Advertisement
credit & debt

Miles or Cash Back: Which Is the Better Credit-Card Reward?

MileCards.com can help you decide whether an air-miles reward card or a cash-back card will be a better deal for you.

Ever wonder whether an air-miles rewards card or a cash-back card offers the better deal? Now, card-comparison site MileCards.com has crunched some numbers that can help you decide. MileCards tallied redemption prices for more than 100,000 domestic award flights. Using consumer-spending data from the U.S. Bureau of Labor Statistics, the site also gauged how much a customer might spend on each of 38 credit cards offering points or miles that could be traded for domestic flights. Putting the two components together, MileCards estimated the value in flight awards that the travel cards would earn over three years, then compared those figures with the three-year return on a cash-back card that yields 2% with no annual fee.

Eleven miles cards beat the cash-back card, among them Barclaycard Arrival Plus, Chase Sapphire Preferred and Southwest Rapid Rewards Premier card (see The Best Rewards Card for You). Note that all the winning miles cards charge an annual fee. “For consumers who want to pay no annual fee, a 2% cash-back card like Citi Double Cash is usually a better bet” than a travel rewards card for domestic flight awards, according to MileCards. And both travel and cash-back redemptions have a higher value, on average, than merchandise, according to Wallet­Hub.com.

Advertisement
Advertisement - Article continues below
Advertisement - Article continues below

Ultimately, your own spending patterns and preferences dictate which card will work best for you. A no-fee card that lets you rack up miles or points may be the best way to save for a vacation, even if the card doesn’t offer the highest payback. If you prefer a simple strategy for collecting and redeeming rewards, a no-fee cash-back card is hard to beat.

Advertisement

Most Popular

2020 Stock Market Holidays and Bond Market Holidays
Markets

2020 Stock Market Holidays and Bond Market Holidays

Is the market open today? Take a look at which holidays the stock markets and bond markets take off in 2020.
July 1, 2020
What Are the Income Tax Brackets for 2020 vs. 2019?
tax brackets

What Are the Income Tax Brackets for 2020 vs. 2019?

The IRS unveiled the 2020 tax brackets, and it's never too early to start planning to minimize your future tax bill.
June 20, 2020
Searching for the Perfect Place to Retire
Empty Nesters

Searching for the Perfect Place to Retire

We home in on two places with less traffic and lower costs. 
July 2, 2020

Recommended

52 Super Deals and Discounts for 2020
spending

52 Super Deals and Discounts for 2020

With a special nod to those of you spending more time at home, we found dozens of deals and discounts, plus ways to save (or make) money.
June 6, 2020
Banks Canceling Credit Cards, Cutting Limits
credit & debt

Banks Canceling Credit Cards, Cutting Limits

If you haven’t used a card in awhile, make a small purchase with it to keep it open. It’s good for your credit score.
June 4, 2020
Milliennials Face Their Second Recession
credit & debt

Milliennials Face Their Second Recession

Forty percent of millennials say the pandemic will likely cause them to delay payments on their debts. Does that include you? Time to take action.
June 4, 2020
When Savings Bonds Make Sense
credit & debt

When Savings Bonds Make Sense

Series I savings bonds are safe options, but don’t go all in.
June 3, 2020