You might have heard friends or family booking vacations using “miles.” Credit cards offer these award points to incentivize loyalty or encourage customers to open an account. There’s a good reason so many people have taken up collecting points or miles as a hobby: you can score some pretty incredible vacation deals over time.
Whether that’s a five-night stay at an all-inclusive Caribbean resort or a round-trip ticket to Europe booked with miles, optimizing credit card miles can be a way to earn more with everyday purchases.
Below, you’ll find an overview of how credit card miles work, plus tips on earning and redeeming miles and a few pitfalls to avoid so you can take your dream vacation for less this year.
MoneyLion can help you explore a wide variety of credit card options tailored to different needs and preferences.
What are credit card miles?
What are miles? Credit card miles are a type of rewards “currency” offered by certain credit cards. Every time you make a $1 purchase with a mileage credit card, you’ll typically earn 1 mile in return.
Many mileage credit cards offer bonuses in certain spending categories. For example, a card might offer five miles per $1 spent on a rental car, hotel, or flight purchase and one mile per $1 for all other purchases.
You can redeem credit card miles directly with the airline that co-branded the card. In some cases, such as certain cards offered by Chase, American Express, and Capital One, you can earn universal points to transfer and use with partner airlines, hotels, or entertainment like concerts or sports tickets.
You can also often opt to redeem miles or points for cash, but that may not be the most valuable use of miles.
The different types of credit card miles
There are various types of credit card miles, but they fall into three main categories:
- Airline frequent flier miles
- Transferable miles and points
- Cash-equivalent miles
Airline frequent flier miles
You can earn credit card air miles or airline frequent flier miles on a credit card co-branded with a major airline. American Airlines, United, Southwest, Alaska Airlines, and Delta all have co-branded credit cards. When you earn miles with these cards, they can be transferred to your airline’s frequent flier account where you can use them to buy flights. In the case of co-branded cards, you can only use miles with the specific airline or its alliance partners (more on that below).
Transferable miles and points
Transferable miles and points are the most versatile option, but because of their added flexibility, they can also be the most confusing to figure out.
With a transferable points credit card like Chase Sapphire Preferred or The Platinum Card from American Express, you earn points with every purchase and can transfer to various airline or hotel partners. You can also typically redeem rewards directly or for event tickets or cash back, although redeeming points like this often make them less valuable.
Cash-equivalent miles
Cash-equivalent miles are the simplest to redeem. For example, these cards may allow you to redeem points or miles for a direct statement credit. Others may limit the redemption to travel purchases like flights and hotels. Sometimes, you can book the flight or hotel through a dedicated credit card booking portal (like the ones available from Chase or Capital One) and “pay” for your trip with points earned.
How do airline miles work on credit cards?
Each airline’s miles program works a little differently, but many let you book flights on airlines within their alliance. The three main alliances are Star Alliance (26 member airlines), SkyTeam (19 member airlines), and Oneworld (14 member airlines).
For example, United is a part of the Star Alliance and allows you to book flights offered by other major airlines in the alliance, including Air Canada, Air India, Air China, Air New Zealand, Singapore Airlines, Lufthansa, Thai Airways, Cathay Pacific, and TAP Portugal.
Suppose you sign up for the United Explorer credit card this April 2024 and hit the minimum spending requirement of $3,000 on purchases in the first three months your account is opened. With that, you’ll earn 50,000 bonus miles. You can then use United’s mileage ticket search tool to check different routes and dates to use your miles. You can get the best deals if you can be flexible with dates, destinations, or both.
For example, you could use those 50,000 miles for a roundtrip ticket to Europe with TAP Portugal or a flight to Hong Kong with Cathay Pacific.
How do bonus miles work?
Airline credit cards offer bonus miles for a variety of activities. For example, you could earn a significant bonus when you sign up for a credit card and meet the minimum spend specified by your card issuer.
Remember that, in order to make your bonus miles worthwhile, you’ll need to hit the minimum spend and pay off the card balance on time. Otherwise, the extra interest payments will likely negate any mile bonus benefits you earn.
