The world of earning and burning credit card miles has an undeniable appeal. However, figuring out how credit card miles work can have you falling into a rabbit hole of bonus offers and travel portals.
Before you go click-happy with applying for travel credit cards, it’s important to know how miles work on credit cards. That way, you can make a solid choice in your travel cards, and make the most of your miles. We’ll share the ins and outs of credit card miles, including how they work, how much they’re worth, how to earn miles with a credit card, and how to use credit card miles.
What Are Credit Card Miles?
So, what are miles on a credit card? In short, they’re a way for credit card issuers to reward you for using their card to make purchases.
Typically, the more you spend, the more miles you rack up. Depending on the card, you can rack up a higher number of points when booking travel on certain airlines or in certain categories.
Aside from redeeming miles to cover the cost of flights, you might be able to use credit card miles for hotel reservations, ride shares, or car rentals. Many credit cards also allow you to redeem your miles for cash back, gift cards, or online purchases with partnering retailers. If it’s an airline-branded credit card, you might also be able to use your miles for upgrades, free checked bags, and in-flight purchases.
Credit Card Miles vs Frequent Flyer Miles
Credit card miles and frequent flyer miles are customer loyalty incentives that both offer ways to earn miles to redeem for free flights.
Most major airlines have a frequent flyer program. Signing up for a frequent flyer account is usually free, and it allows you to earn miles when you book with that particular airline. Depending on the program, you can also use those miles for travel perks, such as seat upgrades, priority boarding, and free in-flight purchases.
With credit card miles, on the other hand, you earn miles when you make purchases on your credit card. Unlike with frequent flyer miles, you don’t have to make these purchases with a particular airline in order to earn credit card miles. However, you will have to apply for a credit card and get approved to get those miles.
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How Do Miles Work on Credit Cards?
A credit card will reward you with miles when you spend a certain amount on the credit card. Often, cards will offer one mile per dollar spent, though this can vary depending on how a credit card works. In turn, you can redeem these miles for a free flight or other perks.
Some credit cards offer bonus miles for spending in different categories, allowing you to earn more than the standard mile per dollar. For instance, if you use your credit card at restaurants during certain months of the year, you could receive three miles per dollar spent, instead of the usual one mile per dollar.
As for the redemption value (or how much a point is worth in booking flights), that’s worked out between the airline and the credit card issuer. If the redemption value is 1 cent per mile, for instance, you’d need 40,000 miles to cover a $400 flight.
How Much Are Credit Card Miles Worth?
How much credit card miles are worth depends on several factors, including the redemption value, whether you’re booking through a travel portal, and the particular credit card. But typically, each mile is worth 1 cent apiece.
The number of points that you’ll need to book a free flight varies. It largely boils down to the redemption value, or how much a point is worth in dollars. As mentioned before, this value is determined between the airline and the card card company. Additionally, the cost of the flight itself will influence how many points are needed.
Some of the major credit card issuers, airlines, and hotels have travel portals where you can redeem your credit card miles for flights, hotel stays, and car rentals. An incentive might be offered to use these travel portals. For instance, your miles might stretch further if you redeem them through the portal. Or, there might be a featured, limited time offer where your miles are worth more if you travel to certain cities or regions.
How to Earn Airline Miles With a Credit Card
Now, we’ll dig into the fun part: how to earn credit card miles. There are a bunch of ways to rack up airline miles. Let’s take a look at the most common avenues.
Spend on the Card
The more you spend on your credit card card, the more miles you’ll earn. Plus, a credit card might offer the opportunity to earn more miles in certain categories (i.e., 5 times more on flights booked through a portal) or in rotating bonus categories.
While it might be tempting to keep spending in order to earn more miles, remain mindful of your credit card limit and avoid racking up too much debt (not to scare you, but here’s a look at what happens to credit card debt when you die).
Sign Up for a New Card
A credit card might feature a generous sign-up offer. If you hit the minimum on the sign-up offer, you could rack up a slew of credit card miles (just make sure you can afford to still pay off at least your credit card minimum payment).
Typically, you’ll need to spend a certain amount within a particular period after opening your account. For instance, if you spend $4,000 on transactions within the first three months of being a new cardholder, you could net 75,000 credit card miles.
Sign-up bonus offers are constantly changing, so it’s a good idea to check what a card’s intro bonus is currently before you apply. Also make sure to weigh factors aside from just a welcome bonus, like whether there’s a good APR for a credit card.
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As a cardholder, you also can earn credit card miles when you refer friends. Often, there’s an affiliate link that you can send to your friends and family members. If they decide to apply and get approved for the card, you’ll earn a referral bonus.
