What Are Credit Card Points? What Are They Worth?

What Are Credit Card Points? What Are They Worth?

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It may not have been reviewed, approved or otherwise endorsed by the credit card issuer. This site may be compensated through a credit card issuer partnership.

Different credit cards offer a variety of points, miles and cash back — all worth varying amounts. Figure out which type of rewards card is best for you based on your preferences and spending habits.

Citi is an advertising partner

If you're not familiar with the credit card points, miles and cashback game, you may be wondering exactly how credit card points work. While it's more straightforward to discern the value of credit cards that offer cashback rewards, some credit cards offer points and miles, whose value can be harder to determine.

You'll want to make note of not only how you can earn rewards, but also how you can redeem them — sometimes cards with great earning rates have limited options when it comes to using your points. In this guide we'll lay out the dos and don'ts of credit card points and offer our recommendations for the best points programs.

What are credit card points?

Credit card points are the rewards users earn with certain credit cards. Although they're often referred to simply as "points," there are multiple types of card "currencies":

  • Points
  • Miles
  • Cash back

It's important to note that 1 point or mile from one card isn't necessarily worth the same as 1 point or mile from another card. This means comparing credit cards and their rewards can be challenging. Here we'll compare the value of points from major credit card issuers and work through how to calculate a credit card's rewards rate.

What are credit card points worth?

The value of credit card points will depend on how they can be redeemed:

  • For example, using points to book travel may result in greater value than redeeming your points for cash back.
  • However, some reward programs' points are worth significantly more when transferred to the program's travel partners.

Two prime examples of this are the Chase Ultimate Rewards® and American Express Membership Rewards programs. These types of points are considered to be worth more because their value can be maximized when transferred to partnering airline or hotel programs.

When you're not a cardholder, finding exact redemption details can be difficult. One option is to call the card issuer and ask for a few examples of how you'd be able to redeem points. The information can also sometimes be found on the issuer's website.

Points calculation equation: To calculate the value of a single point, divide the dollar value of a reward by the points needed to unlock it. For example, if it takes 80,000 points to pay for a $800 airline ticket, the calculation is:

$800 / 80,000 = 1 cent

On average, cardholders can expect to receive about 1 cent per point, though this can vary substantially from card to card.

{"backgroundColor":"ice","content":"\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cstrong\u003EPoints calculation equation\u003C\/strong\u003E: To calculate the value of a single point, divide the dollar value of a reward by the points needed to unlock it. For example, if it takes 80,000 points to pay for a $800 airline ticket, the calculation is:\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cdiv class=\"ShortcodeAlign--root ShortcodeAlign--center\"\u003E\n \u003Cdiv class=\"ShortcodeAlign--container\"\u003E \n \u003Cdiv class=\"ShortcodePullquote--root\"\u003E\n \u003Cp class=\"ShortcodePullquote--text ShortcodePullquote--black\"\u003E\n $800 \/ 80,000 = 1 cent\n \u003C\/p\u003E\n\u003C\/div\u003E\n \u003C\/div\u003E\n\u003C\/div\u003E\n\u003C\/p\u003E\n\n\u003Cp\u003EOn average, cardholders can expect to receive about 1 cent per point, though this can vary substantially from card to card.\u003C\/p\u003E\n\n\u003Cp\u003E","padding":"double"}
Points Earned
Redemption Method
Redemption Total Value
Point Value
10,000Cash Back$1001 cent
10,000Travel$2001 to 2 cents
10,000Gift Card$1001 cent

Credit card points programs compared

To simplify the process of comparing rewards programs, we analyzed the value of credit card points across the major U.S. credit card issuers. Based on our results, Chase Ultimate Rewards® points are worth the most, offering up to 1.5 cents per point with certain cards in the program.

