Credit card miles vs. airline miles: Which is better?

Collecting frequent flyer miles is a lucrative pastime for road warriors and occasional travelers alike — take a flight, earn airline miles, and eventually collect enough to redeem for a free ticket.

But pro travel hackers know that the best way to earn miles is on the ground, by taking advantage of a rewards credit card that gives you miles via sign-up bonuses, everyday spending, membership renewal, etc.

What’s the difference between the two? How much are credit card miles and frequent flyer miles worth on average? And if you regularly fly with United, Delta, or American Airlines, which cards should you consider?

Let’s get one thing straight at the beginning. The terms “miles” and “points” are effectively interchangeable in common parlance. Some credit cards call their proprietary rewards currency points, and others call them miles. For example:

• Chase calls its rewards “Ultimate Rewards® points”
• Capital One calls its rewards “Capital One miles”

Airlines do the same thing:

• American Airlines calls its rewards “AAdvantage® miles”
• JetBlue calls its rewards “TrueBlue points”

The word “miles” usually refers to airline frequent flyer rewards — while “points” usually refers to credit card rewards. But that’s far from a rule. In other words, don’t focus too heavily on the words “points” and “miles” when constructing your travel hacking strategy.

» MORE: How to fly free with Chase Ultimate Rewards®

There are huge differences between credit card miles (bank-issued rewards) and frequent flyer miles (airline-issued rewards). Let’s take a look at a few key areas.

Earning

Credit card miles (again, more commonly referred to as points, just FYI) are rewards that are given to you by your credit card issuer. You won’t earn them by flying on an airplane. You’ll only earn them via credit card welcome bonuses, using your card for making purchases, or any anniversary bonuses you get each year.

Cards that earn these types of points are not co-branded with an airline. For instance, the Chase Sapphire Preferred® Card earns Chase Ultimate Rewards® points.

Airline miles are rewards you’ll get for flying on an airplane. You can also earn them via credit card spending if you’ve got a co-branded airline credit card.

Airline credit cards award frequent flyer miles of the airline stamped on the front of your card. For example, If you hold a Chase United Airlines card, you’ll earn United Airlines miles — not Chase points.

Redeeming

Redeemable airline miles can generally be used for one thing: flights. There are some exceptions (various airlines allow you to use mileage to reserve hotels and rental cars through a proprietary online portal, or even purchase airport lounge access and merchandise) — but you’ll get an extremely poor value per mile.

Most notably, you can’t cash out airline miles, and you can’t use them to receive a statement credit on your card balance.

All this to say, airline miles should be used exclusively for award seats on a plane.

The bank miles (or points) you earn from a credit card, on the other hand, can be used for lots of things — not just flights. For example, Capital One miles can be:

• Cashed out at 1 cent each
• Transferred to many airlines for nearly free flights, such as Air Canada Aeroplan, British Airways, etc.
• Transferred to hotel programs for free hotel stays, such as Wyndham and Choice
• Used to “buy” travel at a rate of 1 cent per mile

Other less flexible bank points can still be used for more things than airline miles. As an example, U.S. Bank Altitude points can’t be transferred to airline partners, but they can be:

• Cashed out at a rate of 1 cent each
• Redeemed for travel through the U.S. Bank Travel Portal for up to 1.5 cents each
• Used to buy merchandise at a rate of 1 cent each

All this to say, credit card miles are far more flexible than airline miles. Credit card miles are the superior earning choice, particularly if you aren’t married to a specific airline.

Status miles

It’s also worth mentioning another kind of airline currency, generally referred to as elite qualifying miles/points. These are not redeemable for free flights. Instead, you earn them (usually simultaneously with redeemable miles) for the purpose of achieving elite status.

For example, if you have no American Airlines elite status, you’ll earn 5 Loyalty Points per dollar you spend with AA. You’ll earn AAdvantage® Gold elite status after you earn 30,000 Loyalty Points — so you’ll have to spend $6,000 with AA to earn Gold status.

Airlines often will let you earn status miles by making purchases with their credit card, through dining programs, via online shopping portals, etc.

