Miles vs. cash back: Which type of reward is right for you?

If you’re trying to choose between a miles or cash back credit card, it can help to consider your lifestyle and spending habits. Frequent travelers may benefit more from a miles rewards card. Those looking for straightforward rewards might prefer a cash back card.

Learn more about the differences between cash back and miles credit cards. 

What you’ll learn:

• Cash back cards typically allow cardholders to earn a percentage of their purchase price on every eligible transaction. 

• Miles cards may let cardholders earn rewards on every purchase and offer elevated rewards on travel-related purchases.

• Miles cards may come with benefits geared toward travelers, such as airport lounge access. 

• Both miles cards and cash back cards typically offer a variety of options for redeeming rewards.

Miles cards and cash back cards are two types of rewards credit cards. As you make purchases with each of these cards, you earn a percentage of the purchase amount back in the form of cash or miles. Cash back cards may offer the same rewards rate on every purchase. Or, the rewards rate may vary depending on the type of purchase. Miles cards may also let cardholders earn rewards on every purchase, but they typically offer elevated rewards for travel-related purchases.

Miles credit cards, also called travel rewards credit cards, let you earn miles or points for every dollar you spend. Keep in mind that rewards miles don’t equate to actual distance. The value of a mile—and how you can redeem it—depends on the issuer.

Generally, there are two types of miles cards.

• General travel cards: General travel rewards cards typically offer flexibility in how you can earn and redeem your miles. With Capital One travel rewards cards, you can earn miles on every purchase plus elevated rewards on bookings made through Capital One Travel. Capital One also gives you the flexibility to use your miles your way. 

• Co-branded travel credit cards: These cards are associated with specific airlines or hotels. You’ll typically earn the most miles by using the card to make purchases with that airline or hotel and its partners, which might limit where you can earn rewards.

Here are some benefits of using a miles rewards credit card:

• Elevated rewards: Miles cards may offer elevated rewards for travel-related purchases. With a Venture card, for example, you’ll earn unlimited 2X miles on every purchase and 5X miles on hotels and rental cars booked through Capital One Travel. With a Venture X card, you’ll also earn unlimited 2X miles on every purchase. Plus, you’ll earn unlimited 10X miles on hotels and rental cars and 5X miles on flights booked through Capital One Travel.

• Special travel benefits: Travel rewards cards may come with extra benefits to enhance your travel experience. For example, Capital One Venture and Venture X cardholders can receive up to a $120 credit for Global Entry or TSA PreCheck®.¹ And Venture X cardholders can enjoy complimentary access to Capital One Lounge, Capital One Landing locations and the Capital One Partner Lounge Network.² Plus, none of Capital One’s U.S.-issued credit cards have foreign transaction fees. View important rates and disclosures. 

• High-value welcome bonuses: Travel rewards cards may offer bonuses to new cardholders. For example, Venture and Venture X offer 75,000 bonus miles when you spend $4,000 in the first three months from account opening.³ Plus, Venture X cardholders get 10,000 bonus miles after each anniversary and a $300 annual credit for bookings through Capital One Travel.

With cash back credit cards, you earn a percentage of your purchase price back in rewards.

Once you’re ready to cash in your rewards, you can usually choose how you redeem them. Redemption options might include a statement credit, a check or a gift card. You can learn more about redemption options from your issuer.

Generally, there are three types of cash back cards.

• Flat-rate cash back cards: With this type of card, you’ll earn the same percentage rate on everything you buy with your credit card. For example, the Capital One Quicksilver and QuicksilverOne cards let you earn 1.5% cash back on every purchase, every day. 

• Tiered cash back cards: These cards give you different percentages of cash back, depending on the type of purchase. The Capital One Savor card offers unlimited 3% cash back at grocery stores and on dining, entertainment and popular streaming services, plus 1% cash back on all other purchases.⁴

• Rotating cash back cards: Rotating cash back cards typically offer a lower flat rate for most purchases but a higher percentage for categories that rotate throughout the year. In some cases, you can pick the categories. In other cases, the credit card issuer chooses them.

Here are some benefits of using a cash back rewards card.

• Simplicity and convenience: You use your card, and you earn cash back—it’s typically as simple as that. For example, with a Quicksilver card, you’ll earn 1.5% cash back on every purchase.

• Bonus cash back in certain spending categories: Some cards, such as Savor, may offer higher rewards in certain categories like groceries and dining. Other cards may offer rotating bonus categories that give you more rewards for making purchases at certain times.

• Flexibility: Don’t have a grand plan for your rewards? Some cash back cards may allow you to redeem your rewards on a wide range of purchases or as a check, a statement credit or a gift card.

One isn’t necessarily better than the other. Your lifestyle and spending habits could help you decide what kind of rewards card is right for you. 

You may also want to compare factors like these when you’re deciding between the two types of cards:

• Interest rate

• Fees, including an annual fee

• Bonuses

• Benefits and perks

• Rewards redemption options

You can have a miles card and a cash back rewards card. Just make sure you’re using any credit cards you have responsibly by paying on time and staying well below your credit limits if you want to avoid hurting your credit.

If you like keeping your options open, you might find that a cash back credit card offers the flexibility you’re looking for. If you’re a frequent traveler, a miles rewards card could make more sense for you.

Ready to take the next step and see which card might be a good fit? You can compare Capital One credit cards, including their rewards, annual fees and more. View important rates and disclosures. You can also check if you’re pre-approved before you apply, with no impact to your credit.