Choosing Between Points and Cash Back

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When you have multiple credit cards, the decision between points and cash back can be tough. Some people prefer points and miles, others solely want cash back, and some don’t care as long as they get the maximum amount of rewards. I definitely fall in that last bracket.

Points, Miles, or Cash Back
This is the question of all questions when it comes to credit cards. Ultimately, it comes down to the credit card user. I have all three types of cards, as I’m sure most of you do, and I use them all. My preference is to use whatever card earns me the most profit; whether it be in points, miles, or could hard cash (statement credit), I just want my purchase to be as profitable as possible.

There are a few things to take into account, though. For example, not all points and miles are equal. I would much rather have 100 Ultimate Rewards points than 100 Delta SkyMiles. In fact, I would rather have 100 UR points than 150 SkyMiles. That’s because I value UR points at 1.5 cents each, while I value SkyMiles at about 0.8 cents each. That’s pretty standard around the traveling community, however, that may not be the case with you. If you solely fly Delta, then it might be the other way around for you. So, it’s important to take your personal preferences into account.

Here’s a few scenarios:

  • If you don’t travel very often, I would advise only using cash back cards. Your everyday card could be the Fidelity rewards card that earns 2% cash back on everything. On top of that, you could complement it with the Discover It and Chase Freedom, to get 5% cash back on certain purchases.
  • If you are not located near a large airport and only certain airlines fly out of it, I would suggest getting an airline branded card, as well as a card that can transfer to that airline. For example, if your airport only offers Delta and American Airlines, you should choose one to stick with. For Delta, you could get a Delta Gold card as well as the Amex Everyday Preferred. For American Airlines, you could get a Citi AA card as well as a Sapphire Preferred.

There is no right or wrong choice when it comes to cash, points, and miles. It all comes down to personal preference and situation.

Maximizing Rewards
Wallaby is by far the best way to maximize your rewards. It takes a bit to register all your cards, but it definitely pays off. All you need is a smart phone, which I’m pretty sure most of you have, to check which card you should use at the store you’re shopping at. However, that is not the only way I suggest choosing a card.

I suggest using the following order of operations, to make sure you maximize your rewards:

  1. Do you have a card you are trying to hit minimum spend with or a card that has a bonus you want to hit (i.e. $25k yearly spend)?
    • If I have a card I’m trying to hit a bonus with, I will definitely use that over anything else. However, there is one exception to this rule. If you are at a store you get 5X at with a different card and you think you can hit your bonus using other manufactured spending methods, use your 5X card.
  2. What card earns you the highest rewards?
    • If you only have 1% cash back cards and 1X cards at this particular store, see rule three.
  3. What is your go to everyday card?
    • If you aren’t trying to hit a bonus and you don’t have a card that earns more than 1X or 1%, use your preferred card. That could be the card you value the most or the card that is tied to your favorite rewards program. Right now, mine is the Sapphire Preferred.

What is your preference?


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