Other ways to earn bonus miles include spending in bonus categories unique to each credit card. For example, as of April 2024, Alaska Airlines offers 3 miles for every $1 spent on eligible Alaska Airlines, 2 miles for every $1 spent on certain categories like gas and local transit, and 1 mile per $1 spent on all other purchases.
Below, you’ll find several more strategies to maximize bonus miles and start saving up for your next vacation.
How to earn miles on credit cards
In addition to one to 10 points per dollar spent (unfortunately, one point is the most common), you may earn bonuses when you sign up for a new card, refer a friend, use credit card shopping portals, or take advantage of special promotions. Here are all the steps you can take to earn more miles.
Credit card spending
The first way to earn miles is through credit card spending. While you’ll typically need to spend much more than the cost of a single trip to rack up significant miles, every little bit still adds up.
You can earn miles for every dollar spent on purchases. The base rate is usually 1 point or mile per $1 spent. However, airline and hotel credit cards usually offer higher points when you use them for travel purchases. Some cards also offer bonus miles for specific categories such as travel, dining, groceries, or gas. If you can choose a card or cards that offer higher points in your most common spending categories, you can maximize your earning potential.
For example, for many families, groceries are one of their biggest monthly expenses. Choosing a card with 5 points per $1 spent or even 3 points per $1 can add up quickly.
Suppose you spend an average of $1,600 monthly for your family of four on groceries. If you purchase those groceries on a card offering 5 points per $1, you can earn about 8,000 points per month, or 96,000 points a year. Depending on the rewards program, that could be enough for a couple of roundtrip tickets within the US, or to the Caribbean, Mexico, or with a great deal, to Europe.
That is a best-case scenario. More commonly, you’ll earn 2 points per $1, which is still 38,400 miles over a year, enough to reduce flight costs on your next vacation.
Sign-up bonuses
The quickest way to earn miles is with a sign-up bonus. Credit card issuers often offer generous sign-up bonuses to attract new cardholders. These bonuses typically require spending a certain amount within a specified timeframe. Common amounts are $3,000 or $5,000 within three months of account opening. If you can take advantage of these minimum spend bonuses and afford to pay off the card in full, you can get a big boost to your miles balance right from the start.
Note that credit cards periodically offer higher bonus incentives. If the base bonus is 50,000 miles, once or twice a year, they might offer 70,000 miles or more with the same minimum spend. You could get even more award miles if you can wait and monitor rewards.
Referral bonuses
Many credit cards offer referral bonuses when you refer friends or family members to apply for the same card. For example, as of April 2024, the Capital One Venture X card offers 25,000 bonus miles for each referral, up to 100,000 bonus miles per calendar year.
Other cards offer varying bonuses but are often a way to quickly earn additional miles beyond regular spending. With a referral bonus, your friends will also get a significant signup bonus if they meet the minimum spend.
Shopping portals
Many credit card issuers have online shopping portals where cardholders can earn additional miles by purchasing items at participating retailers. These portals often offer bonus miles in addition to the miles earned from credit card spending. For example, at the American Airlines shopping portal, you can find specific stores offering a bonus of up to 10 miles per $1 spent.
Remember, it’s best to only use these shopping portals for purchases you’d need to make anyway or have the budget to pay back. Earning 1,000 miles by spending $100 on something you didn’t need won’t help with long-term savings. You can monitor all shopping portals’ current offerings on cash back or airline miles with CashbackMonitor to find the best deals.
Travel partners
Some credit card rewards programs partner with airlines, hotels, rental car companies, and other travel-related businesses. You can access the credit card’s booking site and earn bonus miles by booking travel through these partners or taking advantage of special promotions and offers. With these partners, you might be able to access concert tickets, rental cars, hotels, or flights at a discount – making each dollar you spend more valuable.
Special promotions
Credit card issuers occasionally run promotions allowing cardholders to earn extra miles for specific activities, such as dining at certain restaurants, shopping at select retailers, or using the card for certain purchases. Of course, this varies widely by the individual credit card.
