Credit card rewards

Comparing Cash Back vs. Points contents
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Comparing Cash Back vs. Points

10 min read
Last Updated: September 12, 2025
Credit card rewards

Table of contents

Key Takeaways

  1. Credit card rewards are incentives for credit cardmembers that you may redeem for statement credits, travel expenses, and more.

  2. Credit card rewards come in various forms, including cash back, points, and miles, which differ across card issuers.

  3. A cash back card, points card, or miles credit card each has unique advantages and drawbacks. The best choice depends on your goals and priorities.

A rewards credit card can be a simple way to earn benefits on your everyday purchases. Credit card issuers offer a wide range of rewards cards, each with its own reward program. So, how do you choose between credit card points vs. cash back? Or miles vs. points?

 

In order to select the right type of credit card reward for you, you’ll need to understand the differences between cash back, points, and miles. Plus, each card issuer may define these terms differently in their rewards program. Ultimately, you may want to consider how a card’s bonus category (or categories), membership reward rates, and redemption options line up with your spending habits to find the best fit.

The differences between credit card cash back vs. points or miles

Broadly speaking, there are three types of credit card rewards: cash back, points, and miles. Because membership reward structures differ across issuers, let’s break down credit cards by type.

Cash back rewards card

As the name suggests, you earn cash back on purchases when you use cash back credit cards. Typically, you can redeem cash back rewards for statement credits that you may apply toward your balance or use for certain expenses. In some cases, you may be able to use your cash back to make purchases from certain merchants, or you might be able to choose a cash deposit into your bank account.

 

Cash back credit cards with tiered rewards typically offer a bonus rewards rate for certain types of transactions, like gas or groceries. Opting for a card that aligns with your spending habits may help you take your cash back even further.

Card issuer rewards points

Your credit card issuer’s rewards program may offer credit card points instead of cash back. Credit card points’ value may vary depending on the redemption option you choose. You may earn bonus points for purchases in select categories, much like cash back credit cards.

Travel card rewards miles

Travel credit cards may earn miles as rewards for each purchase. Depending on the travel rewards card, you may be able to redeem your miles as a statement credit for travel purchases, like flights or hotel rooms. You may also be able to redeem rewards on a miles credit card for other types of purchases, but reward programs vary across issuers.

Loyalty program points and miles cards

An airline, hotel, or retail credit card may offer points or miles in the associated company’s loyalty program. You may redeem the points or miles through the loyalty program rather than with the credit card issuer. Some membership reward credit cards may only work for purchases with the partner retailer, like a department store credit card. Others may allow you to use your credit card elsewhere.

While there are distinct types of rewards credit cards, they may have some overlap. For example, some cards are labelled “cash back cards” but instead earn points in the card issuer’s program. Before you apply for a rewards credit card, make sure you understand how the reward program works.

Compare

Are credit cards with cash back, miles, or points rewards better for travel?

All three types of credit card rewards may help you meet your travel goals in different ways.

Using your credit card rewards for travel may work differently across types of rewards credit cards:

  • If you choose a cash back card, you may be able to redeem your cash back for statement credits or extra cash to pay for travel expenses.
  • If you choose a travel rewards credit card, you may be able to redeem miles for airline tickets, hotel rooms, hotel upgrades, or other travel expenses.
  • If you choose a reward points credit card, you may be able to purchase certain travel rewards designated by the card issuer or those included on the rewards platform.

Card-issuer rewards points vs. cash back

Understanding how to earn and redeem rewards points may be tricky, depending on your credit card issuer. The value of cash back rewards is usually fairly straightforward. A card with 2% cash back means you earn 2% (two cents) of every dollar you spend on an eligible purchase back. While cash back rewards typically come with flexible redemption options, the value of your rewards usually stays the same no matter how you redeem them.

 

But the value of each credit card rewards point may depend on the redemption option that you choose. So, if you earn 2X points on a purchase and redeem those points as a statement credit, each point may only be worth two cents. But rewards may be twice as valuable if you redeem them with a travel partner. That means rewards points may offer higher earnings, but you may have to do extra homework to get the best value.

 

Check the issuer’s terms to learn how you might earn and redeem points rewards, including bonus points categories and limitations. You may be able to keep track of your rewards in your mobile banking app.