Credit Card Points
Estimated Value Per Point
Chase Ultimate Rewards®
  • 1 to 1.5 cents for travel redemptions
  • 1 cent for cash back
American Express Membership Rewards
  • 0.75 cents to 1 cent for flights, hotels, car rentals, vacation packages or cruises through the Membership Rewards portal
  • 0.6 cents for cashback statement credit
Citibank ThankYou Rewards
  • 1 cent for travel redemptions
  • 0.8 cents for Amazon.com purchases
  • 0.5 to 1 cent for cashback statement credit
Capital One Miles
  • 1 cent for travel redemptions
  • 0.5 cent for cash back

What are the best credit card reward programs?

There are several factors that make one reward program superior to another. The ability to maximize rewards points through transferring to a partner program and flexible redemption options are significant considerations, for example.

Here are our picks for the best credit card reward programs:

Chase Ultimate Rewards®

The Chase Ultimate Rewards® program offers a number of credit cards, both personal and business, that allow for flexible rewards redemption. With this program, you can:

  • Redeem Ultimate Rewards points for travel, gift cards, merchandise and more
  • Transfer Ultimate Rewards points to 10-plus partnering hotel and loyalty programs, including Marriott Rewards, IHG® Rewards Club, United MileagePlus and JetBlue TrueBlue
  • Redeem points for travel through the Ultimate Rewards portal
  • Get up to a 50% bonus on your points through the Ultimate Rewards portal with some cards
  • Redeem points for cash back at a value of 1 cent each (Citi and Amex don’t provide as much value for cash back)

Credit cards that earn Chase Ultimate Rewards®

Earning rate
Annual fee
Chase Freedom Flex℠
  • On Chase's Secure Website
Earn 5% cash back on eligible purchases in rotating categories, 5% on travel purchased through Chase, 3% on dining and drugstores, and 1% on all other purchases.$0
Chase Freedom Unlimited®
  • On Chase's Secure Website
Earn 5% cash back on travel purchased through Chase, 3% on dining and drugstores, and 1.5% on all other purchases.$0
Chase Sapphire Preferred® Card
  • On Chase's Secure Website
5X points on travel purchased through Chase Ultimate Rewards®, 3X points on dining and 2X points on all other travel purchases$95
Show All Rows

American Express Membership Rewards Points

The American Express Membership Rewards program allows cardholders to earn valuable rewards by offering versatile redemption options:

  • You can redeem your Membership Rewards points for travel, gift cards, statement credits and more
  • Travel is worth 1 cent per point at most when you redeem through the Amex travel portal (for most cards)
  • Transfer Amex points to 20-plus travel partners to get the most value (partners include British Airways, Air Canada, and several others)

Credit cards that earn Amex Membership Rewards

Earning rate
Annual fee
The Platinum Card® from American Express
5X Membership Rewards® points on flights booked directly with airlines or with American Express Travel on up to $500,000 on these purchases per calendar year and 5X Membership Rewards® points on prepaid hotels booked with American Express Travel. Terms apply.$695
American Express® Gold Card
Earn 4X Membership Rewards® Points at Restaurants, including takeout and delivery, and earn 4X Membership Rewards® points at U.S. supermarkets (on up to $25,000 per calendar year in purchases, then 1X), and 3X Membership Rewards® points on flights booked directly with airlines or on amextravel.com. Terms apply.$250
American Express® Green CardEarn 3X Membership Rewards® Points on Restaurants worldwide, including takeout and delivery. Additionally, earn 3X Membership Rewards® points on all eligible travel, from subway swipes and window seats to hotel stays and city tours.$150
Show All Rows

Citibank ThankYou Rewards

Similarly to Membership Rewards and Chase Ultimate Rewards®, the Citibank ThankYou Rewards program also offers a number of ways to maximize your rewards points:

  • You can redeem Citi ThankYou points for for travel, gift cards, statement credits and more
  • Travel is worth 1 cent per point at most when you redeem through the Citi travel portal
  • Transfer Citi ThankYou points to over 10 travel partners to get the most value on your rewards (unfortunately, Citi’s travel partners do not include any major airlines for the moment)
  • Redeem your rewards for gift cards at the high rate of 1 cent per point
  • Earn points through banking as well as spending on your credit card, which offers more flexibility to users who don't spend frequently on their card

