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

12 Tax Deadlines for July 15 (It's Not Just the Due Date for Your Tax Return)
tax deadline

12 Tax Deadlines for July 15 (It's Not Just the Due Date for Your Tax Return)

Between due dates for paying estimated taxes, IRA or HSA contributions, and other deadlines, there's more to do by July 15 than just filing your feder…
July 14, 2020
65 Best Dividend Stocks You Can Count On
stocks

65 Best Dividend Stocks You Can Count On

These 65 Dividend Aristocrats are an elite group of dividend stocks that have reliably increased their annual payouts every year for at least a quarte…
July 8, 2020
Tax Day 2020: When's the Last Day to File Taxes?
tax deadline

Tax Day 2020: When's the Last Day to File Taxes?

Thanks to the coronavirus pandemic, the 2020 tax deadline was pushed back to give taxpayers (and tax preparers) more time to file returns.
July 14, 2020

Recommended

Know Why Your Credit Score Changes: 9 Money Moves to Consider
credit & debt

Know Why Your Credit Score Changes: 9 Money Moves to Consider

Your credit score is a key indicator of your financial well-being and of the risk you pose to lenders. How good is yours?
July 10, 2020
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