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Guide to Understanding Credit Card Miles

Guide to Understanding Credit Card Miles
Jason Steele
Jason SteeleUpdated January 9, 2023
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Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.
Credit card miles can save you money on travel. They may help you pay for all or part of a trip, and they can be a great credit card perk. However, if you’ve never used them, you might be wondering, how do credit card miles work? Read on to learn how to use and make the most of credit card miles.

What Are Credit Card Miles?

Credit card miles are a type of rewards currency or benefit that you earn for spending money with certain credit cards. The more you spend on one of these credit cards, the more miles you might earn. Once you’ve accumulated enough miles, you can redeem them.Some credit cards let you earn bonus miles for certain types of purchases, like hotels or airfare. You can redeem credit card miles for travel-related expenses as a credit on your statement, or you can transfer them to hotel or airline partners, depending on the credit card.

How Do Credit Card Miles Work?

How do miles work on credit cards? When you use a credit card that earns miles, you earn those miles as a percentage of your spending on the card. With most major travel rewards cards, you can earn at least one mile per dollar spent. Some credit cards allow you to earn more for certain types of purchases. The rate of miles earned per dollar varies by credit card. On average, each airline mile is  worth $0.01. The value can be higher or lower, depending on the card. Each credit card rewards program also has different ways to redeem miles, which might also affect their value.  

What Types of Credit Cards Earn Miles?

There are two types of credit cards that earn miles: co-branded airline credit cards and general travel credit cards.Some credit cards are co-branded with airlines. With a co-branded credit card, you earn extra or bonus miles on purchases made with that airline. Miles earned with these credit cards can typically only be used for travel with that particular airline. Co-branded airline cards may also give you additional perks like priority seating or free checked bags.General travel credit cards typically allow you to earn miles for any purchases made with them. When using a credit card like this, the miles can then be redeemed for a variety of travel expenses, including flights, hotels, transportation, or even tours. Some of the best travel credit cards have a variety of partners, including different airlines, so that you can convert your credit card miles into airline miles. If you make travel-related purchases with one of these cards, you may earn extra points. 

Tips for Earning Credit Card Miles

One of the benefits of credit cards is earning miles, and there are a variety of ways to do it. While most credit cards require you to spend money, there are other ways to earn credit card miles as well. Here are some top tips for earning credit card miles.

Get the Right Card for You

The most important tip for earning miles with a credit card is to get a card that fits your needs, spending habits, and criteria. For instance, don’t get a co-branded airline card if you rarely fly that airline. If you don’t have loyalty to a particular airline or hotel, it might make sense to get a general travel credit card. If you like to travel in style and enjoy perks, you might want to consider one of the top rewards credit cards

Refer Friends

Some credit cards offer referral bonuses if you get a friend or family member to apply for the card. Usually the way referral bonuses work is that you refer a friend or relative to the credit card via a special link from your card issuer. Once the other person has signed up and been approved for the card, you will receive a certain amount of miles for the referral. 

Look for Sign-up Bonuses

Sign-up bonuses are popular incentives to get people to apply for a new credit card. Typically, applying for a credit card with a sign-up bonus allows a new card owner to earn a large number of miles at once. To qualify for the sign-up bonus, you usually have to meet a specific spending minimum within a certain time frame after getting the card. Of course, you should not overspend or stretch your budget just to earn a sign-up bonus. 

Maximize Bonus Category Spending

Some credit cards have certain categories of spending, like travel or dining, that reward you with bonus points. When you use the credit card to make purchases in these bonus categories, you will earn additional points beyond the typical one point per $1 of spending.

Take Advantage of Everyday Spending

Make sure you are using the best credit card for each transaction. Some of the top credit cards will help you do that. For example, if you are buying a flight, you should put that expense on a co-branded airline credit card or a card that earns extra miles for travel. Recommended: How to Choose a Credit Card 

Tips for Redeeming Your Credit Card Miles

Like redeeming credit card rewards, redeeming credit card miles can be different depending on the credit card and the program. Here are some strategies that may help you optimize your miles.

Be Flexible

When traveling, if you can be flexible with your travel dates, you can often find cheaper flights that will cost you fewer miles. This makes your miles go farther.  

Book in Advance

Booking flights at the last minute is often more expensive than booking them months in advance. Looking into flights ahead of time means it’s more likely that you can choose one that requires fewer miles. 

Check Out Travel Partners

Some airlines have other airlines that they partner with. You may be able to redeem miles with an airline partner if they have a cheaper cost. 

Look Into Transfer Partners

If you can, choose a credit card that earns transferable miles, which means you can transfer your credit card miles to a variety of airline or hotel partners. That way, instead of being limited to one airline or hotel, you’ll have a number of different ones to choose from to help find the best option at the best price. 

Do Your Research

It’s always important to explore the options and do your research before redeeming any credit card miles. Make sure you are getting the best value possible for your miles and finding the lowest price for your trip. Recommended: Credit Card Points vs. Cash Back: Understanding the Key Differences

Credit Card Miles vs Frequent Flyer Miles

Although they sound similar, credit card miles and frequent flyer miles are different. Frequent flyer miles are miles that you earn toward free flights with an airline or its participating partners. Here are the key differences between the two:
Credit Card MilesFrequent Flyer Miles
Earned by spending money with the credit cardEarned through an airline loyalty program
Credit card may come with an annual feeFree to join
Miles can typically be used in a variety of waysMiles must be used with that airline or a partner airline
Usually have a fixed value-per-mile rateMay be subject to black-out dates

The Takeaway

Credit card miles can potentially save you a lot of money on travel costs. Typically, the more money you spend with a credit card with miles, the more miles you’ll earn and be able to redeem for travel. If you are thinking about applying for a credit card that earns miles, Lantern by SoFi can help. With Lantern you can quickly and easily compare rates and terms to find the best option for you.

Frequently Asked Questions

Are all credit card miles worth the same amount?
How many miles do I need to pay for a flight?
Are credit card miles the same as frequent flyer miles?

About the Author

Jason Steele

Jason Steele

Jason Steele has been writing about credit cards and award travel since 2008. One of the nation's leading experts in this field, he has contributed to dozens of personal finance and travel outlets and has been widely quoted in the mainstream media.
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