Miles, Points, or Cash

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points miles and cashThe other day I was asked the age-old question, “cash or credit?” As a blogger, travel hacker, manufactured spender, and responsible credit card user, why would I use cash? It doesn’t profit me any, it’s germy, and it’s plain boring (credit cards are much prettier).

Short Answer: I wouldn’t.

The Hierarchy of Rewards (HoR)

My Hierarchy of Rewards, or HoR, is a set of rankings I apply to my credit cards/rewards. When picking a card to use, I run through a lot of questions in my head. Am I trying to hit a minimum spend requirement? Am I trying to hit a yearly spend requirement? Do I have a trip in mind where I need certain miles/points? If I answer no to all of those questions, I like to follow this HoR:

  1. Points
  2. Miles
  3. Cash Back

If I happen to answer yes to any of those questions, I will follow this HoR:

  1. Minimum Spend Requirement
  2. Yearly Spend Requirement
  3. Trip Points

I don’t always follow this to a T, because cash can occasionally be much for lucrative than points. For example, if Discover is 5% cash back at a gas station and my Amex Platinum is only 1X points I would definitely use Discover. Now if my Capital One Quicksilver is 1.5% cash back at a gas station and my Amex SPG is 1X points, I would definitely choose the 1X points because they’re worth much more to me.

Is it a perfect system for everyone? Not really, but it works for me. You might already have your own HoR, however, if you don’t I highly suggest making one. That way you have goals in mind, which is quite important in this game.

So instead of, “cash or credit?”, the question should be, “miles, points, or cash?” At least, that’s the question I hear when checking out…

BTW: I’ll be at the Ann Arbor Do tomorrow. Hopefully I’ll see some of you there!

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