For example, the Citi Dividend is a cash-back card that offers up to 5% cash back in rotating categories each quarter, but you’ll need to enroll in the specific offer.
How to redeem miles on credit cards
Redeeming miles on credit cards takes a bit of research if you want to maximize your value per mile. Here are the most common ways to redeem credit card miles.
Airline tickets
One of the most popular ways to redeem miles is for airline tickets. You can use your accumulated miles to book flights with partner airlines or through the credit card issuer’s travel portal. If the credit card allows you to transfer miles to the airline’s frequent flier program, you may get greater value for the miles. Airline miles have dynamic pricing but tend to be worth $0.01 to $0.0125 per mile.
For example, with the Chase Sapphire Preferred, you can earn:
- 5x on travel purchased through Chase’s Ultimate Rewards portal
- 3x on dining, select streaming services, and online groceries
- 2x on all other travel purchases
- 1x on all other purchases
You could get even greater value if you transfer those miles to United, Southwest, or JetBlue. Suppose you spend $2,000 on travel purchases through Chase Ultimate Rewards. With those 10,000 points, you could book a one-way flight within the US on any of those airlines.
If you combine those 10,000 points with other points earned on everyday purchases and the 60,000 bonus points you could have earned at card opening, over time you could accumulate over 100,000 points to use for your next vacation. The great thing about Chase is that you don’t have to transfer all 100,000 points to a single airline. You could transfer a portion to an airline partner, and use some for hotels.
Hotel stays
Miles can also be redeemed for hotel stays at participating hotels and resorts. Some credit card issuers have major hotel chain partnerships, allowing you to use their miles for free or discounted stays.
Continuing with the example above, you could choose to transfer Chase Sapphire Preferred miles to any of its three hotel partners: World of Hyatt, Marriott Bonvoy, and IHG Rewards Club. The points will transfer 1:1, so you can use them to take advantage of extra hotel offers, like Marriott’s stay 4 nights, and get one free offer. Or, you could use them at Hyatt hotels, which have some of the best point conversions around: around 1.7 cents per point when used toward hotel stays.
Car rentals
Car rentals are a less-popular redemption, but still worth considering. Many credit card rewards programs allow you to redeem miles for car rentals, either through partner rental agencies or by booking through the credit card issuer’s travel portal. American Express, Chase, and Capital One travel portals all offer various rental car booking options, but some airlines allow you to bundle rental cars with a flight booking as well. However, check prices as these bundle offers may be pricier than booking directly.
Cashback or statement credits
Many credit cards also allow you to redeem miles for cash back or statement credits. This option allows cardholders to use their miles to offset their credit card bills or receive cash deposited into their bank account. You can expect your miles to be worth $0.006 to $0.01 per mile if you redeem for cash back, one of the lowest reward options.
How to keep track of miles on credit cards
Miles for credit cards are only valuable if you keep track of the expenses and pay all the credit cards on time. Otherwise, you’ll risk hurting your credit score with a late payment. Before setting up a mileage tracking sheet or app, set up automatic payments on all cards as you have to avoid making a late payment.
Staying organized with miles earned and redeemed can also help you maximize rewards. While old-school miles enthusiasts would keep track of miles in a spreadsheet, there are now apps that make it easier to do so. AwardWallet, CardPointers, Travel Freely, and MaxRewards are some of the options. In addition to tracking miles, these apps automatically update the rewards categories on each of your cards, which may change monthly or quarterly.
You can also find credit card comparison tools to find the best rewards whenever you’re ready to apply for a new credit card. Or, check out MoneyLion’s tips to manage credit cards to ensure all the miles are helping build your credit score, and not hurting it.
Common pitfalls to avoid with credit card miles
Tracking, earning, and redeeming credit card miles can be a rewarding hobby. You could take a dream vacation for free or save more on everyday purchases. However, all the fun goes away if you fall into one of these common pitfalls. Here’s what you may want to watch out for.
1. Overspending to earn miles
If you typically spend $1,500 a month on a credit card for expenses and the minimum spend for a credit card bonus is spending $10,000 in three months—in most cases, the best financial advice is: don’t do it!
