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How Credit Card Rewards Work in the US: Cash Back, Points and Miles

By PointsExplainedLast reviewed

Decide how you will redeem

If you want simplicity, cash back has an explicit dollar value. If you plan to book flights or hotel stays, look up the airline's or hotel's own award prices before choosing a points or miles card, because the partner sets what an award costs.

Work out a value per point

Divide the cash price of a redemption you would really make by the points it costs. Compare that with the cash-back alternative rather than relying on a headline earn rate.

Read the rewards terms

Check what happens to your points if you close the card, whether they expire and whether there is a minimum redemption. In its complaint analysis, the CFPB found consumers losing rewards when an account closed or through expiration policies, and noted that companies might impose minimum requirements for redemption.

Redeem on a regular cycle

Because issuers and partners can change redemption values, earning and redeeming regularly limits how much of your balance is exposed to a devaluation.

Where this comes from

Sources

The documents this guide relies on. If one has changed since we read it, the document is right and this guide is out of date.

  1. CFPB - Credit Card Rewards Issue Spotlight (May 2024)

    Three primary reward types (cash back, miles, points) and how each is redeemed; value of rewards currencies set by issuer or merchant partner and can often fluctuate; point typically estimated by major issuers at about $0.01; many of the largest issuers reserved the right to change rewards programs at any time, for any reason and in many cases without notice, in terms typically separate from the cardholder agreement; four complaint themes; rewards vanish when an account closes and are revoked through expiration policies; companies might impose minimum requirements for redemption; rewards as an issuer expense, interchange reported net of rewards, annual fees and merchant-funded offers; sign-up bonuses as the most common promotional reward and almost one in ten reward dollars.

    files.consumerfinance.gov · Accessed
  2. American Express - Membership Rewards Program Terms and Conditions (Last Updated: September 2026)

    Redirects to the Membership Rewards Program Terms and Conditions PDF (Last Updated: September 2026). Value of points varies according to how you use them; American Express may change points earned, points required to redeem, and cancel rewards or the program, with at least 90 days' notice of program cancellation; all points lost immediately on cancelling or unenrolling the last linked product, with a 90-day window for New York Card Members.

    americanexpress.com · Accessed
  3. Chase - How to transfer points through Chase Ultimate Rewards

    Chase states that how much points are worth can vary based on how you redeem them.

    chase.com · Accessed
  4. CFPB - Can my credit card company change the terms of my account?

    You might not receive 45 days' advance notice of changes to card benefits such as points or cash rewards.

    consumerfinance.gov · Accessed
  5. CFPB - What is a credit card interest rate? What does APR mean?

    On most cards you can avoid paying interest on purchases by paying the balance in full each month by the due date.

    consumerfinance.gov · Accessed
Questions

About this guide

Is cash back or points better?

Neither is better in general. Cash back has an explicit dollar value. Points and miles are worth whatever the redemption you choose saves you, and the CFPB notes their value is set by the issuer or partner and can often fluctuate. Compare the value per point you would realistically get with what a cash-back card would pay.

Can my card issuer change my rewards after I've earned them?

Many programs' terms allow it. The CFPB found that many of the largest card issuers reserved the right to change their rewards programs at any time, and American Express's Membership Rewards terms, for example, say it may change the number of points required to redeem. The CFPB says you might not receive notice 45 days in advance about changes to benefits such as points or cash rewards.

Do I lose my points if I close my card?

You can, so check your program's terms first. American Express says you immediately lose all the points in your rewards account if you cancel or unenroll your last linked card or other product (Card Members with a New York billing address get 90 days to use them), and the CFPB found consumers reporting that points, cash back and miles vanished when an account closed.
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