Credit Card Miles: A Comprehensive Guide to Earning & Redeeming Rewards

Collecting frequent flyer miles is a profitable pastime for road warriors and occasional travelers alike – take a flight, earn airline miles and eventually collect enough to redeem for a free ticket.

But pro travel hackers know that the best way to earn miles is on the ground by taking advantage of a rewards card that awards miles upon sign-up and again with every purchase.

What are credit card miles?

Credit card miles – the same thing as credit card points – are the currency of loyalty programs attached to certain travel rewards credit cards.

With these rewards credit cards, you earn miles or reward points that you can later redeem for airfare, hotel stays, or other travel expenses.

Under most programs, you’ll earn miles or points for every dollar you spend as well as bonus miles (or bonus points) for spending in certain categories or spending a minimum amount of money within a certain period of time after opening a new account.

Credit card miles are different than airline-specific frequent flyer miles. Both, however, can be redeemed for free travel.

Credit card miles vs. frequent flyer miles

Generic credit card airline miles can be redeemed with almost any airline, hotel chain, or travel provider.

Airline-branded credit cards will award frequent flyer miles that are only good for travel on that specific airline.

For example, Delta SkyMiles American Express cards earn SkyMiles that can be redeemed for flights on Delta or partner airlines. There are other ways to redeem SkyMiles, but you’re limited to companies Delta has partnered with. You can think of cards like this as a loyalty program for your favorite airline.

In general, credit card miles give you a lot more flexibility when you go to redeem them but tend to have a fixed value-per-mile.

With frequent-flyer miles, you are subject to restrictions like individual airlines and black-out dates but you may be able to redeem the same number of miles for a more valuable reward, like an international business class ticket.

Credit card miles vs. cash back

With a travel credit card, you’re limited to redeeming points or miles on travel-related purchases, while other cards give you cash back that you can apply to any purchase on your statement, or even transfer to your bank account.

So, why would you choose credit card miles over cash back?

Cash back credit cards are simple and straightforward – earn cash and use it for anything. But miles credit cards can give you more for your money if you know how to use them.

How much is a credit card mile worth?

On average, one credit card mile is worth approximately one cent.

A penny per mile – that’s the benchmark. So, with most programs, if you have 10,000 miles, you have $100 in rewards.

It doesn’t matter if you’re earning miles, points or cash back, if you earn 1% on every purchase, you would need to spend $1,000 on your travel card to earn $10 in rewards.

Some inferior point-based rewards credit cards make you spend more points to get cash or a cash equivalent rewards (for example, a Visa gift card) than to get branded gift cards or merchandise, lessening the points’ value. No thanks.

What you want to look for are opportunities to redeem miles for more than one cent each. If you can redeem your miles at a rate of two cents per mile, that’s good. If you can redeem them at a rate of three cents or more per mile, you’re entering into serious travel hacking territory.

This is one of the reasons the Chase Sapphire Preferred® Card has been so popular among miles-cards enthusiasts. It offers a 25% redemption bonus if you redeem points for travel through Chase Ultimate rewards®, upping the value-per-mile to 1.25 cents (60,000 points becomes worth $750 when you redeem through Chase Ultimate Rewards^® instead of $600). But the Chase Sapphire Preferred® Card also lets you transfer points to certain frequent flyer and hotel programs 1:1. And that opens up a realm of possibilities.

Want to learn more about travel hacking? Read our piece: How To Start Travel Hacking.

How much is a frequent flyer mile worth?

While credit card miles are usually worth about a penny-per-mile, the value of frequent flyer miles is all over the map – it all depends on how you redeem them and the specific frequent flyer program that you are enrolled in.

The value of frequent flyer miles is a mixed bag. Can you snag an award ticket for 25,000 miles that’s worth $300 or more? Perhaps, although it’s not easy. If, however, you use miles to travel internationally – or, in first-class seats – credit card miles can actually be worth $0.05 or more apiece.

Frequent flyer miles are worth more per mile when redeemed for long-haul flights and business or first-class seats.

Hypothetical airline mile redemption values

If you simply redeem frequent flyer miles for a domestic ticket that normally would only cost a couple of hundred bucks, the results are terrible – you get less than a penny per mile! This is worse than if you just earned 1% cash back.

But look what happens when you cash in airline miles for a more expensive ticket. The value per mile goes up to a penny and a half or even three cents if you save them up for a trip across the Pacific in business class. (Depending on the route and schedule, these seats can sell for $10K or more).

When do airline credit cards make sense?

Despite the higher potential value-per-mile, unless you frequently and religiously fly one particular airline, credit card miles that can be used on any airline may be more valuable than airline-specific frequent flyer miles.

Airline-branded credit cards will award that airlines’ frequent flyer miles (for example, Delta SkyMiles American Express cards earn SkyMiles) whereas other travel reward credit cards will award credit card miles that can be redeemed for flights on any airline, hotel stays, and more.

If you fly frequently enough on one particular airline, then carrying that airline’s branded credit card may make sense. Most of the benefits of an airline credit card come not from the miles you earn, but from additional perks like:

• Free checked bags.
• Priority boarding.
• Reaching elite status faster.
• Global Entry/TSA precheck credits.

For example, I fly Delta just enough that carrying a Delta SkyMiles Amex gets me into their Gold Medallion level. That perk gets me priority customer service and – every now and then – a free first-class upgrade.

The best airline miles rewards credit cards

Unless you’re a frequent traveler chasing elite status, a travel rewards credit card that gives you miles good on any airline is probably your best bet. Which credit card company you should go with is dependent on the features that hold the most value for you.

There are several advantages to earning airline credit card miles:

• Airline Miles can be redeemed as a statement credit toward any travel purchase (tickets on any airline, hotels, rental cars, cruises, etc.
• There are no blackout dates or other restrictions.
• Unlike many frequent flyer miles programs, you don’t need to accumulate the miles needed for an entire flight – you can redeem in increments as low as $50 to defray your travel purchases.
• Most credit card miles do not expire as long as your account is open and in good standing. (Some frequent flyer miles will expire if you don’t take a flight on that airline every year.)

The good news is you have several great options -most of which offer generous sign-up bonuses worth up to $625 if you can spend a certain amount within a few months of signing up.

To find the card that is best for you, check out our piece: The Best Travel Rewards Credit Cards: Snag Up to $1,000 in Travel.

Summary

With a travel rewards credit card, you’ll earn credit card miles with every purchase, which you can redeem for any future travel purchases on that card. When redeemed as a statement credit, credit card miles are usually worth one cent per mile.

Frequent flyer miles that you earn when you fly – or by using an airline’s branded credit card – must be redeemed when you purchase an award ticket on that airline or its partners. You’re much more limited in how you can redeem frequent flyer miles, but they can be worth much more than a penny apiece if you’re strategic.

Read more:

• Best Rewards Credit Cards
• The Best Credit Cards for International Travel