Miles vs. Cash Back Rewards Credit Cards

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Miles and cash back credit cards are two of the best types of credit cards on the market. And the miles vs. cash back rewards battle isn't an easy one to settle. Cashback is the most versatile of all rewards, giving you more flexibility for using your rewards. For those who spend a lot on travel, earning miles helps with free flights, hotel stays, and other perks. Whether you choose a cash back credit card or a travel rewards credit card boils down to your spending habits and how you want to spend your rewards.

What’s the Deal With Cash Back Credit Cards?

Cashback rewards credit cards pay a certain percentage of cash back on all your purchases. For example, you might earn 2% cash back on all your credit card purchases, meaning you earn $2 in cash back rewards for every $100 you spend on your credit.

Many cash back credit cards have a tiered reward system, where you earn a higher amount of rewards in certain categories and a base amount of rewards on all other purchases. If you tend to spend a lot of money on those higher earning categories, you can maximize the rewards you earn.

Cash back doesn’t always mean cash back. While some credit cards will reward your cash back as a deposit to your bank account or mail a check to you, most cash back credit cards let you redeem your rewards as a statement credit. The statement credit reduces your outstanding balance by the amount of the rewards you redeem. For example, if you have a $100 balance and redeem your rewards for a $20 statement credit, your outstanding balance will be $80 once the statement credit is applied.


Most credit cards don't allow you to substitute a statement credit for payment to your account. You'll still have to make your regular minimum payment if one is due.

When Is a Travel Credit Card Worth It?

For those who travel often, a travel rewards credit card may be the better option since they tend to pay higher rewards on travel purchases made on the credit card.

If you travel outside the country, a travel rewards credit card may be a better option, particularly if you choose a credit that doesn’t charge a foreign transaction fee. Other credit cards charge up to 5% on transactions you make in currencies other than U.S. dollars. Even flights purchased through non-U.S. airlines may be made in another currency and charged a foreign transaction fee. Using a travel rewards credit card not only lets you save on currency fees, but also gives you an opportunity to earn more rewards.

Travel credit cards offer large sign-up bonuses in the first year that make the card more valuable than a cash back credit card. As you hold on to a credit card longer, you have to spend more on it to justify keeping it.


In year two and beyond, you’ll have to spend more to get the most out of your credit card, especially if it has an annual fee.

Travel rewards credit cards can offer other perks, outside the rewards, that make the credit card more beneficial. Free checked bags, annual travel credit, companion tickets, priority boarding, access to airport lounges, and trip cancellation insurance are often offered on travel rewards credit cards. And, people traveling with you can also enjoy these perks too, typically as long as you’ve booked their trip on your credit card.

Which Is Best?

Comparing miles and cash back rewards can be difficult. A dollar is a dollar, no matter which cash back credit card you have. The number of miles required for a redemption varies by credit card or frequent flier program.

Most cash back credit cards are fairly simple. Even those with a tiered rewards system can be easier to benefit from compared to many travel rewards credit cards. Getting the most from a travel rewards credit cards also requires you to really know the details of your rewards program. You’ll have to know the best way to maximize your rewards, how to take advantage of the other credit card perks, but also the ins and outs of redeeming rewards, including blackout dates and booking instructions.

If you're a big traveler, you'll find a lot of value in a travel rewards credit card. Otherwise, most other consumers will benefit from the versatility of a cash rewards credit card.

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