We broke down the differences between credit card points and frequent flyer miles - here's why you should be collecting both

• While "points" and "miles" are often used interchangeably, they're usually two very different things.
• You can earn flexible rewards points such as Amex Membership Rewards and Chase Ultimate Rewards with cards like the Platinum Card® from American Express and the Chase Sapphire Preferred Card. You can use these points to book travel directly with the bank, or you can transfer points to travel partners.
• Miles, on the other hand, are usually earned with airline credit cards like the Gold Delta SkyMiles® Credit Card from American Express, and through airline frequent flyer programs. Your main option for redeeming them is for flights.
• To maximize and diversify your rewards, it's best to earn miles whenever you fly, and to earn credit card points on your everyday spending.
• While there are a few different valuable kinds of points and credit cards that earn them, if I had to choose just one credit cards rewards program, I would stick with Chase - ideally using the Chase Sapphire Reserve.
• Read more personal finance coverage.

Even though a ton of credit cards offer "points" or "miles" for every dollar you spend, those points can be very different things. Each bank and frequent flyer program has its own rewards currency that can be used in different ways. That makes it complicated when you're trying to choose a credit card; two different cards could offer double points on purchases, but those points could have different values, and could be best for two different things.

In general, one type of rewards stands out as the most valuable: transferable points, which you can earn with non-airline rewards credit cards. You can use these points to book travel directly through the credit card issuer, or you can turn them into airline miles or hotel loyalty points by transferring them to different loyalty programs. (Hence, the term "transferable points.")

Because of the way frequent flyer programs work, you can usually get a lot more value from transferable credit card points than from airline miles. Plus, with transferable points, you have more options than you would with airline-specific miles.

However, since you can earn frequent flyer miles every time you fly - in addition to any points or miles you earn from buying the ticket with your credit card - there's no reason to pass those up, even if you don't fly often. Plus, it can definitely be worth collecting fixed-value points, too.

Continue reading below to learn more about the differences between transferable credit card points and airline miles, and to see why it makes sense to earn both.

Keep in mind that we're focusing on the rewards and perks that make these credit cards great options, not things like interest rates and late fees, which will far outweigh the value of any points or miles. It's important to practice financial discipline when using credit cards by paying your balances in full each month, making payments on time, and only spending what you can afford to pay back.

Transferable credit card points: maximum flexibility and value

Transferable points, also known as flexible points, are generally the best kind of rewards to earn. This is because they give you the most redemption options, from cash back to travel. You can shop around to find the best value, whether it's redeeming them directly through the bank's travel portal or transferring them to an airline or hotel loyalty program.

The three main transferable points programs are Amex Membership Rewards, Chase Ultimate Rewards, and Citi ThankYou Rewards. Each of these three rewards programs partners with airline or hotels and you can move your points over to them to book travel.

Somewhat confusingly, Capital One miles - which you can earn on cards like Capital One® Venture® Rewards Credit Card and the Capital One® Spark® Miles for Business - are also transferable. They're not miles in the sense that they're tied to an airline frequent flyer program, but you can transfer Capital One miles to airline partners including Air Canada and JetBlue.

How to use transferable credit card points

One way to use transferable points is to exchange them for cash back or statement credits against purchases. However, this typically provides the worst value, as many flexible points currencies will give you less than 1 cent per point, and you can get much more value when you use these points to book travel.

A better way to use your bank-based credit card points is to book travel through your credit card company's travel portal. These portals work just like Expedia or Priceline, with one difference: They show the price in points as well as in dollars. The best part is that your points will often get a nice jump in value, depending on your bank.

The other option for all three of these points currencies is to transfer them to an airline or hotel partner, turning them into frequent flyer miles or hotel points.

Amex Membership Rewards points

You can earn Membership Rewards points with Amex cards like the Platinum Card from American Express, the American Express® Green Card, and the Blue Business® Plus Card from American Express.

American Express Membership Rewards points offer a terrible value for cash, statement credit, and merchandise redemptions (less than 1 cent per point), but are mostly better when you use them through Amex Travel.

Generally, points are worth 1 cent each toward flights booked through Amex Travel, and 0.7 cents on all other travel purchases including hotels and cruises. Occasionally, Amex offers "Insider Fares" on flights - mostly with Delta - which give you a slightly better value for your points.