Cash back is the ultimate reward currency because it’s completely flexible. You can book flights and hotels with it, you can pay for meals with it during your travels — or you can pay rent with it if you’re not currently traveling.

But if travel is your aim, credit cards that earn travel rewards are superior to cash back credit cards. Here’s why:

• Cash back can be redeemed at a fixed rate. Every cent you earn is worth… 1 cent.
• Travel rewards are worth varying amounts, depending on how you use them. You can get significantly more than a rate of 1 cent per mile. You can also redeem them for a statement credit, making them as good as cash.

It’s absolutely silly how much value you can receive from credit card miles. However, you’ve got to know a bit about the travel rewards world to get such a good value.

An alluring aspect of cash back credit cards is how easy they are to use. If you’re not willing to dive into the awards travel game, cash back probably suits you better.

» MORE: Best cash back rewards credit cards

This is a question I get a lot. There’s no blanket answer, however.

The value you’ll get depends entirely on how you use your miles. Just to give some examples, here are a few ways I’ve redeemed credit card miles in the past, and the value I’ve received:

• Fancy lie-flat business class seat to South America by transferring Amex Membership Rewards® points to Delta: 16 cents per point
• Suite at the 5-star Andaz Maui by transferring Chase Ultimate Rewards® points to Hyatt: 4 cents per point
• Domestic short-haul economy flight booked through the Chase Travel Portal: 1.25 cents per point
• Five-night stay at the Waldorf Astoria Maldives by transferring Amex Membership Rewards® points to Hilton: 3.8 cents per point

Because the redemption values are so vast (as you can see), calculating the average value of a credit card mile is sort of a waste of time.

However, a good rule of thumb is to strive to redeem them for at least more than 1 cent each. If you aren’t routinely achieving that goal, you’re better off collecting cash back instead. You’re always absolutely certain to receive 1 cent per cent!

Similar to credit card miles, the value of your airline miles depends on how you redeem them. You’ll generally get the best value for your miles by booking international business or first-class seats. Some of these fares cost more than $10,000 in cash.

Here are a couple of examples to illustrate the point:

• You can fly round-trip in first class from the west coast to Japan on ANA (a major airline of Japan) for as little as 110,000 Virgin Atlantic points. That same ticket costs over $15,000 in cash — giving you a value of more than 13 cents per point.
• You can fly between Chicago and Dallas on Delta for 10,000 points. The same ticket costs around $180 — giving you a value of 1.8 cents per point.

Now let’s talk about some exceptions to the rule. Southwest and JetBlue price their award seats by the cash price of the ticket. If prices are high, the points price will be high. You can generally expect to receive a value of 1.5 cents per Southwest point and 1.4 cents per JetBlue point.

We’ve already established that travel credit card miles are more flexible and useful than the miles you’ll earn from an airline credit card. So let’s go beyond credit card rewards for a second.

The best travel credit cards usually offer more useful travel benefits than an airline credit card.

For example, you’ll often find trip delay insurance, baggage delay insurance, primary rental car insurance, and much more on a non-airline travel credit card, such as the Chase Sapphire Preferred® Card.

But with an airline card, you’ll often receive airline-specific travel benefits, such as primary boarding, free checked bags, and even airport lounge access. Some airline cards also offer travel protections such as trip delay insurance, but it’s rare.

If you’re not loyal to a specific airline, it’s better to carry a generic travel credit card instead of an airline credit card.

» MORE: Best travel rewards credit cards

With a travel rewards credit card, you’ll earn credit card miles with every purchase, which you can redeem for any future travel purchases on that card. In many cases, you can also transfer those miles to airline and hotel partners for huge value. You can also cash them out if you have no desire to travel.

Frequent flyer miles that you earn when you fly — or by using an airline’s branded credit card — are much more limiting. While some airlines allow you to book hotels and rental cars with your miles, the value is offensively low. The only reasonable way to redeem them is for award flights.

Both credit card miles and airline miles can net you humongous value if you know what you’re doing. If you desire (nearly) free travel, we recommend that you collect travel credit card rewards. You can transfer them to a variety of airlines, so you’re not pigeonholed into booking with one specific airline.