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How to Compare Different Types of Credit Card Rewards

September 13, 2021 GMT

NEW YORK - September 13, 2021 - ( )

iQuanti: When it comes to shopping for a credit card that’s right for you, there are a number of factors to compare and research such as annual percentage rate (APR), fees, interest rates, and more, including the kind of rewards the credit card offers.

There are three different types of credit card rewards: points, miles, and cash back. While you typically need a higher credit score to get the best rewards offers, credit card companies provide a variety of options when it comes to what the rewards are and how much you can earn.

Here’s some information about the different types of credit card rewards and tips for how to compare credit cards and choose the right card for you.

Different types of credit card rewards


Rewards cards let you earn points, miles or cash back on purchases made with the card. You can earn the same amount of rewards on each purchase, or you may get bonus rewards on certain categories or during particular times of the year. The type of reward you earn depends on the card you have.


Rewards points are earned when you make purchases in certain categories, such as dining, travel, gas, groceries and more. You’re able to earn points for dollars spent, such as 1 point per $1, or 2-5 points per $1 depending on the category and card. Then, you can redeem your points for cash, gift cards, statement credits, or travel rewards.


Miles are often earned with travel-related purchases, especially with travel credit cards or airline-branded cards. When you make eligible purchases with the card, you can earn miles for every dollar spent. Then, after earning enough miles, you can redeem them for airline tickets or other airline purchases.

Cash Back

Most cash back cards offer at least 1% cash back for all purchases, though some may also offer 2-5% on bonus or special eligible purchases or categories. This percentage can be earned and accumulated through each billing cycle, and may be redeemed for a statement credit, credit for online purchases, or gift cards.

What to consider when comparing credit card rewards

While rewards can be tempting, there are a few things to keep in mind when shopping for the best card for you.

  • If you don’t have great credit, you may not be eligible for the card you want just yet. Instead, consider a student credit card or a secured card, which can help you build or rebuild your credit while still earning rewards.
  • Rewards cards should only be used when you can afford to pay off the balance each month, on time and in full. Interest rates for these cards are often higher than the rewards rate, so you could end up owing more in interest than you’re earning in rewards.
  • Read the rules. Many rewards programs have rules about when you’re allowed to redeem rewards, what you can use the rewards on, and other stipulations. Make sure you choose a card without too many restrictions that make it difficult to use the rewards you’ve earned.
  • Think about how you’ll use rewards. If you travel often, a card that earns you miles may be more beneficial. Or, you may find points earned for purchases outweighs another card’s cash back percentage. Think about what you’d redeem cash or points for to understand what percentage or redeemable offerings are best for you.

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Original Source: How to Compare Different Types of Credit Card Rewards