If you want to invest a bit more time into finding the highest-value way to redeem your Amex points, you can also transfer them to airline and hotel partners including Delta, Hilton, Singapore Airlines, and Marriott. You can get more value from your points this way because you aren't limited to just 1 cent per point in value - depending on how much a first-class airline ticket costs in cash, using Amex points to book it could get you 5 cents per point in value or more.

Chase Ultimate Rewards points

You can earn Ultimate Rewards points with the Chase Sapphire Preferred, Chase Sapphire Reserve, the Ink Business Preferred Credit Card, and other cards.

Chase Ultimate Rewards points are only worth 1 cent each as cash or statement credits. Depending on which Chase card you have, you can get a bonus on points used to book travel through Chase.

For instance, if you have the Chase Sapphire Preferred card or the Ink Business Preferred, you'll get a 25% bonus on points used toward travel booked through Chase- in other words, those points will be worth 1.25 cents each, so 50,000 points are worth $625. With the Sapphire Reserve, the bonus for travel purchases is 50%, so the same 50,000 points are worth $750.

You can also transfer Chase points to partners like Hyatt, British Airways, United, and Marriott - transferring Ultimate Rewards will often get you the most value.

Citi ThankYou Rewards points

Finally, there's Citi ThankYou Rewards, which you can earn with cards like the Citi Premier℠ Card and the Citi Prestige® Card.

You get 1 cent per point when you book flights through Citi. The Citi Premier is currently offering a 60,000 point sign-up bonus after you spend $4,000 in the first three months, so those points would be worth $600 for flights.

You can also transfer Citi points to airline partners including Avianca, Etihad, and Singapore Airlines.

Frequent flyer miles

If you're spending on a card like the Gold Delta SkyMiles Amex or the United Explorer Card from Chase, you earn frequent flyer miles instead of transferable rewards points. While miles can be way more valuable than points, they're also more complicated to book with.

Transferring your Chase or Amex points to a frequent-flyer or hotel-loyalty program is generally the most lucrative use of points. This is particularly valuable for flying, since in most cases, the cash price of a flight and the miles required for an award ticket aren't linked, so it's possible to get exponentially increased value from your points by transferring them and booking an award ticket instead. That means potentially being able to fly long-haul in first or business class with points, among other things.

Airlines are increasingly doing away with award charts in favor of pricing award tickets "dynamically" based on customer demand, but it's still possible to find real steals for using your miles. The trick is to find "saver" award availability, which requires fewer miles than "standard" awards. There are usually just a few of these saver seats available, and they may become open periodically between when the flight schedule is published and when the flight leaves.

By doing a couple of sample searches, it's easy to figure out the lowest possible price for a specific routing. It can require some patience, and occasionally flexibility, but if you plan in advance, you can just keep your eye on award flight prices by doing occasional searches until the saver availability you need opens up.

Finding saver seats and booking award tickets is the only practical way to use credit card points for travel in first and business class - it can be a bit tricky, but it's definitely doable.

Why it's worth earning both credit card points and airline miles

Ultimately, it's best to collect both transferable credit card points and frequent flyer miles for the sake of flexibility. Sometimes you might find a better value by using miles, and other times points are more valuable. It can also be worth having points handy for times you can't find saver availability and don't have any flexibility in your travel plans. You can also use points to offset expenses that can't be covered by frequent flyer miles or booked through a travel portal, like train tickets or ferries.

Because you can earn twice on your flights - through a rewards credit credit card when you buy the ticket, and through a frequent flyer program when you actually fly - you should make sure that you're always earning that double credit, no matter what kind of credit card you use.

While there's value to earning multiple types of credit card rewards, if you're only going to use one, the best course is to opt for transferable points, since they give you the most flexibility.

If I had to choose just one program, I would stick with Chase Ultimate Rewards - ideally the Chase Sapphire Reserve card - since it's possible to get great value, pool your points between cards, and use them for everything from cash back and statement credits to award bookings by transferring them to frequent flyer miles.

If you're looking to start earning points, be sure to check out our guide to the best rewards credit cards.

Click here to learn more about the Chase Sapphire Reserve card.

• More credit card coverage
• What's the best airline credit card?
• The best cash-back credit cards
• Southwest credit card review
• Best rewards credit cards

NOW WATCH: Apple just revealed its AirPods Pro for $249, which feature noise cancellation. Here's everything that was wrong with the $159 pair of the wireless headphones.