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Credit card miles vs. airline miles: Which is better?
What are credit card miles?
Let’s get one thing straight at the beginning. The terms “miles” and “points” are effectively interchangeable in common parlance. Some credit cards call their proprietary rewards currency points, and others call them miles. For example:
- Chase calls its rewards “Ultimate Rewards® points”
- Capital One calls its rewards “Capital One miles”
Airlines do the same thing:
- American Airlines calls its rewards “AAdvantage® miles”
- JetBlue calls its rewards “TrueBlue points”
The word “miles” usually refers to airline frequent flyer rewards — while “points” usually refers to credit card rewards. But that’s far from a rule. In other words, don’t focus too heavily on the words “points” and “miles” when constructing your travel hacking strategy.
Read more: How to fly free with Chase Ultimate Rewards®
Credit card miles vs. frequent flyer miles
There are huge differences between credit card miles (bank-issued rewards) and frequent flyer miles (airline-issued rewards). Let’s take a look at a few key areas.
Credit card miles (again, more commonly referred to as points, just FYI) are rewards that are given to you by your credit card issuer. You won’t earn them by flying on an airplane. You’ll only earn them via credit card welcome bonuses, using your card for making purchases, or any anniversary bonuses you get each year.
Cards that earn these types of points are not co-branded with an airline. For instance, the Chase Sapphire Preferred® Card earns Chase Ultimate Rewards® points.
Airline miles are rewards you’ll get for flying on an airplane. You can also earn them via credit card spending if you’ve got a co-branded airline credit card.
Airline credit cards award frequent flyer miles of the airline stamped on the front of your card. For example, If you hold a Chase United Airlines card, you’ll earn United Airlines miles — not Chase points.
Redeemable airline miles can generally be used for one thing: flights. There are some exceptions (various airlines allow you to use mileage to reserve hotels and rental cars through a proprietary online portal, or even purchase airport lounge access and merchandise) — but you’ll get an extremely poor value per mile.
Most notably, you can’t cash out airline miles, and you can’t use them to receive a statement credit on your card balance.
All this to say, airline miles should be used exclusively for award seats on a plane.
The bank miles (or points) you earn from a credit card, on the other hand, can be used for lots of things — not just flights. For example, Capital One miles can be:
- Cashed out at 1 cent each
- Transferred to many airlines for nearly free flights, such as Air Canada Aeroplan, British Airways, etc.
- Transferred to hotel programs for free hotel stays, such as Wyndham and Choice
- Used to “buy” travel at a rate of 1 cent per mile
Other less flexible bank points can still be used for more things than airline miles. As an example, U.S. Bank Altitude points can’t be transferred to airline partners, but they can be:
- Cashed out at a rate of 1 cent each
- Redeemed for travel through the U.S. Bank Travel Portal for up to 1.5 cents each
- Used to buy merchandise at a rate of 1 cent each
All this to say, credit card miles are far more flexible than airline miles. Credit card miles are the superior earning choice, particularly if you aren’t married to a specific airline.
It’s also worth mentioning another kind of airline currency, generally referred to as elite qualifying miles/points. These are not redeemable for free flights. Instead, you earn them (usually simultaneously with redeemable miles) for the purpose of achieving elite status.
For example, if you have no American Airlines elite status, you’ll earn 5 Loyalty Points per dollar you spend with AA. You’ll earn AAdvantage® Gold elite status after you earn 30,000 Loyalty Points — so you’ll have to spend $6,000 with AA to earn Gold status.
Airlines often will let you earn status miles by making purchases with their credit card, through dining programs, via online shopping portals, etc.
Credit card miles vs. cash back
Cash back is the ultimate reward currency because it’s completely flexible. You can book flights and hotels with it, you can pay for meals with it during your travels — or you can pay rent with it if you’re not currently traveling.
But if travel is your aim, credit cards that earn travel rewards are superior to cash back credit cards. Here’s why:
- Cash back can be redeemed at a fixed rate. Every cent you earn is worth… 1 cent.
