Miles are a currency your credit card issuer creates, and you earn them by spending money
When you use a rewards credit card, the issuer tracks how much you spend and gives you miles in return — usually one mile per dollar, though some cards offer more for certain purchases like flights or restaurants. Those miles sit in an account tied to your card. You do not own them the way you own cash; the card issuer owns the program and can change the rules, the earning rate, or what miles are worth at any time.
Miles are not the same as cash back. Cash back reduces your bill or deposits money into a bank account. Miles are points in a loyalty program that you convert into travel or other rewards. The conversion rate — how many miles you need to book a flight, for example — is set by the issuer and changes based on demand, airline partnerships, and business decisions you have no control over.
Key Takeaways
- You earn miles by spending on your credit card, usually at a rate of one mile per dollar, though bonus categories earn more.
- Miles have no fixed dollar value; what they are worth depends on how you use them and what the issuer charges at the time you redeem.
- The most common redemption is booking flights through the card issuer's travel portal, where one mile might be worth 0.5 to 1.5 cents.
- Miles expire if your account is closed or inactive for a long period, so check your card's terms for the exact policy.
- Transferring miles to airline or hotel partners can sometimes give you better value, but it requires research and carries the risk that partner programs change their rates.
How you earn miles on different types of purchases
Most rewards credit cards earn one mile per dollar on all purchases. Some cards offer bonus miles in specific categories — for example, three miles per dollar on flights booked directly with airlines, two miles per dollar on dining, and one mile per dollar on everything else. A few premium cards offer flat bonuses just for opening the account, typically 50,000 to 100,000 miles after you spend a certain amount in the first few months.
The earning rate is printed in your card's terms and conditions, which you can find on the issuer's website or in your account. If you are unsure whether a purchase counts toward a bonus category, contact the card issuer before you buy — some merchants code differently than you might expect, and a restaurant that serves alcohol might be coded as a bar rather than dining.
Miles do not accrue interest and do not grow on their own. You earn them only when you use the card. If you stop using the card or close the account, you stop earning miles, though miles you have already earned usually stay in your account unless the issuer's terms say otherwise.
What miles are actually worth when you redeem them
Miles have no set dollar value. Their worth depends entirely on how you redeem them and what the issuer charges. If you book a $300 flight using 30,000 miles through the card issuer's travel portal, each mile is worth about one cent. If the same flight costs 50,000 miles, each mile is worth 0.6 cents. The issuer decides those prices, and they change based on the flight, the airline, the time of year, and how far in advance you book.
The most common way to redeem miles is through the issuer's travel portal — a website where you search for flights, hotels, and rental cars, and pay with miles instead of cash. The prices in that portal are usually higher than what you would pay booking directly with the airline or hotel, which means your miles are worth less. For example, a flight that costs $200 when you book it directly with the airline might cost 25,000 miles in the portal, while the same flight booked directly might cost 20,000 miles through the airline's own rewards program.
Some cards let you transfer miles to airline or hotel partners at a fixed rate — for example, 1,000 miles to the card issuer equals 1,000 miles in an airline's program. This can sometimes give you better value, because airline programs often price flights differently than credit card portals do. But transferring miles is permanent; you cannot get them back if you change your mind or find a better deal elsewhere.
Bonus categories and how they change your earning
Bonus categories let you earn more miles on specific types of spending. A card might offer five miles per dollar on airfare, three miles per dollar on hotels and rental cars, and one mile per dollar on everything else. If you spend $2,000 on flights in a year, you earn 10,000 miles instead of 2,000 — a significant difference if you are a frequent traveler.
The catch is that bonus categories are not permanent. The issuer can change them, add new ones, or remove them entirely. When you open a new card, the bonus categories are usually locked in for the life of the card, but the issuer can still change them for future cardholders. If you are deciding whether to keep a card, check the current terms on the issuer's website to see if the categories that made the card valuable to you are still there.
When miles expire and what happens to your account
Most credit card issuers do not expire miles as long as your account is open and active. "Active" usually means you have used the card or earned miles within the past 12 to 24 months, depending on the issuer. If your account sits unused for longer than that, the issuer may close it, and when the account closes, your miles are forfeited.