Credit cards that earn Citibank ThankYou Rewards

Earning rate
Annual fee
Citi Rewards+® Card
  • On Citibank's Secure Website
Earn 2X ThankYou® Points at Supermarkets and Gas Stations for the first $6,000 per year and then 1X Points thereafter. Plus, earn 1X ThankYou® Points on All Other Purchases.$0
Citi Premier® Card
  • On Citibank's Secure Website
Earn 3X points per $1 spent at restaurants, supermarkets, gas stations, air travel and hotels and 1X per $1 spent on all other purchases$95

What is a credit card rewards rate?

A credit card rewards rate is a metric used to determine how rewarding a credit card is for certain purchases. It is most often expressed as a percentage return on every dollar spent.

For example

If a credit card has a flat 2% rewards rate, that means cardholders get a 2% return on every purchase they charge to that card.

A rewards rate is useful because it helps consumers compare points-based rewards credit cards to other cards, including cashback cards. It effectively reduces rewards to a common denominator, which allows for quicker comparison. For example, it may be difficult to know whether a card that awards 3 points per dollar is better or worse than a card that awards 2% cash back. However, if we know the first card has a 2.5% rewards rate, then we can confidently say it is better than a 2% cashback card — assuming all other things are equal.

Rewards rate calculation equation: The rewards rate is equal to the rewards point value times the point-earning rate. Example: Say a credit card earns 2 points per $1 and each of those points is worth 1 cent. The calculation is:

2 x $0.01 = 2% rewards rate

The math gets more complicated if the card offers bonus categories. You’ll need to figure out the amount you’re likely to spend in each of the card’s categories, then combine those amounts to figure out how many points (or how much cash back) you’ll earn on average with the card.


Example: Say a card offers 3 points on dining and 1 point on everything else and its points are worth $0.015 when redeemed for travel. You’re a foodie, so 20% of your credit card spend goes to dining out — you think this card might be a better option than a card that offers 2 points on every purchase. Here’s how you would calculate your average point earnings to decide:

3 x 0.2 = 0.6

1 x 0.8 = 0.8

0.6 + 0.8 = 1.4 points earned per $1 on average

1.4 x $0.015 = 2.1% rewards rate

The card would give you around a 2.1% rewards rate, which barely beats the card that offers 2 points on every purchase. You might be better off going with the flat-rate card, for simplicity’s sake.

