Guide
Cash Back vs Points: Which Credit Card Rewards Are Worth More?
Cash back or points and miles? What a point is worth in cents for each major program, and which kind of card earns more on typical spending.
Cash back vs points: the difference
Cash back cards pay a percentage of what you spend as a statement credit or deposit. 2% back on $1,000 is $20, always. Points and miles cards pay in a currency the issuer or a hotel or airline controls, and what a point buys depends on how you spend it.
That makes points cards look bigger on paper ("3X points!") without necessarily being worth more. 3X points worth 0.7 cents each is 2.1% back, barely more than a flat 2% card.
How much is a credit card point worth?
These are the cash values CardFit uses for every ranking: what a point reliably gets you without transfer-partner tricks. Expert travelers can do better; most people do worse.
| Program | Value per point | 10,000 points |
|---|---|---|
| Airline miles | 1.1¢ | $110 |
| Chase Ultimate Rewards | 1.0¢ | $100 |
| Amex Membership Rewards | 0.8¢ | $80 |
| Citi ThankYou | 1.0¢ | $100 |
| Capital One miles | 1.0¢ | $100 |
| Bank of America points | 1.0¢ | $100 |
| Wells Fargo Rewards | 1.0¢ | $100 |
| U.S. Bank points | 1.0¢ | $100 |
| Discover Miles | 1.0¢ | $100 |
| Program | Value per point | 10,000 points |
|---|---|---|
| Hilton Honors | 0.5¢ | $50 |
| Marriott Bonvoy | 0.7¢ | $70 |
| IHG One Rewards | 0.5¢ | $50 |
| World of Hyatt | 1.5¢ | $150 |
| Wyndham Rewards | 0.8¢ | $80 |
| Choice Privileges | 0.6¢ | $60 |
How we chose these, and what we leave out, is on how CardFit ranks credit cards.
Which earns more on typical spending?
On the same spending profile ($2,600/month: $500 groceries, $400 dining, $200 gas, $300 travel, $1,200 everything else), after fees:
| Type | Card | Annual fee | Yearly value |
|---|---|---|---|
| Cash back (any) | Wells Fargo Active Cash Credit Card | $0 | $624 |
| Flat-rate cash back | Wells Fargo Active Cash Credit Card | $0 | $624 |
| Points and miles | Bank of America Premium Rewards Credit Card | $95 | $674 |
At these point values the top travel card comes out $50 ahead, but only if you redeem at full value. Redeem for statement credits or gift cards and many programs pay less.
How to choose
- Choose cash back if you want simplicity, don't travel much, or know you won't spend time on redemptions. Start with best cash back credit cards or best flat-rate cash back cards.
- Choose points if you travel a few times a year and will book through the program or its partners. Compare on best travel credit cards.
- Choose a hotel or airline card only if you're loyal to that brand: its points are worth the least anywhere else.
Questions people ask
Is cash back or points better?
For most people, cash back: it's worth exactly what it says, and on typical spending the top cash back card (Wells Fargo Active Cash Credit Card, $624 a year) is competitive with the top travel card (Bank of America Premium Rewards Credit Card, $674). Points win if you redeem them for travel at full value.
How much is 1 credit card point worth?
Most bank points (Chase Ultimate Rewards, Citi ThankYou, Capital One miles) are worth about 1 cent each. Amex Membership Rewards about 0.8 cents, and most hotel points 0.5 to 0.8 cents, at simple redemptions.
How much is 10,000 points worth?
About $100 for most bank programs at 1 cent per point, $80 for Amex Membership Rewards, and $50 to $80 for most hotel programs.
Can I convert points to cash?
Usually, as a statement credit or deposit, but often at a lower rate than for travel. Some programs pay less than 1 cent per point for cash, so check before you redeem.