To keep miles from expiring, use your card at least once every year or two — even a small purchase counts. If you have a large balance of miles you are saving for a specific trip, set a calendar reminder to make a small purchase before the inactivity important date. You can also check your account online to see the last date you earned miles and whether there is an expiration policy listed in your card's terms.
If your account is closed by the issuer for inactivity, you cannot recover the miles. If you close the account yourself, the miles are usually forfeited when ready, though some issuers give you a grace period of 30 to 90 days to redeem them. Before you close an account, log in and check your balance, and redeem any miles you want to keep.
How to compare the real value of different rewards cards
To decide whether a miles card is worth the annual fee, you need to estimate how much your miles will actually be worth when you redeem them. Start by looking at what you spend in a year and which bonus categories explore. If you spend $5,000 on flights and $3,000 on dining, and the card offers five miles per dollar on flights and three miles per dollar on dining, you earn 25,000 plus 9,000 equals 34,000 miles.
Next, estimate what those miles are worth. Look at the issuer's travel portal and search for a flight you might actually book. If a $300 flight costs 30,000 miles, your miles are worth about one cent each, so 34,000 miles equal $340. If the card has a $95 annual fee, you are ahead by $245 before you count the miles you earn on other purchases. If the same miles are worth only 0.6 cents each in the portal, your 34,000 miles equal $204, and the annual fee cuts that to $109 — still positive, but much smaller.
This math is approximate because redemption rates change and your spending may vary. But it gives you a realistic sense of whether the card pays for itself. A card that earns miles worth less than one cent each needs to earn a lot of miles to justify an annual fee.
Transferring miles to airline and hotel partners
Some credit card programs let you transfer miles to airline and hotel loyalty programs at a set rate — for example, 1,000 credit card miles equals 1,000 airline miles. This can be valuable if the airline program prices flights lower than the credit card portal does, or if you are close to earning a free ticket in the airline program and want to finish it quickly.
Before you transfer, research the airline program's redemption rates. Visit the airline's website, search for a flight you want to book, and note how many miles it costs. Then check the credit card portal for the same flight and see how many miles it costs there. If the airline program is cheaper, transferring makes sense. If the portal is cheaper, keep your miles in the credit card program.
Transfers are permanent and usually process within a few business days. Once miles are in an airline program, they are subject to that program's rules, which may be stricter than the credit card program's. For example, the airline might expire miles after 18 months of inactivity, while the credit card program does not expire them as long as your card account is open.
Frequently Asked Questions
Can I use miles from one credit card with a different airline?
Only if you transfer them to that airline's loyalty program, and only if your credit card program offers transfers. Not all cards do. Once transferred, the miles are locked into that airline's program and follow its rules. Check your card's terms to see which airline and hotel partners are available for transfers.
What happens to my miles if I pay off my balance late or miss a payment?
Missing a payment does not automatically erase your miles, but it can lead to account closure, which does. If your account is closed due to missed payments, your miles are forfeited. Pay on time to keep your account open and your miles safe.
Are miles worth more if I book expensive flights?
Not necessarily. The issuer sets the miles price for each flight independently. A $500 flight might cost 50,000 miles while a $200 flight costs 25,000 miles, so the value per mile is the same. Sometimes cheaper flights cost fewer miles, and sometimes premium or international flights cost more miles per dollar of ticket price. Search the portal to compare.
Can I sell my miles to someone else?
Most credit card programs prohibit selling or trading miles. Your miles are tied to your account and cannot be transferred to another person. Some third-party websites claim to buy and sell miles, but these transactions violate most card issuers' terms and can result in account closure and forfeiture of all miles.
Do I have to use miles for flights, or can I redeem them for other things?
It depends on the card. Most cards let you redeem miles for flights, hotels, rental cars, and sometimes merchandise or statement credits through the travel portal. Some cards offer cash back redemption at a lower rate — for example, 1,000 miles equals $5 in statement credit. Check your card's redemption options on the issuer's website.