Oscar Wong / Moment / Getty Images

What are credit card points?

A beginner’s guide to credit card rewards


Many credit cards offer reward points for every purchase you make. Here’s what you need to know to start earning some rewards of your own.

The content on this page is accurate as of the posting date; however, some of our partner offers may have expired. Please review our list of best credit cards, or use our CardMatch™ tool to find cards matched to your needs.

If you’re new to rewards credit cards, you’re probably curious how they work. How are points credit cards different from cash back credit cards? How do you score rewards with a points-based credit card?

Here’s what you need to know about how credit card points work before you apply.

What are points vs. cash back?

Credit card issuers offer two major types of credit card rewards – cash back or points. If you have a cash back credit card, you earn a percentage of cash back on every purchase. If your credit card is a travel card that earns points or miles, you earn a certain number of points or miles on every purchase.

Many of today’s best credit cards offer points, which can be redeemed for everything from travel bookings to charitable donations – not to mention statement credits, gift cards, online shopping and more.

How do you earn credit card points?

There are many different ways to earn credit card points. Some cards, such as the Capital One Venture Rewards Credit Card and the Discover it® Miles Credit Card, offer flat-rate points on every purchase. The Citi® Double Cash Card awards 1% cash back per dollar charged, another 1% when you pay your bill – 2% cash back altogether. Other cards, such as the Chase Sapphire Preferred Card, offer different levels of points depending on the type of purchase you make.

How much are credit card points worth?

In most cases, a point is worth one penny. That means 100 credit card points are worth $1 and 10,000 credit card points are worth $100. (Not all credit card issuers follow the point=penny benchmark, so read your credit card fine print to ensure you know exactly what your points are worth.)

Many cards offer that 1%, or a penny per dollar, as a default, with extra rewards in certain spending categories.

With cards such as Chase Freedom Flex℠ and Discover it® Cash Back, for example, you get 5% back for every dollar spent in certain categories (up to $1,500 in purchases per quarter following activation, 1% on everything else). These change every three months and you have to remember to activate before each quarter begins. From October through December, for example, Discover it is offering its 5% rewards on Amazon.com, Target.com and Walmart.com purchases.

In some cases, your credit card points may increase or decrease in value depending on how you redeem them – which is why it’s important to understand exactly how your credit card points can be redeemed and how your redemption options affect your point value.

What are the most valuable credit card points?

Some credit cards are specifically designed to reward certain types of spending. A travel credit card, for example, offers extra points or miles when you make travel purchases. An airline credit card rewards purchases made with a specific airline. These cards’ points can often be extremely valuable, and earning a lot of points or miles on these cards can save you money on future travel bookings.

Some travel cards offer even more value if you book through the issuer’s travel portal. For example, the points you earn with Sapphire Preferred increase in value by 25% when you use them to book travel through the Chase Ultimate Rewards portal,

What kind of points should you start with?

The best rewards credit cards give you the opportunity to earn cash back, points or miles on every purchase. If you want to maximize your credit card points, look for a card that rewards the type of spending you do most often.

If you buy a lot of groceries, you might want to apply for a credit card that rewards grocery purchases. The American Express® Gold Card, for example, offers 4 points per dollar spent at U.S. supermarkets on up to $25,000 per year in purchases (1 point per dollar afterward) as well as the opportunity to earn 4 points per dollar at restaurants, 3 points per dollar on flights booked directly through airlines or on American Express Travel and more.

Depending on your everyday spending habits, you might also want to consider a rewards card for gas purchases or one that rewards online shopping. Pick a credit card that works for you – and your spending.

Other ways to earn credit card rewards

  • Sign-up bonuses. Most top credit cards offer sign-up bonuses to new cardholders – and the best credit card sign-up bonuses offer a lot of valuable reward points. Chase Sapphire Preferred, for example, is currently offering 100,000 bonus points to new cardholders who spend $4,000 in the first three months.
  • Milestone bonuses. Some credit cards offer bonus points after a cardholder hits a certain milestone – such as a dollar amount spent on the card or an account anniversary. The Southwest Rapid Rewards® Priority Credit Card, for example, offers cardholders 7,500 bonus points after every card anniversary.
  • Referral bonuses. Several credit card issuers offer referral bonuses to cardholders who successfully convince their friends or family members to sign up. Log into your credit card online account or mobile app to see if you can earn extra credit card points through referrals.

Do credit card points expire?

In most cases, credit card points do not expire as long as your account is active. However, it’s possible to lose your credit card points if you miss payments or misuse your account – so make sure you practice responsible credit habits!

It’s also worth noting that credit card issuers can change the terms and/or the value of your credit card rewards at any time. This is why it’s good practice to redeem your credit card rewards as soon as possible. While saving your points for a big purchase is also good practice, don’t let your rewards sit in your account forever or you’ll risk losing out on the prize you’re targeting.

Editorial Disclaimer

The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

Credit Card Rate Report
Cash Back

Questions or comments?

Contact us

Editorial corrections policies

Learn more