{"backgroundColor":"ice","content":"\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cstrong\u003ERewards rate calculation equation\u003C\/strong\u003E: The rewards rate is equal to the rewards point value times the point-earning rate. Example: Say a credit card earns 2 points per $1 and each of those points is worth 1 cent. The calculation is:\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cdiv class=\"ShortcodeAlign--root ShortcodeAlign--center\"\u003E\n \u003Cdiv class=\"ShortcodeAlign--container\"\u003E \n \u003Cdiv class=\"ShortcodePullquote--root\"\u003E\n \u003Cp class=\"ShortcodePullquote--text ShortcodePullquote--black\"\u003E\n 2 x $0.01 = 2% rewards rate\n \u003C\/p\u003E\n\u003C\/div\u003E\n \u003C\/div\u003E\n\u003C\/div\u003E\n\u003C\/p\u003E\n\n\u003Cp\u003EThe math gets more complicated if the card offers bonus categories. You\u2019ll need to figure out the amount you\u2019re likely to spend in each of the card\u2019s categories, then combine those amounts to figure out how many points (or how much cash back) you\u2019ll earn on average with the card.\u003C\/p\u003E\n\n\u003Chr\u003E\n\n\u003Cp\u003E\u003Cstrong\u003EExample:\u003C\/strong\u003E Say a card offers 3 points on dining and 1 point on everything else and its points are worth $0.015 when redeemed for travel. You\u2019re a foodie, so 20% of your credit card spend goes to dining out \u2014 you think this card might be a better option than a card that offers 2 points on every purchase. Here\u2019s how you would calculate your average point earnings to decide:\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cdiv class=\"ShortcodeAlign--root ShortcodeAlign--center\"\u003E\n \u003Cdiv class=\"ShortcodeAlign--container\"\u003E \n \u003Cdiv class=\"ShortcodePullquote--root\"\u003E\n \u003Cp class=\"ShortcodePullquote--text ShortcodePullquote--black\"\u003E\n 3 x 0.2 = 0.6\n \u003C\/p\u003E\n\u003C\/div\u003E\n \u003C\/div\u003E\n\u003C\/div\u003E\n\n\u003Cdiv class=\"ShortcodeAlign--root ShortcodeAlign--center\"\u003E\n \u003Cdiv class=\"ShortcodeAlign--container\"\u003E \n \u003Cdiv class=\"ShortcodePullquote--root\"\u003E\n \u003Cp class=\"ShortcodePullquote--text ShortcodePullquote--black\"\u003E\n 1 x 0.8 = 0.8\n \u003C\/p\u003E\n\u003C\/div\u003E\n \u003C\/div\u003E\n\u003C\/div\u003E\n\n\u003Cdiv class=\"ShortcodeAlign--root ShortcodeAlign--center\"\u003E\n \u003Cdiv class=\"ShortcodeAlign--container\"\u003E \n \u003Cdiv class=\"ShortcodePullquote--root\"\u003E\n \u003Cp class=\"ShortcodePullquote--text ShortcodePullquote--black\"\u003E\n 0.6 + 0.8 = 1.4 points earned per $1 on average\n \u003C\/p\u003E\n\u003C\/div\u003E\n \u003C\/div\u003E\n\u003C\/div\u003E\n\n\u003Cdiv class=\"ShortcodeAlign--root ShortcodeAlign--center\"\u003E\n \u003Cdiv class=\"ShortcodeAlign--container\"\u003E \n \u003Cdiv class=\"ShortcodePullquote--root\"\u003E\n \u003Cp class=\"ShortcodePullquote--text ShortcodePullquote--black\"\u003E\n 1.4 x $0.015 = 2.1% rewards rate\n \u003C\/p\u003E\n\u003C\/div\u003E\n \u003C\/div\u003E\n\u003C\/div\u003E\n\u003C\/p\u003E\n\n\u003Cp\u003EThe card would give you around a 2.1% rewards rate, which barely beats the card that offers 2 points on every purchase. You might be better off going with the flat-rate card, for simplicity\u2019s sake.\u003C\/p\u003E\n\n\u003Cp\u003E","padding":"double"}

A net rewards rate is a slightly more complicated metric that also factors a card's annual fee into the result. Though it is more difficult to calculate, the net rewards rate is the most accurate representation of the value a credit card holds for those who continually use it.

Net rewards rate calculation equation: To calculate the net rewards rate, use the following calculation: (See our example below.)

Amount spent x Points earned per $1 x Points value - Annual fee = Net rewards rate

{"backgroundColor":"ice","content":"\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cstrong\u003ENet rewards rate calculation equation\u003C\/strong\u003E: To calculate the net rewards rate, use the following calculation: (See our example below.)\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cdiv class=\"ShortcodeAlign--root ShortcodeAlign--center\"\u003E\n \u003Cdiv class=\"ShortcodeAlign--container\"\u003E \n \u003Cdiv class=\"ShortcodePullquote--root\"\u003E\n \u003Cp class=\"ShortcodePullquote--text ShortcodePullquote--black\"\u003E\n Amount spent x Points earned per $1 x Points value - Annual fee = Net rewards rate\n \u003C\/p\u003E\n\u003C\/div\u003E\n \u003C\/div\u003E\n\u003C\/div\u003E\n\u003C\/p\u003E\n\n\u003Cp\u003E","padding":"double"}
Amount spent
Points earned
Points value
Annual fee
Net rewards rate
$10,00020,000$200$501.5%
$10,00020,000$250$02.5%
$10,00010,000$200$251.75%

Credit card points vs. cash back

Typically credit cards will offer you rewards in either points or cash back.