- Travel rewards are worth varying amounts, depending on how you use them. You can get significantly more than a rate of 1 cent per mile. You can also redeem them for a statement credit, making them as good as cash.
It’s absolutely silly how much value you can receive from credit card miles. However, you’ve got to know a bit about the travel rewards world to get such a good value.
An alluring aspect of cash back credit cards is how easy they are to use. If you’re not willing to dive into the awards travel game, cash back probably suits you better.
Read more: Best cash back credit cards
How much is a credit card mile worth?
This is a question I get a lot. There’s no blanket answer, however.
The value you’ll get depends entirely on how you use your miles. Just to give some examples, here are a few ways I’ve redeemed credit card miles in the past, and the value I’ve received:
- Fancy lie-flat business class seat to South America by transferring Amex Membership Rewards® points to Delta: 16 cents per point
- Suite at the 5-star Andaz Maui by transferring Chase Ultimate Rewards® points to Hyatt: 4 cents per point
- Domestic short-haul economy flight booked through the Chase Travel Portal: 1.25 cents per point
- Five-night stay at the Waldorf Astoria Maldives by transferring Amex Membership Rewards® points to Hilton: 3.8 cents per point
Because the redemption values are so vast (as you can see), calculating the average value of a credit card mile is sort of a waste of time.
However, a good rule of thumb is to strive to redeem them for at least more than 1 cent each. If you aren’t routinely achieving that goal, you’re better off collecting cash back instead. You’re always absolutely certain to receive 1 cent per cent!
How much is a frequent flyer mile worth?
Similar to credit card miles, the value of your airline miles depends on how you redeem them. You’ll generally get the best value for your miles by booking international business or first-class seats. Some of these fares cost more than $10,000 in cash.
Here are a couple of examples to illustrate the point:
- You can fly round-trip in first class from the west coast to Japan on ANA (a major airline of Japan) for as little as 110,000 Virgin Atlantic points. That same ticket costs over $15,000 in cash — giving you a value of more than 13 cents per point.
- You can fly between Chicago and Dallas on Delta for 10,000 points. The same ticket costs around $180 — giving you a value of 1.8 cents per point.
Now let’s talk about some exceptions to the rule. Southwest and JetBlue price their award seats by the cash price of the ticket. If prices are high, the points price will be high. You can generally expect to receive a value of 1.5 cents per Southwest point and 1.4 cents per JetBlue point.
Airline credit cards vs. travel credit cards
We’ve already established that travel credit card miles are more flexible and useful than the miles you’ll earn from an airline credit card. So let’s go beyond credit card rewards for a second.
The best travel credit cards usually offer more useful travel benefits than an airline credit card.
For example, you’ll often find trip delay insurance, baggage delay insurance, primary rental car insurance, and much more on a non-airline travel credit card, such as the Chase Sapphire Preferred® Card.
Read more: Best credit cards for travel insurance
But with an airline card, you’ll often receive airline-specific travel benefits, such as primary boarding, free checked bags, and even airport lounge access. Some airline cards also offer travel protections such as trip delay insurance, but it’s rare.
If you’re not loyal to a specific airline, it’s better to carry a generic travel credit card instead of an airline credit card.
Read more: Best travel rewards credit cards
The best airline credit cards
However, if you are loyal to a specific carrier (namely, United, Delta, or American Airlines), you may want to consider adding one of these airline credit cards to your wallet.
For United flyers: UnitedSM Explorer Card
The UnitedSM Explorer Card is one of the most balanced travel credit cards in existence. It’s got excellent United-focused perks, as well as benefits that will improve your airport experience.
First, the card currently offers a welcome bonus of 50,000 bonus United miles after spending $3,000 on purchases within the first three months from account opening. That’s more than enough for a round-trip flight to Hawaii or the Caribbean.
