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How do Credit Card Points Work?

You can earn credit card points, normally worth 1 cent each, when you spend money with a points credit card.

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Credit cards can offer different types of rewards, ranging from cash back to points or miles. Typically, travel, airline miles and sometimes even hotel credit cards earn points or miles -- though some other cash-back credit cards may also accrue rewards as points. And while points are generally worth the most if you redeem them for travel -- some cards offer flexible rewards points that can be redeemed for options like statement credits, gift cards and more.

Before you start earning credit card points, you’ll want to compare reward types to determine which one might suit you best. We’ll explain the differences between rewards programs, learn how to earn credit card points and ways to get the most from your points credit card over time. 

What’s the difference between points, cash back and miles?

Before you sign up for a rewards credit card, you first need to understand the types of points available and how they can typically be redeemed. The chart below provides an overview, but you should keep in mind that credit card programs vary in terms of their redemption options and values.

Reward typeTypical redemption optionsAverage valuesExample cards
Cash backCheck in the mail 
Statement credits
Direct deposit
Select retailers 
Gift cards
Usually 1 cent per dollar or pointChase Freedom Unlimited®
Wells Fargo Active Cash® Card
Airline milesAirfare 
Rental cars
Seat upgrades to a premium cabin
Airport lounge membership
0.7 to 3 cents per mile, depending on the transfer**Southwest Rapid Rewards® Priority Credit Card 
Delta SkyMiles® Gold American Express Card
Hotel loyalty pointsHotel stays
Suite upgrades
0.4 to 2.1 cents per point, depending on the property**Hilton Honors American Express Card
Marriott Bonvoy Boundless® Credit Card*
PointsStatement credits
Direct deposit 
Gift cards 
Merchandise Travel
.06 to 1 cent, depending on how they’re redeemedChase Sapphire Preferred® Card 
American Express® Gold Card
**Valuations are based on our sister-site Bankrate’s calculations.

How to earn credit card points

Once you get approved for a credit card that earns points, you can start earning points each time you swipe. You’ll earn points for each dollar you spend, and some cards offer higher points earnings for certain spending categories. Remember to avoid overspending or making purchases you typically wouldn’t have for the sake of earning rewards.

Your rewards rate determines your results

How much you earn in credit card points depends on the card you chose more than anything else. How one card earns points might be different from another, depending on the rewards rate.

For example, some credit cards -- like the Citi Double Cash® Card -- offer a flat rate for each dollar spent, no matter what kind of purchase it was. Meanwhile, others -- like the Wells Fargo Autograph℠ Card -- offer more rewards in bonus categories and a lower rewards rate for other purchases.

Welcome bonuses can provide extra rewards

Most rewards credit cards also offer a one-time welcome bonus you can earn if you meet a minimum spending requirement. For example, the Citi Strata Premier℠ Card earns 70,000 points after you spend $4,000 on purchases within three months of account opening.

Bonuses like that are worth earning if you can meet the minimum spending requirement with regular purchases and bills. Doing some upfront math can also help you decide. With the Citi Strata Premier, for example, you would need to be able to charge at least $1,334 per month (on average) for the first three months of account opening to earn the bonus. Don’t overspend in order to earn a card’s welcome bonus. If you can’t earn it through your normal spending habits, any additional spending you do will cut into what you earn.

Travel credit cards like the Citi Strata Premier tend to have larger welcome bonuses than rewards credit cards, like the Wells Fargo Autograph. Travel credit cards generally have annual fees as well, which can translate into better perks and higher rewards.

It’s possible to boost your rewards for certain purchases 

You can earn more rewards or special discounts with certain retailers through credit card issuer shopping portals.

For example, American Express credit cards come with Amex Offers -- a program that lets you earn cash back, extra points or discounts when you make an eligible purchase with your card. To qualify, all you have to do is browse these offers, add the ones you like to your card and make eligible purchases per the terms of the offer. You can do so using Amex’s app.

Many rewards credit cards also offer shopping portals that let you earn more points when you “click through” before making a purchase with an eligible retailer. Examples include AAdvantage eShopping and the Chase Ultimate Rewards shopping portal.

How to get the most from your credit card points

Using your rewards credit card for as many purchases as you can will inevitably help you earn more points or miles over time. But again, avoid overspending. 

Consider these additional tips to get more value from whatever type of rewards points you have.

  • Pair rewards credit cards to earn more points. For example, you can pair a flat-rate cash back credit card with no annual fee with a card that earns more points in bonus categories. Use the bonus category card for purchases that earn more points overall, then switch to the flat-rate cash-back card for everything else.
  • Redeem cash back for statement credits or direct deposits, but don’t forget to check gift card options. If you are earning cash back specifically, your best redemption options are likely going to be statement credits or direct deposits into your bank account. However, some programs offer gift card redemptions at a rate of more than one cent per point, at least for special promotions.
  • Use point transfers to airlines when you can. If you have a travel credit card that earns flexible points, you’ll typically get the best value if you transfer your points to airline or hotel partners. That said, you can also compare the redemption value you would get if you booked a similar flight through the credit card programs’ travel portal. To find out how much your points are worth, divide the dollar cost by the number of points needed to fund the trip.
  • Never carry a balance on your credit card. You’ll only “get ahead” with credit card points if you pay your credit card bill in full each month and avoid carrying a balance. The average credit card APR is above 20%, and interest charges can add up quickly and will cut into any rewards you earn.

How to figure out how much your points are worth

Generally speaking, your credit card issuer will tell you how much your points or cash back are worth when you redeem. At the very least, they will give you a general range for various redemption options. For example, American Express lays out its redemption values very clearly.

If you can’t find the information you need and you’re curious how much a redemption is worth, a little math can go a long way. If you’re being asked to redeem 2,500 points for $25 in gift cards, for example, you’re getting one cent per point in value (25 / 2,500 = 0.01).

The same simple math applies if you’re being asked to redeem 40,000 points for a hotel stay that would cost $200 in cash. In that scenario, you’re getting 0.5 cent per point ($200 / 40,000 = 0.005).

If you’re trading 30,000 airline miles plus $6 in airline taxes and fees for a $400 flight, you’ll want to subtract the airline taxes and fees to find the points value. In this scenario, you would be getting around 1.3 cents per mile in value (($400 – $6) / 30,000 = 0.013).

The bottom line

The way your rewards points will work depends on the credit card you sign up for and the redemption options it offers. For example, there are credit cards that only earn cash back, whereas there are others that earn miles with an airline or hotel loyalty points instead, while points can be used for a range of redemption options with varying values.


With all this in mind, it makes sense to thoroughly research rewards credit cards before you apply. Choose the card that best fits your spending habits and offers the redemption options that attracts you the most.

*All information about the Marriott Bonvoy Boundless Credit Card has been collected independently by CNET and has not been reviewed by the issuer.

The editorial content on this page is based solely on objective, independent assessments by our writers and is not influenced by advertising or partnerships. It has not been provided or commissioned by any third party. However, we may receive compensation when you click on links to products or services offered by our partners.

Holly Johnson is a credit card expert and writer who covers rewards and loyalty programs, budgeting, and all things personal finance. In addition to writing for publications like Bankrate,, Forbes Advisor and Investopedia, Johnson owns Club Thrifty and is the co-author of "Zero Down Your Debt: Reclaim Your Income and Build a Life You'll Love."
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