In the last lesson, we covered what points and miles are. Now let's dig deeper into the three main categories of travel currencies, because understanding this distinction will help you make smarter decisions from day one.
The Three Categories
Travel rewards fall into three main buckets:
- Credit card points (also called "transferable points" or "bank points")
- Airline miles
- Hotel points
Each works differently, has different strengths, and requires a different strategy. Let's explore each one.
1. Credit Card Points
Credit card points are earned through spending on rewards credit cards issued by banks. The major programs are:
- Chase Ultimate Rewards
- American Express Membership Rewards
- Capital One Miles
- Citi ThankYou Points
- Bilt Rewards
Credit card points are often called "transferable" because you can move them to airline and hotel partners. This flexibility makes them incredibly valuable—you're not locked into one airline or hotel chain.
Key Characteristics
How you earn them: Through everyday spending on credit cards—groceries, dining, gas, travel, online shopping, and more.
The big advantage: Flexibility. You can transfer them to multiple airlines and hotels, or use them to book travel directly, or sometimes convert to cash.
Who they're best for: Most people. Credit card points are the most accessible way to earn travel rewards because you don't need to fly frequently or stay at specific hotels.
2. Airline Miles
Airline miles are earned directly with specific airlines. Major U.S. programs include:
- United MileagePlus
- American AAdvantage
- Delta SkyMiles
- Southwest Rapid Rewards
International programs like British Airways Avios, Air France/KLM Flying Blue, and Singapore Airlines KrisFlyer are also popular.
Key Characteristics
How you earn them: Flying on that airline (or its partners), using co-branded credit cards, or transferring from credit card programs.
The big advantage: Direct booking on that airline's flights, plus access to partner airlines through alliances.
The limitation: Once miles are in a specific airline program, they can only be used with that airline and its partners. Less flexible than credit card points.
Who they're best for: People who frequently fly one airline, or when you've identified a specific redemption that offers great value.
3. Hotel Points
Hotel points are earned with specific hotel chains. The major programs are:
- Marriott Bonvoy (Marriott, Westin, Sheraton, Ritz-Carlton, etc.)
- Hilton Honors (Hilton, Conrad, Waldorf Astoria, etc.)
- World of Hyatt
- IHG One Rewards (Holiday Inn, InterContinental, etc.)
Key Characteristics
How you earn them: Staying at that hotel chain, using co-branded credit cards, or transferring from credit card programs (varies by program).
The big advantage: Can provide excellent value for free nights, especially at expensive properties.
The limitation: Locked to that hotel chain. And hotel points are generally harder to get outstanding value from compared to airline miles.
Who they're best for: Frequent travelers who stay at hotels often, or anyone who can earn them easily through credit cards and wants to book specific properties.
Comparing the Three
| Feature | Credit Card Points | Airline Miles | Hotel Points |
|---|---|---|---|
| Flexibility | 🟢 High | 🟡 Medium | 🔴 Low |
| Ease of earning | 🟢 Easy (everyday spending) | 🟡 Varies (flying + cards) | 🟡 Varies (staying + cards) |
| Potential value | 🟢 High (via transfers) | 🟢 Very high (premium flights) | 🟡 Good (luxury hotels) |
| Complexity | 🟡 Medium | 🟡 Medium to high | 🟢 Low |
Where Beginners Should Focus
Here's our honest recommendation: Start with credit card points.
Why? Because credit card points offer the best combination of:
- Accessibility: You don't need to be a frequent flyer to earn them
- Flexibility: You can transfer to multiple airlines and hotels
- Forgiveness: If your plans change, your points still have value
Airline miles and hotel points become more valuable once you understand the ecosystem better and have specific redemptions in mind. But credit card points are the safest starting point.
In the next lesson, we'll explain exactly how credit card points become valuable through "transfer partners"—the secret sauce that makes this whole system work.
Key Takeaways
- Travel rewards come in three types: credit card points, airline miles, and hotel points
- Credit card points are "transferable"—you can move them to airline and hotel programs
- Airline miles offer the highest potential value but are locked to specific airlines
- Hotel points are the simplest to understand but offer less flexibility
- For beginners, credit card points are usually the best starting point