Credit card miles vs cashback: which is the best option?

See which type of credit card can be the best option: credit card miles vs cash back!

If you’re one of the many travelers who like to explore the world but also want to make sure you get the most out of your credit cards, you may be wondering whether choosing credit card miles or cashback is better for your wallet.

Also, we know it can be tough to choose between the two, so we’ve put together this blog post – to help you understand which will work best for you!

So, in this article, we’ll explore both reward options in detail – from how different types of miles work to what kind of cashback deals are available.

By the end, we hope you have all the information needed to decide if travel miles or cash back is right for your travel needs! So, read on to know the answer to the credit card miles vs cash back question! 

What are credit card miles?

Credit card holders can earn miles for travel purchases made with partner airlines and hotels (usually airlines).

Also, the reward points are often called “miles,” although they do not represent the number of miles a customer has traveled; rather, they represent the amount of money the consumer has spent.

Moreover, you can use your miles to book award flights and redeem many other travel perks offered by the travel credit card you have! 

What is cashback?

Using a credit or debit card to make purchases in exchange for a refund (also known as “cash back”) has grown more prevalent among consumers over the past two decades.

One common credit card perk is a rebate of a tiny fraction of a percent for all purchases made with the card above a certain threshold.

It is also possible to receive a cash refund for purchases made with a debit card, but the amount is usually only a small fraction of the original purchase price.

What are the pros and cons of credit card miles?

Miles or frequent flier points earned through a credit card can be redeemed for various travel perks, including free or discounted hotel stays, free upgrades, and reduced flights.

However, credit card miles can also have some downsides. So, read the list below to know the pros and cons of having a travel credit card with miles!

Pros

•   You can get more flexible rewards and miles;
•   Travel credit cards offer many other additional perks and benefits related to travel and other categories;
•   You can usually get incredibly high-level welcome bonuses as a new cardholder of travel credit cards;
•   The credit card miles have more potential to maximize their value after you redeem them;
•   Travel credit cards usually have no foreign transaction fees.

Cons 

•   Usually, some of the best travel credit cards only offer co-branded perks and benefits, and this can limit your earnings;
•   This type of travel credit card tends to have higher annual fees and other fees, such as APR and transfer fees;
•   The value of the miles you earn can vary depending on how you redeem them.
  

What are the pros and cons of credit card cashback?

The idea behind a “cash back” credit card is straightforward: the cardholder receives a rebate of some kind for using the card.

For example, if your cash-back credit card offers 1% back on all purchases, you’ll get back at least 1% of the purchase price. If you do this persistently over time, you can finish up ahead even as you spend.

So, read the pros and cons of getting a cash-back credit card below!

Pros

•   With most cards, you can get easy-to-understand cash-back rewards;
•   You can easily redeem your cash back in many different ways;
•   Most cards will allow you to get cash-back rewards with no limits or spending caps;
•   You can get rewards for dining purchases, gas purchases, drugstores, purchases, and much more with cash-back cards;
•   Most cards give rewards that won’t expire as long as you have an active credit card account.
  

Cons

•   Most cash-back rewards are not so flexible. So, you’ll need only to make eligible purchases to get your rewards points;
•   The cashback cards don’t usually offer other perks besides the cash-back rewards and welcome bonuses;
•   The welcome bonuses have lower rates and rewards than travel credit cards.
  

Credit card miles vs cashback: which one should you choose?

Whether a travel credit card or a cashback credit card would be preferable depends on your tastes and how often you travel.

This way, frequent fliers who usually stay at the same hotel chain or fly with the same airline would benefit most from a co-branded miles card.

However, a generic travel rewards card may be a smart choice if you travel frequently but don’t want to be tied to a certain airline or hotel company.

Also, if you aren’t a frequent flier but still want to earn rewards on your spending, a cash-back credit card may be a good option for you.

In addition, a cash-back card is a way to go for individuals who prefer a simple, flat-rate reward on all transactions. Since you will be paid cash, you won’t need to make any calculations to establish the value of your incentives.

If your cash-back credit card offers bonus categories, it is in your best interest to use it for all of your purchases in those areas.

On the other hand, when compared to cash-back rewards, benefits in the form of airline miles can be maximized.

So, if you have a credit card that offers travel rewards and is prepared to put in the time and effort, you could get more value out of each mile.

Also, optimizers have the purpose of maximizing their mileage’s worth. Thus, they will plan routes that do just that.

Therefore, the credit card miles vs cash back question needs to be answered by your lifestyle and financial needs.