Here are the ongoing perks you should know about:
- Free first checked bag for you and one companion when traveling on United (you must also use the card to pay for the cash portion of your fare)
- Priority boarding
- Global Entry, TSA PreCheck®, or NEXUS application fee credit (worth up to $100)
- Increased award seat availability
- Two single-use United Club airport lounge day passes
This card also has excellent travel insurance very similar to the Chase Sapphire Preferred®. You’ll get trip delay insurance, baggage delay insurance, primary rental car insurance, and more.
The card comes with a $95 annual fee, waived the first year. That means it’s free to open and try for a year before you’ve got to invest any money into keeping it. If you find that it doesn’t fit your lifestyle, you can cancel it with no harm done.
For Delta flyers: Delta SkyMiles® Platinum American Express Card
The Amex Delta SkyMiles® Platinum is a mid-tier airline credit card and charges a $250 annual fee. For that price, you’ll receive benefits like:
- Free first checked bag for you and up to eight other passengers on your reservation
- Priority boarding
- Global Entry or TSA PreCheck application fee credit (worth up to $100)
- Discounted Delta Sky Club airport lounge access
- 10,000 Medallion Qualifying Miles (which you need to achieve Delta elite status) after spending $25,000 on purchases in a calendar year (up to two times)
- Annual Delta companion certificate
That last bullet is an important one. With Delta’s companion certificate, you can buy a round-trip domestic coach flight within the lower 48 states and receive another ticket for just the cost of taxes and fees (often $5.60 one-way). This can save you and a travel buddy many hundreds of dollars each year — easily justifying the card’s annual fee.
This card also comes with a limited-time increased bonus of 80,000 Delta miles after spending $4,000 on purchases within the first six months from account opening. For that amount of points, you should have no problem booking a round-trip coach flight to Europe for nearly free. (Offer ends 11/09/2022)
For American Airlines flyers: Citi® AAdvantage® Executive World Elite Mastercard®
The Citi® AAdvantage® Executive is a premium airline credit card with the potential to save you thousands of dollars each year. It comes with a modest bonus: 50,000 American Airlines miles after spending $5,000 on purchases within the first three months from account opening. During off-peak travel dates, you can fly round-trip to Europe for that — or book two round-trip flights to the Caribbean.
Where this card really shines are its American Airlines-focused benefits:
- Free first checked bag for you and up to eight travelers on your reservation
- Priority check-in and boarding
- 10,000 Loyalty Points (which you need to achieve American Airlines elite status) after spending $40,000 per qualifying status year)
- Global Entry or TSA PreCheck application fee credit (worth up to $100)
- American Airlines Admirals Club airport lounge membership with guest privileges (worth $650 per year)
The star of the show here is the Admirals Club membership. American Airlines has some excellent lounges sprinkled throughout the country. But here’s a super valuable hack: you can add up to 10 authorized users for free — and each authorized user gets their own Admirals Club lounge membership. In other words, you could gift up to 10 Admirals Club memberships (each worth $650) to friends and family for zero dollars. Each authorized user can also bring up to two guests or immediate family.
This card charges a $450 annual fee. Not bad for all the potential value you can squeeze from it.
One final note on this card, and all Citi credit cards, for that matter. You’ll find no travel insurance whatsoever. If you can help it, you should never book travel with a Citi credit card.Card info has been collected by MoneyUnder30 to help consumers better compare cards. The financial institution did not provide or approve card details.
The bottom line
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. In many cases, you can also transfer those miles to airline and hotel partners for huge value. You can also cash them out if you have no desire to travel.
Frequent flyer miles that you earn when you fly — or by using an airline’s branded credit card — are much more limiting. While some airlines allow you to book hotels and rental cars with your miles, the value is offensively low. The only reasonable way to redeem them is for award flights.
Both credit card miles and airline miles can net you humongous value if you know what you’re doing. If you desire (nearly) free travel, we recommend that you collect travel credit card rewards. You can transfer them to a variety of airlines, so you’re not pigeonholed into booking with one specific airline.
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