What are credit card points and miles (really) worth?

You’ve probably seen some pretty wild sign-up offers if you’ve been shopping around for a new credit card — offers like “Get 50,000 points after spending X dollars in X number of days.”

50,000 of anything seems like a lot, but that doesn’t go far in answering a key question when it comes to rewards credit cards: What are all those credit card points or miles really worth?

Well, it depends on the rewards program, the credit card and what you redeem for. We know that’s not the most helpful answer, but bear with us for a moment and you’ll end up with a better idea of what you’ll get when you redeem your credit card points or miles.

Credit card points vs. miles: What’s the difference, anyway?

Miles and points tend to work the same way. Depending on the card and program, you’ll earn either miles or points for your purchases. You can then redeem them for a variety of eligible items and services.

Here’s one important distinction: Miles are typically associated with cards that are co-branded with a specific airline. They typically have no set value, and you can generally only redeem miles for airline tickets with the issuing airline and its partners.

For that reason, it may take a bit more legwork to maximize the value of your credit card miles. However, many people find the payoff well worth the trouble.

Points, on the other hand, are typically tied to a card issuer. Unlike miles, they generally have a set value, and they’re typically more flexible in terms of redemption.

You might be able to score gift cards and merchandise with your points, or you could choose to redeem them on travel purchases like airfare, train tickets and taxi rides.

Now that we’ve distinguished between the two, let’s take a deeper dive into what credit card points and miles are really worth.

What are credit card points really worth?

Points-based rewards programs typically offer several ways to redeem points.

When you transfer points to a partner program, your redemption value could grow. Heads up: The value of points or miles in loyalty programs may vary depending on how you redeem them.

Also keep in mind not all cards are eligible for point transfers.

While the programs offer decent value when redeeming points for merchandise, they offer an even better deal on gift cards.

What are credit card miles really worth?

Miles-based programs are typically best for frequent travelers who are loyal to one airline and don’t need to redeem rewards for cash back.

It’s important to note that when it comes to airline loyalty programs, the value of miles can vary dramatically depending on how (and when) you redeem them.

Airline rewards plans — as with many other airline loyalty programs — miles have no set value.

Heads up: In most cases, the value you get for your miles may vary depending on factors like timing and seat availability.

Make sure fees don’t negate your rewards

Here’s a good way to make sure your rewards card doesn’t reward you: Pay more in fees and interest charges than you earn in points or miles. This, clearly, is something you want to avoid.

If you have a credit card with an annual fee, calculate how much you’ll have to spend each month to make up for it.

And if you regularly carry a balance, you’ll risk spending more on interest charges than you make in rewards points or miles. That’s one of the many reasons we recommend always paying off your monthly credit card balance in full and on time, if you can.

Bottom line

If you love having a lot of options on where to redeem your credit card rewards — and if you aren’t loyal to just one airline — a points-based card could be right for you.

On the other hand, if you know you just want to redeem your rewards for flights on your favorite airline, a miles-based card could be your best bet.

With either type of credit card, compare the values of your redemption options to get the maximum value for your rewards. It may take some extra legwork now, but it’s usually worth it in the long run.