Credit card referral bonuses often have limits though. For instance, a credit card might offer a 20,000 bonus miles per referral, but with a 100,000 limit per year. That breaks down to a maximum of five referrals per year.
How to Redeem Credit Card Miles
Once you’ve racked up credit card miles, you’ll need to redeem them. Let’s take a look at how to do so.
• Credit card’s travel portal: Travel portals usually give you the option to redeem your credit card miles in a number of different ways, such as flights, car rentals, or hotel stays. You might even get a better deal than you would purchasing tickets outside of the portal. Typically you won’t need to provide information, such as your CVV number on a credit card, to redeem your miles.
• Travel-related platform: Besides redeeming credit card miles through a credit card network’s travel portal, some hotel chains offer their own online platforms. You can choose to redeem credit card miles there as well.
• Bundling with a partner loyalty program or frequent flyer program: Some credit cards give you the option to transfer your credit card miles to a hotel, airline, or car rental transfer partner.
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How to Use Credit Card Miles
Perhaps the most obvious way to use your credit card miles is for free flights. However, you may also be able to redeem them for the following benefits as well:
• Seat upgrades
• Priority boarding
• In-flight purchases
• In-airport purchases
• Purchases with specific retailers
• Gift cards
Do your homework and look for ways to get the most out of your miles. For instance, some travel portals give you a higher redemption value. In other words, your credit miles will be worth more and go further, and you’ll get more bang for your buck.
How to Check Your Credit Card Miles Balance
Wondering how many credit card miles you’ve racked up? Here are a couple easy ways to check your balance:
• On your credit card app: You can easily check your credit card miles through the credit card app. Usually, it will also direct you to ways that you can spend your miles.
• On your online credit card account: Once you log onto your cardholder account, you’ll typically find the number of credit card miles you’ve racked up on the dashboard. You can also see a breakdown of how many miles each transaction yielded. This is important to check regularly anyways, in case you need to dispute a credit card charge or request a credit card chargeback.
• By contacting your credit card issuer: You can also reach out to your card issuer over the phone to learn your credit card miles balance. Simply call the number listed on the back of your credit card to speak to a representative.
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Other Types of Credit Card Rewards
Credit card miles aren’t the only reward you can earn from using your credit card. Here are other types of credit card rewards you can swoop in on:
With cash back, you earn back a percentage of eligible purchases made with your card in cash. For example, you might earn 3% cash back, which means you’d get 3 cents back for every dollar you spend.
You can redeem the cash-back rewards you earn in a number of ways, such as a statement credit or as straight cash. However, you might not snag great travel deals like you would with more travel-oriented credit card rewards.
Credit card points offer you a certain number of points for your spending on the credit card. You could get two points for every dollar you spend, for instance. You’ll then be able to redeem those points for a wide range of purposes, though the value of the points can vary depending on the card and how you opt to use your points.
Credit card miles allow you to get rewarded for your spending with your card. You’ll earn miles whenever you make a purchase on your card, and you can then use those miles to cover the cost of flights and enjoy other travel-related perks.
Beyond looking at a credit card’s miles-earning potential, you’ll also want to look at the APR on a credit card, as well as its fees, terms and conditions, and other featured perks. With the SoFi Credit Card, for instance, you can earn cash-back rewards. Plus, travelers will be happy to hear that the card charges no foreign transaction fees.
Is earning credit card miles worth it?
As long as you’re using your credit card responsibly, earning credit card miles to use toward free flights, car rentals, travel perks, and other rewards can potentially help you save.
Which types of credit cards offer airline miles?
Many different credit cards offer airline miles. Usually, travel credit cards or credit cards co-branded with an airline offer additional perks or a greater number of miles earned per dollar.
What are the different types of credit card rewards?
The main types of credit card rewards are miles points, and cash back. Each type of reward has its pros and cons, but they all allow you to earn rewards for your spending on your credit card.
What is the difference between credit card miles and points?
Typically, miles can be used for travel, and they may be tied to a specific airline’s frequent flyer program. Points, however, can be used toward a slew of non-travel related rewards.
Photo credit: iStock/Prostock-Studio
Members earn 2 rewards points for every dollar spent on eligible purchases. If you elect to redeem points for cash deposited into your SoFi Checking or Savings account, SoFi Money® account or fractional shares in your SoFi Active Invest account, or as a payment to your SoFi Personal, Private Student, or Student Loan Refinance, your points will redeem at a rate of 1 cent per every point. If you elect to redeem points as a statement credit to your SoFi Credit Card account, your points will redeem at a rate of 0.5 cents per every point. For more details please visit the Rewards page. Brokerage and Active investing products offered through SoFi Securities LLC, member FINRA/SIPC. SoFi Securities LLC is an affiliate of SoFi Bank, N.A.
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