If you're looking for simple, high value rewards, cashback credit cards can be a great option. Cashback rewards have a couple advantages:

  • The value is more straightforward. If you get 1% cash back on all purchases made with your card, you know you are getting 1 cent for each dollar that you spend
  • Cash back is easy to redeem. Usually cash back can be redeemed as a statement credit or deposited directly into your checking account.

Points, on the other hand, can be a bit more challenging to quantify, but come with their own advantages:

  • You can redeem points in a variety of ways. You have many more ways you can use your rewards, including travel, gift cards and merchandise (though the latter two often have a terrible value).
  • You can maximize their value. By strategically redeeming your points, you can get a better return than 1 cent per point.
  • You can often transfer points into airline and hotel loyalty programs. Many credit card programs allow you to transfer points to outside loyalty programs. This can be a great benefit if you’re already collecting rewards in a loyalty program account, and often returns the best value on your points.

Bottom line: If you don't travel often or aren't willing to put in the work to use or maximize your credit card rewards points for travel, you'll likely be better off choosing a credit card that earns cashback rewards. If you'd rather have more flexible redemption options and maximize the value of your points by using them for travel, credit cards that earn traditional rewards points will be the better option for you.

{"backgroundColor":"butter","content":"\u003C\/p\u003E\n\n\u003Ch2 id=\"Credit\"\u003ECredit card points vs. cash back\u003C\/h2\u003E\n\n\u003Cp\u003ETypically credit cards will offer you rewards in either points or cash back.\u003C\/p\u003E\n\n\u003Cp\u003EIf you're looking for simple, high value rewards, cashback credit cards can be a great option. Cashback rewards have a couple advantages:\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cdiv class=\"ShortcodeList--root \"\u003E\n\n \u003Cdiv class=\"ShortcodeList--content ShortcodeList--content-margin\"\u003E\n \u003Cdiv class=\"ShortcodeList--column\"\u003E\n \u003Cul class=\"ListUnordered--root ListUnordered--bullet\"\u003E\n \u003Cli class=\"ListUnordered--list-item\"\u003E\n \u003Cstrong\u003EThe value is more straightforward\u003C\/strong\u003E. If you get 1% cash back on all purchases made with your card, you know you are getting 1 cent for each dollar that you spend\n \u003C\/li\u003E\n \u003Cli class=\"ListUnordered--list-item\"\u003E\n \u003Cstrong\u003ECash back is easy to redeem\u003C\/strong\u003E. Usually cash back can be redeemed as a statement credit or deposited directly into your checking account.\n \u003C\/li\u003E\n \u003C\/ul\u003E\n \u003C\/div\u003E\n \u003C\/div\u003E\n\u003C\/div\u003E\n\n\u003C\/p\u003E\n\n\u003Cp\u003EPoints, on the other hand, can be a bit more challenging to quantify, but come with their own advantages:\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cdiv class=\"ShortcodeList--root \"\u003E\n\n \u003Cdiv class=\"ShortcodeList--content ShortcodeList--content-margin\"\u003E\n \u003Cdiv class=\"ShortcodeList--column\"\u003E\n \u003Cul class=\"ListUnordered--root ListUnordered--bullet\"\u003E\n \u003Cli class=\"ListUnordered--list-item\"\u003E\n \u003Cstrong\u003EYou can redeem points in a variety of ways\u003C\/strong\u003E. You have many more ways you can use your rewards, including travel, gift cards and merchandise (though the latter two often have a terrible value).\n \u003C\/li\u003E\n \u003Cli class=\"ListUnordered--list-item\"\u003E\n \u003Cstrong\u003EYou can maximize their value\u003C\/strong\u003E. By strategically redeeming your points, you can get a better return than 1 cent per point.\n \u003C\/li\u003E\n \u003Cli class=\"ListUnordered--list-item\"\u003E\n \u003Cstrong\u003EYou can often transfer points into airline and hotel loyalty programs\u003C\/strong\u003E. Many credit card programs allow you to transfer points to outside loyalty programs. This can be a great benefit if you\u2019re already collecting rewards in a loyalty program account, and often returns the best value on your points.\n \u003C\/li\u003E\n \u003C\/ul\u003E\n \u003C\/div\u003E\n \u003C\/div\u003E\n\u003C\/div\u003E\n\n\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cstrong\u003EBottom line\u003C\/strong\u003E: If you don't travel often or aren't willing to put in the work to use or maximize your credit card rewards points for travel, you'll likely be better off choosing a credit card that earns cashback rewards. If you'd rather have more flexible redemption options and maximize the value of your points by using them for travel, credit cards that earn traditional rewards points will be the better option for you.\u003C\/p\u003E\n\n\u003Cp\u003E","padding":"double"}

