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Even though a ton of credit cards offer “points” or “miles” for every dollar you spend, those points can be very different things. Each bank and frequent-flyer program has its own rewards currency that can be used in different ways. That makes it complicated when it’s time to choose a credit card. Two different cards could offer double points on purchases, but those points could be good for very different things.
In general, there’s one specific type of point — transferable points, which you can choose to turn into frequent-flyer miles or hotel loyalty points with certain providers — that’s the most valuable. Because of the way frequent-flyer programs work, you can usually get a lot more value from a lot fewer frequent-flyer miles than you can with credit card points. Plus, with transferable points, you have more options than you would with airline-specific miles.
However, since you can earn frequent flyer miles every time you fly — in addition to any points or miles you earn from buying the ticket with your credit card — there’s no reason to pass those up, even if you don’t fly often. Plus, it can definitely be worth collecting fixed-value points, too.
Continue reading below to learn more about the three different types of travel rewards — fixed points, transferable points, and frequent flyer miles/hotel loyalty points — that you can earn.
1. Fixed-value points
Fixed value points are the simplest to use, because when you book your travel, there are no extra steps involved.
Simply book your flight, train ride, hotel, tour, or any other travel expense and pay with the relevant credit card. Then, use your credit card’s points to “erase” the travel purchase — in other words, apply them as a statement credit against the relevant purchase. It works like like cash back used to make a purchase.
With the Capital One Venture Rewards credit card, you can “erase” any purchase that counts as travel, including airfare, hotels, taxis, and subways. Capital One miles are worth exactly $0.01 each. Other cards let you use your points for non-travel purchases too, in the form of cash back, such as the Barclaycard Arrival Plus.
2. Flexible-use and transferable points
These points are generally the best kind — because they give you multiple redemption options, you can shop around to find the best value, or the best way to use them.
One way to use these points is to exchange them for cash back or statement credits against purchases. However, this is typically the worst value, as many flexible points currencies will give you less than 1¢ per point.
A better way to use your bank-based credit card points is to book travel through your credit-card company’s travel portal. These portals work just like any other online travel-booking website, such as Expedia or Priceline, with one difference: They show the price in points as well as in dollars. The best part is that your points will often get a nice jump in value, depending on your bank.
The three main flexible rewards programs that offer this option are Chase Ultimate Rewards, American Express Membership Rewards, and Citi ThankYou Rewards.
Chase Ultimate Rewards points are only worth 1¢ each as cash or statement credits. Depending on which Chase card you have, you can get a bonus on points used to book travel through Chase.
For instance, if you have the Chase Sapphire Preferred card (or certain small business cards like the Chase Ink Business Preferred credit card), you’ll get a 25% bonus on points used toward travel — in other words, those points will be worth 1.25¢ each, so 50,000 points are worth $625.
With the Sapphire Reserve, the bonus for travel purchases is 50%, so the same 50,000 points are worth $750.
American Express Membership Rewards points offer a terrible value for cash, statement credit, and merchandise redemptions, but are mostly better when you use them through Amex Travel.
Generally, points are worth 1¢ each toward flights booked through Amex Travel, and .07¢ on all other travel purchases including hotels and cruises. Occasionally, Amex offers “Insider fares” on flights — mostly with Delta — which give you a slightly better value for your points.
Finally, there’s Citi ThankYou Rewards. Just like with the Chase Sapphire Preferred, you get 1.25¢ per point used to book flights through Citi. The Citi ThankYou Premier is currently offering a 60,000 point sign-up bonus after you spend $4,000 in the first three months, so those points would be worth $750 for flights.
The other option for all three of these points currencies is to transfer them to a frequent flyer partner, turning them into frequent flyer miles.
3. Frequent flyer miles
If you’re spending on a card like the Gold Delta SkyMiles® Credit Card from American Express or the United Explorer Card from Chase, you earn frequent-flyer miles instead of credit card points. While miles can be way more valuable than points, they’re also more complicated to book with.
Transferring your Chase or Amex points to a frequent-flyer or hotel-loyalty program is generally the most lucrative use of points. This is particularly valuable for flying, since booking frequent-flyer “award tickets” is different from buying reservations outright — you can read more about how it works here. In most cases, the cash price and the miles price of a ticket aren’t linked, so it’s possible to get exponentially increased value from your points by transferring them and booking an award ticket instead. That means potentially being able to fly long-haul in first or business class with points, among other things.
Each airline prices its award tickets based on slightly different things. American Airlines and United publish relatively simple award charts. When you look up a route (for instance, North America to Europe) you’ll typically see at least two prices. The first, “saver,” is the cheapest. There are usually just a few of these seats available, and they may become open periodically between when the flight schedule is published and when the flight leaves. The second price, “standard” or “anytime,” is typically much higher.
Delta doesn’t publish an award chart, and prices flights more dynamically. However, by doing a couple of sample searches, it’s easy to figure out the lowest possible price for a specific routing.
Because standard pricing is usually much higher than saver, the trick is to find that cheaper availability. It can require some patience, and occasionally flexibility, but if you plan in advance, you can just keep your eye on award flight prices by doing occasional searches until the saver availability you need opens up.
Finding saver seats and booking award tickets is the only practical way to use credit card points for travel in first and business class — it can be a bit tricky, but it’s definitely doable.
Why it’s worth earning both points and miles
Ultimately, it’s best to collect both points and miles for the sake of flexibility. Sometimes you might find a better value by using miles, and other times points are more valuable. It can also be worth having points handy for times you can’t find saver availability and don’t have any flexibility in your travel plans. You can also use points to offset expenses that can’t be covered by frequent flyer miles or booked through a travel portal, like train tickets or ferries.
Because you can earn twice on your flights — through a credit card rewards program when you buy the ticket, and through a frequent flyer program when you actually fly — you should make sure that you’re always earning that double credit, no matter what kind of credit card you use.
While there’s value to participating in multiple credit card rewards programs, if you’re only going to use one, the best course is to opt for a transferable program.
If I had to choose just one program, I would stick with Chase — ideally the Chase Sapphire Reserve card — since it’s possible to get great value, pool your points between cards, and use them for everything from cash back and statement credits to award bookings by transferring them to frequent flyer miles.
If you’re looking to start with a new rewards program, be sure to check out our guide to the best credit card rewards and perks.
Click here to learn more about the Chase Sapphire Reserve card from Insider Picks’ partner: The Points Guy.
