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Cash back vs. points and miles credit cards

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Man looking at credit card and tablet at outdoor cafe
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Rewards credit cards come in many different forms, with some offering cash back and others offering points or miles. If you’re confused about which rewards currency is better, don’t fret. It’s actually a more common quandary than you think.

On the one hand, cash back rewards cards can offer ease of use and flexible redemption options, while travel rewards credit cards with points and miles allow you to redeem rewards towards a coveted dream vacation. In this sense, you can see that the type of rewards credit card and rewards structure that’s best for you will ultimately depend on your spending habits and preferences around earning and redeeming rewards.

This guide goes over the differences between earning cash back, points and miles, as well as some of the top options to consider in each category.

Cash back

In summary: Cash back is the better choice for simplicity-seekers hoping to earn flexible rewards on everyday purchases.

Cash back credit cards offer a percentage of cash back for each dollar you spend, with some cards offering a higher rate in some categories than in others. For example, some popular cash back credit cards offer a flat 1.5 percent cash back for every purchase you make, but others offer bonus rewards (up to 5 percent back) in fixed or rotating categories throughout the year.

Redemption flexibility

One major benefit of cash back credit cards is their flexibility when it comes time to redeem your rewards. Depending on the cash back card you sign up for, you may be able to redeem your rewards for a check in the mail or a statement credit to your account. Some cash back cards even let you cash in your rewards for gift cards, merchandise or travel rewards through their respective portal.

Pros and cons of cash back cards

Cash back credit cards tend to be a good value for consumers who rarely travel or don’t spend a lot on their credit cards each month. Here are some major advantages and disadvantages to consider when comparing them to points and miles credit cards.


  • Earning and redeeming rewards is not complicated.
  • Rewards value tends to be straightforward: A 2 percent cash back card yields $2 per $100 spent.
  • There are many no-annual-fee cash back cards to choose from.
  • Cash back credit cards may offer heftywelcome bonuses.


  • Most cash back credit cards don’t come with any notable travel benefits.
  • Cash back credit cards tend to offer inferior rewards value when compared to travel credit cards.
  • You may have limited redemption options—or no options other than statement credits—depending on the card you choose.

Cash back credit cards to consider

While any cash back credit card can help you rack up rewards on your spending, some cards can be more fruitful than others. Here are a few of the top cash back credit cards you should consider this year.

Wells Fargo Active Cash® Card: Best for 2 percent cash rewards

The Wells Fargo Active Cash Card lets cardholders earn a flat 2 percent cash rewards on purchases, which is the cream of the crop in terms of flat-rate cash back cards with no annual fee. This card also comes with a welcome bonus of $200 in bonus cash when you spend at least $1,000 on purchases during the first three months of opening your account.

Blue Cash Preferred® Card from American Express: Best for groceries

The Blue Cash Preferred lets cardholders earn 6 percent back on U.S. supermarket purchases (on up to $6,000 per year, then 1 percent) and on select U.S. streaming subscriptions. Cardholders also earn 3 percent back on transit and on U.S. gas station purchases, plus 1 percent on everything else. It does come with a $95 annual fee ($0 introductory annual fee for the first year), but you only have to spend $1,584 at U.S. supermarkets to recoup that cost—about $132 per month if you broke it down over the course of a year. Many people triple or quadruple that amount in grocery spending each month.

Chase Freedom Flex: Best for sign-up bonus

The Chase Freedom Flex doesn’t charge an annual fee, yet you can earn an initial cash bonus of $200 when you spend $500 on your card within three months of account opening. You’ll also earn 5 percent back on up to $1,500 spent in rotating quarterly bonus categories when you activate (then 1 percent), 5 percent on travel booked through Chase Ultimate Rewards, 5 percent on Lyft rides (through March 2022), 3 percent on dining and drugstore purchases and at least 1 percent other purchases. You can redeem your rewards for cash back, statement credits, gift cards, travel and more.

Points and miles

In summary: A points or miles card is the better choice for those who travel often or wish to start earning travel rewards.

Many different types of rewards credit cards fall under the umbrella of “points and miles” cards. For example, points and miles cards include airline credit cards that let you earn miles in a specific frequent flyer program, but they also include flexible rewards cards that let you redeem points for travel in more than one way.

Points and miles cards may also come with important travel benefits like airport lounge access, credits for Global Entry or TSA PreCheck membership or travel insurance—although cards with the most benefits tend to charge high annual fees.

Redemption flexibility

Some of the best travel credit cards on the market today offer a ton of flexibility when it comes to cashing in your rewards. If you have a travel credit card that earns Chase Ultimate Rewards points, for example, you can use your points for cash back, gift cards, statement credits, merchandise, travel through the Chase Ultimate Rewards portal or even 1:1 transfers to Chase airline and hotel partners.