There are exceptions, for example, if you have a major home renovation project or large expense coming up that you’ve budgeted for. But most of the time, if you’re spending more just to earn extra miles, the bonus isn’t worth it.
To avoid this pitfall, set your budget and stick to it. Avoid carrying a balance on credit cards so you don’t have to pay interest and other fees.
2. Letting miles expire without redeeming them
Miles aren’t like money. In most cases, miles lose value over time and eventually expire if your account has been inactive for some time. Each airline or credit card has a different policy but typically ranges from six months to 36 months.
To avoid this pitfall: spend your miles (and then earn more)! If you haven’t spent them and they are about to expire, you may be able to keep them active by purchasing additional miles or purchasing something through an airline shopping portal. Policies vary by credit card, airline, and rewards program, so you’ll need to check if there’s something you can do to prevent the miles from expiring.
3. Not understanding the terms and conditions of miles programs
If you don’t understand the terms and considerations of the mileage program, you might get lower redemption values or have to pay additional fees. Be sure to understand the terms and conditions of any credit cards you apply for as well as the mileage programs to potentially earn or save more.
How to choose the best credit cards for miles
Choosing the best credit card for miles depends on more than the total points, or even the value of points, which can vary. However, the points value is a good starting value for comparison. As a general rule, you can consider credit card miles to be worth a baseline of $0.01 per mile. Anything above that is considered “good”. Anything below that is a mediocre deal.
Airline miles with dynamic pricing can be worth $0.01 to $0.0125 per mile. If you have a credit card with transferable points or miles, they can be worth anywhere from $0.006 to $0.02 per mile—or more—depending on how you use them. You can usually get the most value from transferring your rewards to an airline or hotel partner for flights or hotel booking. Using miles for a statement credit is typically less valuable, anywhere from $0.006 to $0.01 per mile.
Beyond the value of a mile, you’ll want to look at the reward you’ll actually use. For example, a JetBlue card won’t make sense if you don’t regularly travel where it flies. Consider also favorite destinations and local airports. For example, if you live near one of Southwest’s hubs, or prefer staying at Marriott hotels, choosing cards that transfer to those programs is a smart move.
Finally, you’ll want to check out welcome bonuses and compare annual fees and extra perks. Some of the credit cards with the best signup bonuses and perks come with high fees. But if you travel regularly, those perks—TSA precheck cost reimbursement, lounge access, free breakfast, free room upgrades, and more—can be worth it.
There’s no one-size-fits-all credit card. Instead, the best card for you will combine the rewards you can use, with valuable miles, a good signup bonus, and a reasonable annual fee for your lifestyle. Find some of the best options tailored to your needs here.
Are Credit Card Miles Worth It?
Credit card miles require some tracking and research but then offer excellent rewards. Whether they’re worth it depends on your spending habits, credit score, and travel goals.
The credit cards with the best signup bonuses are typically only available to borrowers with good or very good credit scores. To earn more credit card air miles, consider improving your credit score first, and then apply for the premium card that fits your lifestyle.
FAQ
Do credit card miles equal actual miles?
In some cases, credit card miles transfer 1:1 with airline mileage programs. The exact value of credit card miles varies by credit card and transfer partners.
How do credit card airline miles work?
Credit card airline miles work similarly to other miles earned through the airline’s loyalty program. You can redeem airline miles for flights according to the individual airline’s mileage program. Depending on the airline, you could get a short-haul flight for anywhere from 2,500 to 20,000 miles.
How many credit card miles does it take to fly?
The credit card miles it takes to fly depends on where you want to go, when, and the airline you’re flying. At the ultra-low end, Southwest Airlines uses dynamic reward pricing so you can get a flight from Austin, Texas to Cancun, Mexico for under 3,000 miles.
Likewise, Delta offers a SkyMiles flight for just 2,500 each way between San Francisco and Seattle during low-demand times. Many major airlines have short-distance flights for 10,000 miles or less one way, allowing you to optimize rewards.
