 TITLE: Credit Card Miles and Points: How Do They Work? CONTENT: ### Hotel Loyalty Programs\nIf you have a hotel-branded credit card, you'll earn points instead of miles, but the idea is still the same.\nFor example, the Hilton Honors American Express Surpass® Card for a limited time, earns 130,000 Hilton Honors bonus points after $2,000 in eligible purchases are made within the first 3 months of card membership. Plus, you can earn an additional 50,000 Hilton Honors bonus points after you spend a total of $10,000 in purchases on the card in the first 6 months. The annual fee is $95. Earn 12 bonus points per dollar on eligible charges directly with a Hilton hotel or resort; 6 points per dollar at U.S. restaurants, U.S. supermarkets and U.S. gas stations; and 3 points per dollar on other eligible purchases. Terms apply.\nWhen it comes to redeeming those points, however, you may be limited to what Hilton allows, including:\n*   Hotel stays\n*   Experiences\n*   On-property rewards\n*   Shopping and dining\nThe same goes for other hotel loyalty programs, though the rewards rates and redemption options may differ from program to program.\n### General Travel Credit Rewards Programs\nIn addition to airline and hotel rewards programs, some credit card issuers have their own proprietary program.\nA few credit cards that offer this type of rewards program include the Capital One Venture Rewards Credit Card and the Chase Sapphire Preferred® Card. With the former, you'll earn 2 miles for every dollar spent, and the latter offers 3 points per dining, 2 points per dollar on travel and 1 point per dollar on everything else.\nYou can redeem your points or miles with these programs for a wide variety of travel purchases, including airfare, hotel stays, rental cars, cruises, travel agents and more. Depending on the card, you can redeem your points or miles by:\n*   Booking travel directly through the rewards program's online platform.\n*   Booking travel with your card at any eligible third-party travel merchant, then using your points or miles to get a statement credit for the purchase.\n*   Transfering your points or miles to an airline or hotel rewards programs and redeeming them for free flights or hotel stays directly with the loyalty program.\nIn some cases, you can even redeem miles for cash back instead of travel.\nHow Much Are Credit Card Points and Miles Worth?\n------------------------------------------------\nThe value for credit card points and miles varies based on the rewards program it belongs to and which credit card is in your wallet.\n### General Travel Points and Miles\nWith general travel credit card miles, for example, you'll get a set value—generally, 1 point or mile is worth 1 cent when you redeem them for free travel.\nFor instance, if you have 50,000 Capital One Venture Rewards Credit Card miles, they are worth $500 in travel.\nWith some credit cards, including the Chase Sapphire Reserve®, your points are worth 50% more (1.50 cents each) if you redeem them for travel through Chase Ultimate Rewards than if you were to use them to get cash back or gift cards.\nThe advantage of this structure is that you always know exactly what your points or miles are worth, and you don't have to worry about running the numbers every time to determine whether you're getting a good redemption value.\nOn the flip side, when you have a flat redemption rate, there's no opportunity to maximize the value of your rewards.\n### Airline Miles and Hotel Points\nIf you have points or miles with a specific airline or hotel loyalty program, however, their value can fluctuate based on how you redeem them. You can typically get more value, for instance, if you use Delta SkyMiles to book a free flight instead of shopping for merchandise in the SkyMiles Marketplace.\nEven if you're booking a free flight or hotel stay, however, the value of your rewards currency can vary based on the current cash price of the booking and other factors.\nCredit card rewards websites will occasionally run the numbers to provide average values for each point or mile you'd earn with various rewards programs. As of November 2019, according to The Points Guy, Delta SkyMiles are worth, on average, 1.2 cents each, while American Airlines AAdvantage miles will net you 1.4 cents apiece.\nThis means that if you have 50,000 miles with both programs, your balance would be worth roughly $600 with Delta and $700 with American Airlines, according to those calculations.\nWith hotel rewards programs, the contrast can be stark. World of Hyatt points, for instance, are worth 1.7 cents apiece on average, while Hilton Honors points give you just 0.6 cents each. So if you have 50,000 points with both programs, they're worth $850 with one and $300 with the other.\nOf course, these are averages. The value of your points or miles can vary depending on when you book your free award flight or hotel stay, where you're headed, whether you're flying coach or first class, or if booking a higher-category hotel versus a lower one.\nThe benefit of having a dynamic pricing structure is that it provides opportunities to get much more than the average value for your rewards. For example, we found a business class flight on Delta from Salt Lake City to Vienna for 98,000 miles and $123.05 in taxes and fees. If you were to book a similar itinerary using cash, you'd pay $5,417.55. That gives your miles a value of 5.4 cents each, which is far more than the 1.2 cent average.\nNote: To calculate point or mile value, subtract the taxes and fees on the award ticket from the cash price, then divide the difference by the number of points or miles to book. In this case, subtract $123.05 from $5,417.55 to get $5,294.50. Then divide that number by 98,000 to get 0.054, or 5.4 cents.\nThat said, it's important to keep in mind that not all redemptions are above-average. If you're not careful, you could get subpar value from your points or miles. Also, rewards earned with airline or hotel rewards programs can lose value over time if the airline or hotel brand makes changes to its loyalty program.\nHow to Earn More Miles and Points on a Credit Card\n--------------------------------------------------\nCredit cards offer several opportunities to maximize the number of points or miles you're earning, regardless of which rewards program you have. Here are some ideas to consider.\n### Apply for a New Card\nMany credit cards offer big sign-up bonuses as an incentive for consumers to apply. For example, the Chase Sapphire Preferred® Card offers 100,000 bonus points after you spend $4,000 in the first 3 months—that's worth $1,250 in travel when booked through Chase Ultimate Rewards.\nThe Capital One Venture Rewards Credit Card offers 60,000 miles when you spend $3,000 in the first 3 months.\n### Use Your Card Whenever Possible\nIn addition to an intro offer, rewards credit cards also offer points or miles on every purchase you make. So plan to use your card whenever you can to rack up rewards quickly.\nKeep in mind, too, that some cards offer bonus rewards on certain spending categories. As you're looking for your next card, think about the areas where you spend the most and consider getting a card that offers extra points or miles on those purchases.\n### Use Other Methods\nIf you're looking to rack up miles with a specific airline or hotel loyalty program, you can also earn them in other ways. For example, some brands have online shopping portals that provide bonus miles on purchases with select retailers. Simply visit the airline or hotel shopping portal, click through to the retailer's website and make your purchase as usual.\nSome rewards programs also have dining rewards programs. With these, you simply register any credit or debit card and use it at one of the program's participating restaurants, and you'll get the promised rewards. You may even get bonus rewards for using the program more regularly.\nUse Credit Cards Responsibly to Improve Your Credit History\n-----------------------------------------------------------\nChasing points and miles isn't a bad thing, but it can backfire if you're not careful. It's always a good idea to avoid spending more than you can pay in full each month. Rewards are nice, but if you're paying interest, it'll likely neutralize their value.\nAlso, try to keep your balance relatively low. Your credit utilization rate—your balance divided by your credit limit—is an important factor in your credit scores, and it's best to keep it under 30% at all times.\nAs you use credit cards to earn points or miles, check your credit score regularly to make sure you're on track to building or maintaining a good or excellent credit history. Not only will a good credit score make it easier to get approved for more rewards credit cards in the future, but it can also save you money and provide peace of mind in so many other ways. END