Are credit card rewards points worth it?

Credit card rewards points can certainly be worth it when properly utilized. Using credit card points and miles can help you save big on travel expenses, earning you things like free flights, seat upgrades, free hotel nights and upgrades and more. Even if you only travel a few times per year, credit card points can help cover the costs so you won't end up paying out of pocket. If you'd prefer to earn cashback rewards, you'll get a percentage back of every dollar you spend, which can end up saving you significant sums of money in the long term.

The best part about credit card rewards is that with the right card, you earn them simply by spending money on the things you would have bought anyway, thus rewarding you for your everyday purchases. For consumers who frequently use a credit card, rewards points are certainly worth it.

FAQs

How do points work on credit cards?

Credit card points work by making purchases on your card in order to earn and redeem points. Different cards offer different earning rates, allowing you to earn more points in different spending categories. You can redeem your points for items like cash back, travel, gift cards and more.

How much is 1,000 points worth?

Rewards rates will vary depending on the particular credit card you're using, but generally rewards are worth around 1 cent per point. If you earn 1,000 points, that would be worth around $10.

Is it worth getting a credit card for points?

If you are a frequent traveler or could benefit from earning cash back rewards, it can definitely be worth it to get a credit card that earns points. Credit card points can save you money on flight and hotel purchases, offer you upgrades and more.

What credit card has the best points program?

Though there are lots of great points programs out there, we believe Chase Ultimate Rewards® is one of the best. It has a number of flexible redemption options and allows you to maximize your rewards value by transferring points to any of its many travel partners. Some of the cards that earn Chase Ultimate Rewards® include the Chase Freedom Flex℠, the Chase Freedom Unlimited®, the Chase Sapphire Preferred® Card and the Chase Sapphire Reserve®.

For rates and fees of The Platinum Card® from American Express, please click here.

For rates and fees of American Express® Gold Card, please click here.

The information related to American Express® Green Card, The Amex EveryDay® Preferred Credit Card from American Express, The Business Platinum Card® from American Express, Blue from American Express®, American Express® Business Gold Card and The Blue Business® Plus Credit Card from American Express has been independently collected by ValuePenguin and has not been reviewed or provided by the issuer of this card prior to publication. Terms apply to American Express credit card offers. See americanexpress.com for more information.

These responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

Advertiser Disclosure: The products that appear on this site may be from companies from which ValuePenguin receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). ValuePenguin does not include all financial institutions or all products offered available in the marketplace.

How We Calculate Rewards: ValuePenguin calculates the value of rewards by estimating the dollar value of any points, miles or bonuses earned using the card less any associated annual fees. These estimates here are ValuePenguin's alone, not those of the card issuer, and have not been reviewed, approved or otherwise endorsed by the credit card issuer.

Example of how we calculate the rewards rates: When redeemed for travel through Ultimate Rewards, Chase Sapphire Preferred points are worth $0.0125 each. The card awards 2 points on travel and dining and 1 point on everything else. Therefore, we say the card has a 2.5% rewards rate on dining and travel (2 x $0.0125) and a 1.25% rewards rate on everything else (1 x $0.0125).