Points, miles and cash back

Cash back

The simplest kind. You earn a percentage of what you spend, paid out as a statement credit or a deposit. A dollar is a dollar, and there’s nothing to work out.

Bank points

Banks’ own programs, like American Express Membership Rewards, Chase Ultimate Rewards, Citi ThankYou points, Capital One miles and Bilt points, are the most flexible. You can usually use them for cash or for travel booked through the bank, or move them to the bank’s airline and hotel partners.

Airline miles and hotel points

Airline and hotel cards earn one program’s currency, like Delta SkyMiles or Hilton Honors points. They’re only useful with that airline or hotel and its partners, but these cards often add perks like a free checked bag, a yearly free night or elite status.

What a point is worth

There’s no fixed value. Used for cash or a statement credit, bank points are usually worth about 1 cent each or a little less, depending on the program. Moved to an airline or hotel, the same points can be worth more on some bookings and less on others.

To check a booking, divide the cash price by the points it costs. A $600 flight for 40,000 points works out to 1.5 cents a point. If that beats what you’d get in cash, the points are doing well.

Mistakes that waste them

• Moving points before you need to. A transfer to an airline or hotel usually can’t be undone. Move points only when there’s a seat or a room ready to book.
• Letting them expire. Bank points generally last as long as the account is open. Some airline and hotel programs expire points after a stretch with no activity.
• Closing the card first. Points can disappear when the account closes. See keep, downgrade or cancel?
• Spending them on shopping. Paying with points at checkout or for gift cards often gets you less per point than cash or travel.