Should I Get a Credit Card with Miles or Cash Back?

woman holding credit card

There are hundreds of credit cards out there. If you’re on the market for a new one you’ll likely want to choose a credit card that gives you advanced perks. Some credit cards will give you cash back, while other credit cards will offer you miles.

All of this can be beneficial, but you need to decide which credit card is ultimately for you and which will, in the end, help you earn major rewards faster. Here are some of the factors you’ll want to keep in mind when shopping around for the right credit card.

Do You Even Travel?

Everyone can use cash back. So you can’t lose if you go with the cash back card. Your airline miles is a bit different though. While earning miles is nice, do you actually travel? If you don’t, or if you don’t travel by air, the airline miles may not be all that valuable to you. So while earning miles may sound nice, if you’re not much of an avid traveler it may be better to go with the cash back.

What is the Miles to Cash Ratio?

When considering a credit card that rewards you with miles you will need to determine the cash value of the miles. After all, you can use the cash back you receive from a cash back credit card and put it toward eventual airfare. This means for the credit card offering miles to be beneficial it has to offer you a bigger bang for your buck.

Now, determining the cash value of miles will vary some. It will depend on the airline, the flight, and even what kind of seat you’re purchasing. Realistically, you want the cash value of your mile to be about twice that of the cash back. There are available websites that will provide insights on finding out the exact value of miles for specific websites if you’re interested, but if a cash back credit card gives you 2% cash back on everything, you want the miles credit card to reward you with 4% in miles (or four cents worth of airfare for every dollar you spend on the credit card). If the value is similar, just go with the cash back. You’ll have more options and you’ll be able to use the cash back you earn on any airline.

Do Your Airline Miles Expire?

Unless you’re spending thousands and thousands of dollars on your airline credit card every month, it can take a good deal of time to earn enough miles to purchase a desirable flight. Due to this, you need to know if your airline miles expire.

There are two points of interest you’ll need to look here. First, do the earned airline miles expire while connected to your credit card. Some credit cards will allow you to build up “points” for every dollar spent, and then use the points to purchase airline miles (usually this is done with credit card that are not specific to one airline). If the points don’t expire when connected to your credit card, will the actual airline miles expire? For example, United Airlines miles expire, while Delta Skymiles do not. It is important to know this, because you don’t want your hard earned miles to disappear if not used.

The Right Credit Card For You

These are just some of the factors you want to keep in mind when looking around for the right credit card. Beyond miles and cash back though, always look at the interest rate, payment options, and other features of the card beyond benefits. This way, you can select a credit card that not only fits your rewards desires, but your personal financial needs as well.