Credit Card Points and Miles Values

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Credit Card Points and Miles Values

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 utilizing their rewards. What you should bear in mind is that the value of the points or miles you earn might vary dramatically across cards. The key is to choose one of the top rewards credit cards and then carefully use your benefits. Here’s what you should know.

Key Takeaways

  • Credit card miles and points redemption values might vary substantially across cards.
  • In general, points and miles are more valuable when used for travel than for cash, gift cards, or shopping.
  • Some co-branded airline and hotel loyalty cards have a higher redemption value than other types of travel rewards cards, but they may also restrict how you may utilize your points.
  • Some credit cards allow you to transfer points or miles to other travel partners, giving you additional flexibility in how you use your rewards.

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Earning Credit Card Points

Reward points may be a powerful inducement to use card instead of cash. According to an Ipsos research, 53% of Americans feel that collecting points and prizes helps them want to use their cards more often. 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 certain purchases receiving more points per dollar than others.

Cards may also provide the ability to earn extra points through initial welcome bonuses, anniversary incentives, and referral bonuses. Earning these points is usually contingent on satisfying specific criteria. For example, you may get 100,000 extra points if you charge $3,000 in purchases in the first three months.

Note

If you’ve previously received a bonus with the same card or another card from the same issuer, you may be barred from receiving a welcome bonus.

What Are Credit Card Points Worth?

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:

  • Travel
  • Statement credits
  • Paying off past purchases
  • A deposit of funds into a bank account
  • A paper check
  • Shopping with points
  • Gift cards
  • Charitable donations
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If your card and loans are provided by the same lender, you may even be able to use your points toward mortgage, auto loan, or school loan payments.

Hotel Cards vs. General Travel Cards

When comparing point redemption values, it’s vital to differentiate between hotel credit cards, which are provided in conjunction with the loyalty programs of major hotel chains, and generic travel rewards cards issued by banks. Based on Investopedia’s findings, the tables below illustrate the point values for some of the main card issuers.

Average Value of Hotel Points
Hotel Loyalty ProgramValue 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

Earning Credit Card Miles

Earning miles with a rewards card may appeal to passengers who wish to redeem their points for airline tickets. Miles are often linked with co-branded rewards cards issued by airlines, however there are also travel rewards choices that enable you to earn miles without booking a particular carrier.

Whether it makes sense to pick a card co-branded with a certain airline or one that rewards miles on every transaction is determined by your regular spending patterns and travel preferences. 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. These are various ways to boost your mile balance above and beyond what you earn just by charging items to your card.

Tip

If you’re thinking about getting a co-branded airline credit card, be sure there are no blackout periods or other limits on redeeming trip miles.

What 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 option is airline tickets, however you may also be able to redeem miles for:

  • Hotels
  • Rental cars
  • Other travel costs (such as cruise, vacation, or resort packages)
  • Cash
  • Gift cards
  • Shopping

Your miles may also be transferable to other airlines, hotel partners, or train travel partners. 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.

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Here’s a glimpse at the worth of miles at various major airlines, as calculated by Investopedia:

Average Value of Airline Miles (Domestic Flights)
Airline Loyalty ProgramValue 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

Which Is Better: Points or Miles?

In terms of redemption value, miles often 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 rewards choice is most desirable.

That being stated, whether you should use points or miles depends on your trip intentions. It may also be determined by whether you pay your debt in full each month or carry a balance, as well as if the card has an annual fee.

For example, if you often take road trips and stop at hotels along the way, a hotel rewards card may be a better option than a card that gives miles toward flights. However, if you often travel for business or pleasure, miles cards may be more beneficial.

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.

Important

If you plan to travel overseas, look for a rewards card that does not impose foreign transaction fees.

How to Choose a Travel Rewards Card

The first step is to decide if you like points or miles. The next step is to limit down your possibilities for earning travel points. When comparing rewards cards, keep the following points in mind:

  • 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 amount 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 may add value by providing amenities such as access to lounges, fee credits toward Global Entry or TSA PreCheck, or free checked luggage.
  • Annual charges. Depending on how often 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 get 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.
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Of course, you are not limited to just one travel rewards card. 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.

Credit Card Points and Miles FAQ:

What Is a Travel Mile?

A travel mile is a kind of reward that may be earned by using a travel rewards credit card or booking flights via an airline’s frequent flyer program. Travel miles may be redeemed for flights and other travel expenditures, however the redemption value varies per program.

What Are Travel Miles and Points Worth?

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. Travel points and miles might be worth more than one cent apiece or less, depending on the card and how you use them.

How Can I Use Travel Points?

Travel points may be utilized in a variety of ways, depending on the possibilities provided by your credit card. Travel points may often 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 contributions.

What Is the Best Way to Use Credit Card Points?

The easiest strategy to redeem credit card points is to choose the redemption option that provides the greatest value (provided it is something you desire). For example, utilizing points for flights or hotels may provide more value than redeeming them for cash. Gift cards and point shopping often give the lowest total redemption value for points or miles.

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