Redemption value

Travel points tend to be worth more than cash back, and some of the best travel rewards currencies are worth up to 2 cents per point or more. However, your redemption value depends on how you redeem your rewards. If you cash in flexible points for a statement credit to your account, you may only get 1 cent per point in value or less. For travel redemptions, the value tends to be significantly higher.

Pros and cons of points and miles cards

The pros and cons of points and miles cards can vary depending on the specific card you use. However, some general rules of thumb can help guide you regarding the advantages and disadvantages of choosing a points and miles card over cash back.


  • Travel rewards provide more value than cash back if you travel often.
  • If you like fancy travel accommodations, travel rewards can help elevate you into business classes or upgraded hotel room options when redeemed strategically.
  • Many travel credit cards come with travel benefits like airport lounge access and travel insurance.
  • Travel credit cards have higher rewards rates and higher welcome bonuses.


  • Travel credit cards have higher annual fees than cash back credit cards.
  • Airline credit cards and hotel credit cards often have limited redemption options.

Point- and mile-earning credit cards to consider

If you’re thinking about getting a points-and-miles card, there are options to consider across the spectrum. Here are some top cards you may want to add to your list:

Chase Sapphire Preferred® Card: Best for frequent traveling and dining out

The Chase Sapphire Preferred® Card starts you off with 80,000 bonus points (worth $1,000 in travel when you redeem them through Chase Ultimate Rewards) when you spend $4,000 on your card within three months of account opening.

You’ll also earn new benefits such as a $50 annual Ultimate Rewards Hotel Credit, 5X points on travel purchased through Chase Ultimate Rewards, 3X points on dining and 2X points on all other travel purchases. Plus, you can earn 5X points on Lyft rides through March 2025.

A $95 annual fee applies for this card, and you can redeem your rewards for cash back, statement credits, merchandise, travel through the Chase travel portal or 1:1 transfers to Chase Ultimate Rewards airline and hotel partners.

Capital One Venture X Rewards Credit Card: Best for sign-up bonus and hotels

When you sign up for the Capital One Venture X Rewards Credit Card, you can earn 75,000 miles once you spend $4,000 on purchases within three months from account opening, equal to $750 in travel. You’ll also rack up 10X miles on hotels and rental cars booked through Capital One Travel and 5X miles on flights booked through Capital One Travel, along with 2X miles on all other purchases. You’ll get a fee credit for Global Entry or TSA PreCheck membership. A $395 annual fee applies, and you can redeem your rewards to cover travel purchases or transfer your miles to Capital One airline or hotel partners.

Citi Premier® Card: Best for dining out and groceries

The Citi Premier® Card starts you off with 60,000 points when you spend $4,000 on your card within three months of account opening. You will also earn 3X points on restaurant, supermarket, gas station, hotel and air travel purchases, plus 1X points on all other purchases. You can also earn $100 off a single hotel stay of $500 or more once a calendar year. A $95 annual fee applies, and you can redeem your rewards for statement credits, gift cards, payments to your student loans or a mortgage, travel through the Citi travel portal, transfers to Citi ThankYou airline partners and more.

Which type of rewards currency is best for you?

For the no-fuss cardholder

If you don’t travel much or care about using your rewards strategically towards lofty travel goals, you’re best suited for cash rewards. To make things easier, you may even opt for a flat-rate cash back card, so there’s no keeping up with rotating bonus categories or activating your rewards every so often. This move will benefit you due to the sheer simplicity of earning rewards. You’re still getting something back from your credit card use, even if you don’t get the most value for your rewards.

For the travel enthusiast

If you get a rush out of turning $500 worth of credit card rewards into $750 or $1,000 worth of travel, then you’re a perfect candidate for a card that offers points or miles. Specifically, you’d benefit from travel cards that give you plenty of options for boosted point or miles values and upgraded travel accommodations. If you travel often every year and want access to benefits that make air travel more comfortable, then a premier travel card may be an even better fit.

The bottom line

Hopefully, we’ve helped settle the debate between cash back versus points and miles for you. In essence, you need to know what kind cardholder you are and the rewards structure that most closely matches your spending profile. Keep in mind that it’s not uncommon for cardholders to pair a few different credit cards to maximize their rewards, so trying out different credit card combinations and rewards structures could also be an option.

Written by
Holly D. Johnson
Author, Award-Winning Writer
Holly Johnson writes expert content on personal finance, credit cards, loyalty and insurance topics. In addition to writing for Bankrate and, Johnson does ongoing work for clients that include CNN, Forbes Advisor, LendingTree, Time Magazine and more.
Edited by
Senior Editor, Credit Card Product News
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