Credit Card Points and Miles Values. Reward credit cards act as valuable addition to your wallet if you are earning points or miles while you make purchases that you would be making anyway. In a 2021 survey of 2,000 credit card holders by slickdeals, respondents stated that they saved an average of $757 per year using their rewards.
What’s important to keep in mind, however, is that the value of the points or miles that you would be earning would sometimes vary significantly from card to card. The deal here is to select one of the best rewards credit cards and then making use of your rewards strategically. Below I would give you all the details you need to know.
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Earning Credit Card Points
Reward points sometimes can be a strong incentive to choose plastic over cash. As a matter of fact, 53% of Americans earning rewards and points make them want to make use of their credit card even more often. To add, 49% of those polled said that they would consider switching cards if it meant they would be offered the chance to earn more.
Rewards credit cards can offer different structures for earning points. Some make use of Flat rewards rate with a set of a number of points earned per dollar spent. Others tier their rewards, with some purchases earning more points per dollar than others.
Also, the card also offers an opportunity to earn some extra points through introductory welcome bonuses, anniversary bonuses, and referral bonuses. Earning these points would typically hinge on meeting certain conditions. So, for example, you actually might be able to earn 100,000 bonus points for just charging $3,000 in purchases made in the first three months.
Credit Card Points Worth
Typically, Credit card points are valued at 1 cent each. But the actual value that you would get in exchange for your point vary based on what you redeem them for and that card that you are in possession of. Based on the type of card you are making use of; your redemption options might include:
- Statement credits
- Paying off past purchases
- A cash deposit into a bank account
- A paper checks
- Shopping with points
- Gift cards
- Charitable donations
Some Card would even allow you to apply points toward the mortgage, car loan, or student loan payments if your card and loans are being issued by the same lender.
Earning Credit Card Miles
Earning miles with a reward card might appeal to travelers that want to make use of their rewards toward plane tickets. Miles usually get associated with the airlines’ co-branded rewards cards, but you would still be offered some travel reward options that would enable you to earn miles without booking a specific airline.
Whether it makes sense to select a card that’s co-branded with a particular airline or one that is offering miles on every purchase depends on your typical spending habits and how you would like to travel. If what you fly with primarily is Delta, for instance, then it might make sense to have a travel rewards card that pays you a higher number of miles for booking delta flights. On the other hand, if you are not loyal to any particular airline, a card whose offers are unlimited double miles on purchases could actually be a much better fit.
Just like travel cards that are offering points, reward cards that offer miles might have some introductory welcome bonuses, anniversary bonuses, or referral bonuses. These are all opportunities for you to get your miles balance increased over what you earn just by charging purchases to your card.
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What are Travel Miles Worth?
Generally, the value of airline miles is 1 cent each. But the actual value that you stand to get from your miles sometimes depends on which card you have and how you are redeeming miles. The basic redemption option is typically plane tickers, although you might also be able to redeem miles for:
- Rental cars
- Other travel expenses (which include cruise, vacation, or resort packages)
- Gift cards
Also, you would be able to transfer your miles to other airlines, hotel partner, or rail travel partners. It is very important that you keep in mind, however, that your miles may not transfer on a 1:1 basis. This means that you potentially could lose miles value by transferring your rewards from one travel loyalty program to another.
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Credit Card Points and Miles FAQ
What is a Travel Mile?
A travel mile is a reward earned when you make purchases with a travel rewards credit card or book flights via an airline’s frequent flyer program. You can redeem travel miles toward airfare and other expenses, though their redemption value can vary from a different program to another.
What Are Travel Miles and Points Worth?
Generally, travel miles and points are actually worth 1 cent each. But the value of your miles or points can vary based on the card that you earned them with and what you redeem them for. it is actually possible for travel points and miles to be actually worth more than 1 cent each or less, depending on the card and how you choose to make use of them.
How Can I Use Travel Points?
There are tons of ways you can make use of travel points, depending on the options your card affords. It is usually possible to use travel points to make payments for flights, hotels rental cars, cruises, and vacation packages. You might also be able to redeem travel points for cash, statement credits, shopping, gift cards, or charitable donations
What is the Best Way to Use Credit Card Points?
The best way to make use of credit card points is via the redemption option which usually yields the most value. Let’s say, you might get more value when making use of points for flights or hotels than you would by redeeming them for cash. Gift Cards and shopping with points are where you get to yield the least redemption value overall for points or miles.