By now, you likely already know that having the right credit card, or even cards, can be a valuable asset in your overall financial strategy. In addition to perks that can help you save money on everyday expenses or other things you often spend on, travel rewards credit cards can get you points or miles in exchange for your spending.
And with those points and miles, you can book free travel, paying only taxes and fees.
Today, we’re going to walk you through exactly what points and miles are, how they work, how to earn them, and even the credit cards that earn them. Let’s get right to it.
What Are Points and Miles
Both points and miles are a type of currency; both are issued by credit card companies, airlines, and hotels.
As a rule of thumb, most credit card issuers and hotels use “points,” while most airlines use “miles,” although there are some exceptions. There’s no difference between a point or a mile other than semantics; it’s not necessarily better to earn points versus miles. As for the value of a given point or mile, it is not fixed, and can change with time and other factors.
There are many competing issuers of points and miles, both in the U.S. and abroad.
Here are the common credit card currencies you should know about:
- American Express Membership Rewards Points
- Chase Ultimate Rewards Points
- Bank of America Premium Rewards points
- Capital One miles
- Citi ThankYou Rewards
Here are some common airline miles:
- Delta SkyMiles
- United MileagePlus miles
- American Airlines AAdvantage miles
- Southwest Rapid Rewards points
- JetBlue True Blue points
- Alaska Airlines Mileage Plan miles
And lastly, here are some common hotel points currencies:
- Marriott Bonvoy points
- Hilton Honors points
- IHG Rewards Club points
- World of Hyatt points
- Wyndham Rewards points
Note that railway company Amtrak also issues its own points, called Amtrak Guest Rewards, which can be earned and spent like airline miles.
How Do Points and Miles Work?
As mentioned, you’ll earn points or miles every time you spend money on a travel rewards credit card, such as the Chase Sapphire Preferred® Card; flying on an airline that has a rewards program, such as Delta or American; or staying in a major hotel with a connected loyalty program such as Marriott or Hilton.
You can also earn points or miles when purchasing items through an airline’s shopping portal or dining program, and you can even earn through some car rental companies.
All those different ways to earn points and miles may seem confusing — but they don’t have to be.
“Staying organized and walking, not running, into points and miles is key for every beginner,”
says Richard Kerr, Director of Travel Rewards at Bilt, a rewards program that earns points on rent.
You don’t need to apply for a handful of credit cards and sign up for every loyalty program out there from the beginning. What’s important is to choose the credit card, hotel chain or airline that most closely matches your spending and travel habits.
How to Earn Points and Miles
There are several ways to earn points and miles that you can redeem for travel.
Earning via Credit Card Spending
A credit card that earns points (or more rarely miles) will get you a certain amount of them on every purchase you make.
In addition to the points or miles you will earn through your regular spending on the card, you can also earn a sign-up bonus or welcome offer. That’s just a way of saying that if you spend a certain amount of money on the card in a set amount of time, you’ll earn a lump sum of points or miles as a bonus. Many cards also offer elevated reward rates in some spending categories, such as dining or airfare, meaning you will earn more than a point for every dollar spent.
For example, the American Express® Gold Card earns 4 points per dollar on restaurants and purchases at U.S. supermarkets (up to $25,000 per calendar year, then 1 point per dollar), and 3 points per dollar on airfare booked on amextravel.com or directly with airlines (see rates & fees).
Earning via Flying or Hotel Stays
You can also earn points or miles every time you fly on an airline or stay with a major hotel chain. To do so, you must sign up first for the airline or hotel’s free loyalty program. Then, enter your member number every time you book with that airline or hotel chain, and points and miles will be added to your account automatically.
Earning via Shopping Portals and Dining Programs
Many airlines also have shopping portals where you can earn bonus points on your purchases. Airlines partner with major retailers, such as Bloomingdale’s, Saks Fifth Avenue, Macy’s, Nike, and plenty more. When you click through to a retailer via one of the portals instead of going directly to a merchant’s site, you’ll earn miles for that airline. You’ll need to create a free account for your desired airline’s shopping portal and link it to your loyalty program number, and your earnings will be added automatically to your account.
In a similar vein, airlines also offer dining programs where you can earn bonus miles on your dining purchases. The airlines partner with local restaurants, and when you use your registered card to dine there, you can earn miles for that airline on your purchase. Better yet, if that credit card earns bonus points on dining, you can “double dip” and earn two types of currencies at once: the airline’s miles, and the credit card issuer’s own points.
Chase Sapphire Preferred® Card
- Intro bonus:60,000 points
- Annual fee:$95
- Regular APR:15.99%-22.99% Variable
- Recommended credit:670-850 (Good to Excellent)
- Apply Now At Chase’s secure site
Chase Sapphire Reserve®
- Intro bonus:50,000 points
- Annual fee:$550
- Regular APR:16.99%-23.99% Variable
- Recommended credit:740-850 (Excellent)
- Apply Now At Chase’s secure site
What Are Points and Miles Worth?
