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We are an independent, advertising-supported comparison service. Our goal is to help you make smarter financial decisions by providing you with interactive tools and financial calculators, publishing original and objective content, by enabling you to conduct research and compare information for free - so that you can make financial decisions with confidence.
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RgStudio / Getty Images August 11, 2022 Checkmark Bankrate logo How is this page expert verified? At Bankrate, we take the accuracy of our content seriously. "Expert verified" means that our Financial Review Board thoroughly evaluated the article for accuracy and clarity. The Review Board comprises a panel of financial experts whose objective is to ensure that our content is always objective and balanced. Their reviews hold us accountable for publishing high-quality and trustworthy content. Holly Johnson writes expert content on personal finance, credit cards, loyalty and insurance topics. In addition to writing for Bankrate and CreditCards.com, Johnson does ongoing work for clients that include CNN, Forbes Advisor, LendingTree, Time Magazine and more. Aja McClanahan is an author, blogger and speaker on personal finance and entrepreneurship. Aja is the author of "How a Mother Should Talk About Money with Her Daughter." Cathleen's stories on design, travel and business have appeared in dozens of publications including the Washington Post, Town & Country, Wall Street Journal, Marie Claire, Fodor’s Travel, Departures and The Writer. Claire Dickey is a product editor for Bankrate, and . Before joining Bankrate, Claire worked as a copywriter for brands within the telecommunications industry as well as a hybrid marketing and content writer. Bankrate logo The Bankrate promise
At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict editorial integrity, this post may contain references to products from our partners. Here's an explanation for how we make money. The content on this page is accurate as of the posting date; however, some of the offers mentioned may have expired. Terms apply to the offers listed on this page. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any card issuer. Bankrate logo The Bankrate promise
At Bankrate, we have a mission to demystify the credit cards industry — regardless or where you are in your journey — and make it one you can navigate with confidence. Our team is full of a diverse range of experts from credit card pros to data analysts and, most importantly, people who shop for credit cards just like you. With this combination of expertise and perspectives, we keep close tabs on the credit card industry year-round to: Meet you wherever you are in your credit card journey to guide your information search and help you understand your options. Consistently provide up-to-date, reliable market information so you're well-equipped to make confident decisions. Reduce industry jargon so you get the clearest form of information possible, so you can make the right decision for you. At Bankrate, we focus on the points consumers care about most: rewards, welcome offers and bonuses, APR, and overall customer experience. Any issuers discussed on our site are vetted based on the value they provide to consumers at each of these levels. At each step of the way, we fact-check ourselves to prioritize accuracy so we can continue to be here for your every next. Bankrate logo Editorial integrity
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You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey. Bankrate follows a strict , so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers. We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service. Rewards credit cards come in many different forms, with some offering cash back and others offering points or miles. If you’re wondering which rewards currency to go with, it helps to understand how both work. Cash back rewards cards offer cash as a percentage back on your purchases. This can mean ease of use, immediate gratification and flexible redemption options. Cards that offer , on the other hand, typically offer them as , which are most valuable when redeemed for travel. Points and miles, used wisely, can go a long way to helping you save for a coveted vacation. The type of and rewards structure that’s best for you will ultimately depend on your spending habits and lifestyle. 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. Pros and cons of 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 on 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 (up to 5 percent back) in fixed or 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 to your account. Some of the also let you cash in your rewards for gift cards, merchandise or travel rewards through your card’s portal. Cash back credit cards tend to be a good value for consumers who rarely travel and/or prefer to see save money along the way, rather than save for a future experience. Here are some advantages and disadvantages to consider when comparing them to points and miles credit cards. Pros
Earning and redeeming cash rewards is simpler and more immediate. Rewards value tends to be straightforward: A yields $2 per $100 spent. There are many no-annual-fee cash back cards to choose from. Cash back credit cards may offer hefty . Cons
Most cash back credit cards don’t come with any notable travel benefits. Cash back credit cards may deliver inferior rewards value compared to travel credit cards. You may have limited redemption options — or no options other than statement credits — depending on the card you choose. Pros and cons of 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 that let you 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 membership or built-in — although cards with the most benefits tend to charge high annual fees. Redemption flexibility
Some of the 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 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 . 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 . 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. 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. Pros
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 class or when redeemed strategically. Many travel credit cards come with travel benefits like and travel insurance. Travel credit cards have higher rewards rates and . Cons
Travel credit cards have than cash back credit cards. Airline credit cards and often have limited redemption options. 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 , so there’s no keeping up with 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 . If you travel often every year and want access to benefits that make air travel more comfortable, then an 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 , so trying out different and rewards structures could also be an option. SHARE: Holly Johnson writes expert content on personal finance, credit cards, loyalty and insurance topics. In addition to writing for Bankrate and CreditCards.com, Johnson does ongoing work for clients that include CNN, Forbes Advisor, LendingTree, Time Magazine and more. Aja McClanahan is an author, blogger and speaker on personal finance and entrepreneurship. Aja is the author of "How a Mother Should Talk About Money with Her Daughter." Cathleen's stories on design, travel and business have appeared in dozens of publications including the Washington Post, Town & Country, Wall Street Journal, Marie Claire, Fodor’s Travel, Departures and The Writer. Claire Dickey is a product editor for Bankrate, and . Before joining Bankrate, Claire worked as a copywriter for brands within the telecommunications industry as well as a hybrid marketing and content writer.