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 back on every eligible transaction. 

• Travel rewards cards generally let cardholders earn miles or points when they make purchases, even if they’re not travel-related purchases.

• There are different types of cash back cards as well as different types of travel rewards cards. 

• Both types of cards typically offer a variety of options for redeeming rewards. 

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. Your redemption options might include a statement credit, check or gift card.¹ You can find out from your issuer which choices are available for your card.

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, 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.²

• 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 the categories.

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

• Simplicity and convenience: You use your card, you earn cash back—it’s typically as simple as that. For example, with the 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—like some miles cards—may allow you to redeem your rewards on a wide range of purchases, or as a check or statement credit.

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 and its rewards program.

Generally, there are two types of miles cards.

• General travel cards: General travel cards typically offer flexibility in how you can earn and redeem your miles. For example, the Capital One Venture Rewards card lets you earn unlimited double miles with every purchase. Cardholders can also earn bonus miles with qualifying purchases. 

• Co-branded airline credit cards: These cards are associated with specific airlines. You’ll typically earn the most miles by using the card to buy flights and other travel purchases with that airline and with its partners. But that might limit where you can earn rewards. Airline rewards cards can also include benefits like priority boarding or seat upgrades.

Here are some benefits of using a miles rewards credit card, even if you’re not making travel purchases.

• Advantages for frequent travelers: With Venture, you’ll earn unlimited 2X miles on every purchase and 5X miles on hotels and rental cars booked through Capital One Travel. With Venture X, 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.³

• Special travel benefits: Venture and Venture X cardholders could receive up to a $120 statement credit for either Global Entry or TSA PreCheck®.⁴ Venture X also offers complimentary access to participating airport lounges thanks to a complimentary Priority Pass™ membership with Visa Infinite® benefits.⁵ In addition, Venture X offers a $300 annual credit for bookings through Capital One Travel, where you’ll get our best prices on thousands of options.⁶ Some travel cards may also come with benefits like travel insurance or waived foreign transaction fees.

• High-value welcome bonuses: Some 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.

• Potential sales: The value of miles can change depending on when and how you redeem them. So you might be able to snag a good deal from time to time.

The value of your rewards may depend on how you use them. For example, rewards miles may be worth more when they’re earned or redeemed in the card issuer’s travel portal.

It may help to consider whether a card has an annual fee. And if it does, a little research may help you decide whether its benefits help balance out the fee.

Is it better to earn cash back or miles rewards? 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 such as an early spend bonus

• Benefits and perks

• Rewards redemption options

If you like keeping your options open, you might find that a cash back credit card offers the flexibility you’re looking for. But 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? Capital One’s card comparison tool can help you compare rewards, annual fees and more.