Typically, points and miles from a credit card issuer — such as Amex Membership Rewards or Chase Ultimate Rewards — will be worth more than points or miles issued by an airline or hotel. That’s because they’re known as “flexible rewards,” meaning that you can either redeem them directly through the credit card issuer’s travel portal for a fixed rate, or by transferring them to airlines or hotels. The latter option also tends to get outsized value out of them.
That said, points and miles do not have a fixed value. Aside from any subjective considerations related to how much traveling is worth to someone, the value of a point is determined directly by how much something you can buy with points would cost in cash. As the latter price fluctuates, so does the value of a point (or mile.)
According to our current calculations, United Airlines MilagePlus miles are worth 1.6 cents each; American Airlines AAdvantage miles are worth 1.4 cents each; Delta SkyMiles are worth 1.2 cents each; and Southwest Rapid Rewards points are worth 1.3 cents each.
Cards That Offer Points or Miles
There are many travel rewards credit cards on the market, and we know it can be hard to narrow it down to just one. The key here is to find one that closely matches your spending habits, budget and travel goals.
With any card, it’s also fundamental to never spend more than you can afford or would have spent if you were using a debit card or cash. It’s also important to pay your credit card bills on time and in full every month. Most travel rewards credit cards have relatively high APRs, and carrying a balance with such high interest can essentially negate the value of any points or miles you earn with your card.
Before applying for a card that earns points or miles, make sure you have budgeted for the spending that will get you the card’s welcome offer of bonus points.
And while credit cards used responsibly can boost your credit score, which lets you borrow money more cheaply for things like buying a car or a house, abusing them can do the opposite.
“There are real-world consequences to not maintaining your credit score and getting yourself in financial hot water,” Kerr says.
With that in mind, here are some of our favorite travel rewards credit cards, which can help you earn points or miles towards your next trip.
Chase Sapphire Preferred® Card
The Chase Sapphire Preferred Card is one of our top travel rewards credit cards, and our pick among cards with an annual fee below $100. For a $95 annual fee, it earns 2 points per dollar on dining and travel, and as of August 16, 2021, those earnings will soar to 3x on dining and 5x on travel purchased through the Chase Ultimate Rewards portal. The card is currently offering a sign-up bonus of 60,000 points after you spend $4,000 in your first three months of card opening.
Chase Sapphire Reserve®
The higher-end sister card to the Chase Sapphire Preferred, the Chase Sapphire Reserve card carries a $550 annual fee and is geared towards frequent travelers. It earns 3 Ultimate rewards points per dollar on dining and travel, plus 1 point per dollar on everything else. You’ll even earn 10 points per dollar on Lyft rides.
As of August 16, 2021, it will also earn 10 points per dollar on dining (including takeout and delivery) purchased through the Chase Dining program, and on hotel stays and car rentals bought through the Ultimate Rewards portal. The card will also earn 5 points per dollar on airfare purchased through the portal.
You can also earn 50,000 bonus points if you spend $4,000 in the first three months from account opening.
The card comes with perks like a $300 travel credit every year, and up to a $100 credit for TSA PreCheck®/Global Entry every four years. You’ll receive a 12-month, complimentary DashPass membership (otherwise worth $9.99 per month) that must be activated by March 31, 2022.
American Express® Gold Card
The Amex Gold Card offers the best of both worlds when it comes to travel rewards — and while it has a $250 annual fee, the rewards can make the card pay for itself. It comes with perks like $120 in dining credits (up to $10 per month) with eligible partners including Shake Shack and Grubhub among others, up to $100 in hotel credits for qualifying activities when you book through the Hotel Collection, and up to $120 in Uber Cash ($10 per month) toward U.S. UberEats orders or Uber rides. The Gold Card needs to be added to the Uber app to receive the Uber Cash benefit. The card carries a $250 annual fee.
The card also earns 4x points at restaurants and at U.S. supermarkets (up to $25,000 in U.S. supermarket purchases per calendar year, then 1x), 3x points on flights booked directly with airlines or through Amextravel.com, and 1x points on other purchases. The card is offering a welcome bonus of 60,000 points after spending $4,000 on eligible purchases within the first six months of card membership.
Capital One Venture Rewards Credit Card
With the Capital One Venture, you can rack up extra miles to put towards future travel thanks to all of your purchases — it earns 2 miles per dollar on everything. You’ll also earn 60,000 bonus miles if you spend $3,000 on purchases in the first three months from account opening. The card carries a $95 annual fee.
Perks include up to a $100 credit towards Global Entry/TSA PreCheck fee, and no foreign transaction fees.
Citi Premier® Card
The Citi Premier offers a solid rewards rate across common categories, with 3x points at restaurants, supermarkets, gas stations, air travel and hotels; it earns 1x points on all other purchases. Its attraction lies in how easy it is to earn elevated points on a lot of your purchases, rather than in just some categories. You can also earn 60,000 bonus points after you spend $4,000 in the first three months. It carries a $95 annual fee.
For rates and fees of the American Express® Gold Card, click here.