to finding the card that’s right for you.

Let’s start by defining our terms:

  • Miles. In general, if a card earns “miles,” it means it earns currency in an airline’s frequent-flyer program. You redeem those miles for free flights on that airline.
  • Points. In general, when a travel card earns “points,” you earn rewards in a non-airline loyalty program, such as that offered by a credit card issuer. You usually have more flexibility with points than with miles.

That said, some cards offer miles that are really points, while others offer points that have more in common with miles. We’ll cover that below.

» MORE: How to choose a travel credit card

Travel credit cards that earn miles

Cards that earn miles are usually “co-branded” with an airline. That means the card has the airline’s name on it. You earn frequent-flyer miles every time you use the card. For example:

  • With the United℠ Explorer Card, you earn 2 miles per dollar spent on eligible United purchases, at restaurants and on hotel stays, and 1 mile per dollar elsewhere.
  • With the Southwest Rapid Rewards® Premier Credit Card, you earn 2 points per dollar spent on Southwest purchases and with the airline’s hotel and car rental partners. All other spending earns 1 point per dollar.

It’s important to understand that a “mile” earned in an airline program (with a credit card or otherwise) isn’t the same thing as a mile flown through the air. “Mile” is just the word that frequent-flyer programs use to describe a unit of their rewards currency. The number of “miles” it takes to earn a free flight has little to do with the actual distance you want to go. Each airline has an awards chart that tells you how many miles you need to take a certain flight at a certain fare class.

Pros and cons

Pros: The miles you earn when you spend with an airline card come on top of those you earn when you fly that airline. If you’re loyal to a particular airline, you can pile up miles pretty quickly. Also, co-branded cards usually come with valuable perks such as free checked bags, preferred boarding, airport lounge access, in-flight discounts and more.

Cons: Miles lack flexibility. You’ll be locked into redeeming your rewards with just one airline, or at best a handful if that airline has partners or is a member of an alliance. Also, if the airline you’ve pledged your loyalty to devalues its frequent flyer currency, the rewards you’ve been racking up can lose a lot of their worth overnight.

» MORE: NerdWallet’s best airline credit cards

Travel credit cards that earn points

With travel credit cards that earn points — also known as “general travel” cards — you’re accumulating the rewards currency offered by a particular credit card issuer. You can use your points a number of ways, depending on the card and the issuer:

  • You can usually use them to book travel through the issuer, usually at a rate of 1 cent per point.
  • Some issuers let you redeem them for statement credit against travel purchases.
  • Some cards even offer the option of transferring points to participating frequent traveler programs.

Let’s use the Chase Sapphire Preferred® Card as an example. With this card, you earn 2 Chase Ultimate Rewards® points for every dollar you spend on restaurant dining and travel and 1 point for every dollar spent elsewhere. When you’re ready to redeem, you can use Chase’s online travel portal to book travel at a value of 1.25 cents per point.

You can also transfer your points to airline and hotel rewards programs at a 1:1 ratio. In the case of the Chase Sapphire Preferred® Card, these include United Airlines, Southwest Airlines, British Airways, Marriott, Hyatt and more.

Pros and cons

Pros: Because you’re not locked in to a single airline, you have a lot more choices when it comes time to book a trip. In many cases, transferring points to travel partners is the cheapest way to fly. But if you bump up against blackout dates or other restrictions, you’re still be able to use your points to book directly through the issuer with almost any airline or hotel chain you’d like. If your card allows you to redeem your points for statement credit, then you don’t even have to go through the issuer’s portal — just book travel however you want, then use your rewards to pay for it.

Cons: The drawback to using a travel credit card that earns points is that you won’t be getting the fringe benefits that usually come with miles cards. Consider the value of free checked bags. Since most airlines now charge $30 per bag, a couple could save $120 on a single round trip — more than enough to cover the fee on most airline cards.

» MORE: NerdWallet’s best general travel credit cards 

Points and miles in disguise

Miles that work like points

Several cards offer flexible points that aren’t tied to any airline — but they still refer to them as “miles.” For example:

All three of these cards allow you to use your miles to book travel through the issuer’s portal or redeem miles for statement credit, usually at a rate of a penny apiece. But since they aren’t frequent-flyer, currency these “miles” aren’t miles in the airline sense. They’re best thought of as points.

Points that work like miles

Co-branded hotel credit cards typically issue their rewards as points. For example, the Marriott Bonvoy Boundless™ Credit Card gives you 6 points per dollar spent at participating hotels in the Marriott group of brands and 2 points per dollar on all other spending. The IHG® Rewards Club Premier Credit Card gets you 25 total points per dollar spent at IHG hotels (including both points earned from the card and from the hotel stay itself), 2 points per dollar at gas stations, grocery stores, and restaurants, and 1 point per dollar elsewhere.

These points work a lot like airline miles — you can redeem them for free nights with the hotel chain. As with airline cards, hotel cards give you perks that you won’t get from a regular points card, but you also give up some flexibility.

Which type of travel credit card is right for you?

Which travel credit card is right for you boils down to how you travel and your patience for frequent-flyer programs. But in general:

Think about a miles credit card if:

  • You’re loyal to a particular airline.
  • You’re like the idea of trying to squeeze maximum value out of your rewards .
  • You value the “extras” that come with co-branded cards, such as free checked bags.
  • You have a flexible schedule; this will give you the ability to make the most of your miles.

Think about a points credit card if:

  • You’re not loyal to a particular airline.
  • You want maximum flexibility — including using rewards for something besides air travel.
  • You want to be able to book travel your way.