Cashback vs Points vs Miles: Credit Card Rewards Compared

September 21, 2021

Credit card rewards can be quite rewarding, for lack of a better term. They can also be thoroughly confusing! With so many different cards, each offering different reward structures and redemption options, it can be a maze to navigate for newcomers. There are typically three types of rewards programs: cashback, points, and airline miles/hotel points. This guide will compare cashback vs points vs miles to help you determine which is the right type of rewards for you.

cashback vs points vs miles

Table of Contents

Cashback vs Points vs Miles Compared

To understand if cashback or miles are the superior option, let’s first learn about each of these reward structures.

Cashback

Best for: Simplicity. Those who prefer cash over travel rewards and don’t want a complicated rewards structure.
Typical rewards rate: 1% to 2% cashback on every purchase
Best cards: The best no-annual fee cards for everyday spend

Cashback is the simplest form of credit card rewards, and the most common. Using a cashback rewards credit card can save you money on every purchase you make.

The simplest and easiest to redeem – who doesn’t like cash?
Typical cards earn 1-2% cashback on all purchases
Cashback can be redeemed as a statement credit, which lowers the amount you need to pay
You can also transfer cashback to your bank account
In some cases, cashback can also be redeemed for gift cards and similar rewards

Points

Best for: Flexibility. Those who want to have multiple solid uses for their rewards points.
Typical rewards rate: 1 to 3 points per $1 spent.
Best cards: Best AMEX credit cards, best Chase credit cards, best Citi credit cards

Points are usually offered by specific banks for their credit card customers. Examples include American Express Membership Rewards, Chase Ultimate Rewards and Citi ThankYou points. These points can typically be redeemed for travel, gift cards, cashback and more, offering significant flexibility.

Offers the most redemption options of any type of rewards
Cards usually earn 1 to 3 points per dollar spent, although it varies on the program
Points can be redeemed for travel, gift cards, gifts, cashback, or transferred to airline partners
Redemption options vary significantly based on the program
Redemptions for cashback are usually possible, but typically don’t offer the best value

Airline Miles & Hotel Points

Best for: Travelers with specific plans. Those who like to fly on specific airlines, or stay in specific hotel chains
Typically rewards rate: 1 mile per $1 spent is standard. Hotel points vary more in value, so 1 to 10+ points per $1 spent
Best cards: Best 10 Personal Credit Cards, best AMEX credit cards, best Chase credit cards, best Citi credit cards

Most airlines and hotel chains have partnerships with banks to offer their customers co-branded credit cards. So, you might get a United Airlines credit card that’s issued by Chase. These cards earn miles/points that are specific to a certain program. This means they’re not nearly as flexible as standard points or cashback cards, but they still offer significant value. They’re also great for people who are loyal to a certain airline or hotel chain.

Offers redemptions only with certain airlines or hotel chains
Sometimes transfers to other travel programs are possible, but usually at poor rates
Each program is different, although most airline program cards earn 1 mile per $1 spent on standard purchases.
Redemption options vary significantly depending on the program
It can be more complicated and confusing to redeem miles & hotel points, but worthwhile in many cases

Cash Back vs Miles vs Points: Which is the Best Option?

The simple answer is that there is no “best” option. It truly depends on your goals.

Generally speaking, flexible points currencies like Ultimate Rewards and AMEX Membership Rewards are the most versatile, which to many makes them more versatile.

However, cashback cards offer a no-frills, super-simple approach, and those who don’t travel much might get better value out of straight cashback.

Finally, we have airline and hotel programs. These can be very useful, but it depends on your travel goals and preferences. If you live near a Delta hub and fly Delta often, then chances are the Delta card from American Express is a great choice for you. But if you get a card from a program you don’t use much, it might not be as useful.

Also, airline programs are typically more difficult to navigate than most other rewards programs. While in many cases they can offer the most value for your points, it can be confusing to redeem your points – and you may struggle to find award tickets for your specific travel dates.

In short – consider your goals, THEN consider which kind of rewards program makes the most sense. Also consider how much time you want to put into understanding the rewards program and redemption options. If you’re looking for simplicity, cashback is the way to go.

Resources & Further Reading

FAQ

How do I activate my USAA credit card?

Here's how to activate a USAA credit card:Online Activation: Log into your USAA online account and select the “Activate Card” link.Activate by Phone: To activate your USAA credit card by phone, call customer service at 201-531-8722.

How can I activate my credit card?

Some banks ask cardholders to activate their credit cards by logging into their net banking system and activating the cards. Some other banks require cardholders to visit an ATM and swipe the card to get it activated. To get a card activated, you must know the personal identification number or (PIN).

How long does it take to get a USAA credit card in the mail?

When will I get my new USAA credit or debit card in the mail? It typically takes 7 to 10 business days to get your new card in the mail after we've mailed it.

How do I know if my credit card is activated?

Call Customer Service The simplest way to clear up any question about whether your credit card is still active is to call the issuer and ask. Call the number on the back of your card to inquire about the status of your account. If inactive, customer service can likely reactivate.

How can I activate my debit card?

Many banks will allow you to activate your card online. Go to the bank's website, sign in, and click on the “Customer Service” tab. Then, find the option for debit card activation and follow the prompts. Visit your bank to get your card activated in person.

What number do you call to activate a debit card?

If you don't use Online Banking or Mobile Banking, you can activate your debit card after your PIN arrives by doing one of the following:Make a deposit or withdrawal at any U.S. Bank ATM.Call us toll free at 800.236.3838.Bring your debit card to any U.S. Bank branch, and ask a banker to activate it for you.

How long does it take to get your USAA debit card?

When will I get my new USAA credit or debit card in the mail? It typically takes 7 to 10 business days to get your new card in the mail after we've mailed it.

What is my USAA debit card number?

It's the 5 — 12 digit number listed on your blue USAA card. If you don't have this card, the member number for the primary insured of the household appears on the auto ID card as the first 8-12 digits of your policy number. If you're unable to find your card, please call us at 800-531-USAA (8722).

How do I activate my USAA debit card?

To activate your USAA Debit Card By Phone Call the USAA Debit Card Number 210-531-8722. Before your card arrives you are not able to do any purchases with the Debit Card for payment you need a physical card. If you received your card then now you need to activate your USAA Debit Card first.

What number do you call to activate a debit card?

How can I activate my debit card?

How long does it take to get USAA debit card in mail?

It typically takes 7 to 10 business days to get your new card in the mail after we've mailed it.

How do I activate my USAA debit card?