Types of credit card rewards
Pros Cons
Cash back
  • It’s typically simple to earn and redeem rewards.
  • May charge no annual fee.
  • Offer flexible rewards redemption options.
  • May offer bonus rewards on your everyday purchases.
  • May not offer many additional perks.
  • Rewards may have a lower value than other types of rewards.
  • May have a lower rewards rate than some rewards points credit cards.
Points
  • Certain redemption options may offer an especially high value.
  • May come with perks like airport lounge access.
  • Some offer a substantial introductory bonus.
  • May come with higher annual fees than other options.
  • May offer limited rewards redemption options.
  • You may have to work harder to maximize rewards.
  • May have a complex rewards structure.
Loyalty program points or miles
  • Rewards may be highly valuable.
  • May come with perks like priority boarding, room upgrades, a free checked bag, or elite status.
  • Some redemption options may be worth even more than others.
  • The value of rewards may fluctuate.
  • May have redemption limitations, like blackout dates.
  • May charge a high annual fee.
  • Redemption options are typically limited to specific airlines or hotel chains.
Travel rewards
  • May have flexible redemption options for travel expenses and more.
  • May offer a competitive welcome offer or bonus.
  • Some options are suitable for both travel and everyday purchases.
  • May have a simple rewards structure.
  • May not offer hotel- or airline-specific perks.
  • Discover® has no annual fee on any card, but other travel rewards cards might.
  • Rewards may have lower value than loyalty program points or miles.

Loyalty program points or miles vs. cash back

An airline or hotel credit card may be a good choice if you have a preferred airline, favorite hotel chain, or travel partner that you use often. For instance, if you live near a major hub for a particular airline, getting the corresponding airline credit card to earn miles may make sense.

 

Limited redemption options may be a disadvantage of travel rewards cards. You may only be able to redeem your miles for flights through a certain airline or hotel nights at a specific chain. The value of each rewards point or mile may also depend on current travel costs. There’s no guarantee that the program won’t change its rules and require more miles or points to redeem your rewards in the future.

 

Cash back isn’t generally limited to a specific airline or hotel chain, on the other hand. The value of your cash back rewards tends to be easy to calculate, although card issuers may impose rules on their cash back rewards programs that change the final available cash back value. Cash back rewards do tend to be flexible, so you may not be limited to company-specific travel.

Travel card rewards miles vs. cash back

Travel card rewards miles are often similar to cash back cards in that you can use your miles rewards or opt for cash back. With the Discover it® Miles travel card, you earn 1.5x Miles on every purchase. Turn Miles into cash. Or redeem as a statement credit for your travel purchases like airfare, hotels, rideshares, gas stations, restaurants, and more.1

When is cash back better than other types of rewards?

Cash back may be better than other types of rewards if you want simplicity or flexibility.

Did You Know?

A credit card cash back program gives you the freedom to choose how you use rewards, instead of locking you into a points or miles system. You may choose the redemption option that works best for you.

Learn More

The value of credit card cash back typically stays consistent, so you can know the value of the rewards you earn. Conversely, the value of a credit card mile or point may increase or decrease based on current travel costs or a loyalty program’s rules.

 

You can compare cash back cards to determine which card will be best. Some cash back cards may require you to accumulate a specified cash back amount before you can redeem your rewards, or the rewards expire after a certain amount of time. With Discover rewards redemptions, you can redeem your rewards for cash in any amount, at any time.2

Do you have to choose between cash back, points, or miles rewards?

You don’t necessarily have to stick to a single type of rewards credit card for all your purchases. In fact, some people like to have two or more types of credit cards to maximize how much they earn.

 

For example, the Discover it® Cash Back Credit Card lets you earn 5% cash back on everyday purchases at different places you shop each quarter like grocery stores, restaurants, gas stations, and more, up to the quarterly maximum when you activate. Plus, earn 1% cash back on all other purchases–automatically. You could use the Discover it® Cash Back Credit Card on purchases that earn 5%, and the Discover it® Miles Card lets you automatically earn unlimited 1.5x Miles on every dollar of every purchase.1

 

Multiple credit cards may mean multiple annual fees. However, some rewards credit card issuers, like Discover, charge no annual fee on any card. Keep in mind, applying for multiple cards may lead to new hard inquiries on your credit report, which may hurt your credit score. Some credit issuers let you see if you’re pre-approved for their credit card offers before applying, which may not impact your credit score.

The bottom line

Each credit card reward program has unique advantages and drawbacks. The best fit for you depends on your credit background and your priorities. If you want to maximize your earnings at your favorite stores, you may consider a cash back card with tiered rewards that line up with your shopping habits. Or if you want to travel in style with your preferred airline, you may choose a loyalty points card. You may even mix-and-match cards to suit different needs—the choice is yours.

Important Information >

Next steps

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Learn about Discover It® Cash Back Credit Card

See rates, rewards and other info

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Learn about Discover It® Miles Credit Cards

See rates, rewards and other info

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