# Points vs cash back

All about maximizing your rewards!
Members share tips and tricks for getting the most miles, & points.
28 posts

kcm7
Centurion Member

Posts: 354
Joined: Wed Feb 19, 2014 10:05 pm
Location: TX
wiivile wrote:I don't think you can include a guy's previously earned United frequent flyer miles into the mathematics of this equation... though if you are a frequent flyer on United, BA, Southwest, etc, the card does have some added intangible value of you being able to "top off", but it really doesn't factor into the mathematics of the rewards.

That was sort of my point. It's not always about the math, and cards don't exist in a vacuum. You have to take into account what else you're doing (travel plans, and which other FF accounts you have). I agree that the OP (who didn't mention any affiliation with FF programs) would probably benefit more from cash back.
Cards:

-Capital One Quicksilver
-Barclaycard Arrival (no AF)
- US Bank (no rewards)
-IHG

NuHere
Green Member

Posts: 19
Joined: Sat Nov 08, 2014 6:01 pm
Location: New York, NY
freyj6 wrote:In your case the question is whether \$360 per month + conversion of Freedom's points justifies an annual fee for CSP. That all depends on the value you get from UR points.

The best use of UR points is through their transfer partners. People are sometimes able to get a value of 1.5-3 cents per point depending on what routes they fly.

http://thepointsguy.com/2013/03/maximize-monday-ranking-the-chase-ultimate-rewards-transfer-partners/

http://thepointsguy.com/2014/10/10-ways-to-maximize-70000-chase-ultimate-rewards-points/

Let's assume that with restaurants included you spend \$400 a month in CSP's bonus categories, or \$4800 a year. In that case, you'd have to get a value of 2 cents out of UR points (2 cents = 4% back, subtract the 2% you'd be getting anyway and you have 2% extra back. 2% of \$4800 = \$96). So it would be worth it if you get a value of 2 or more, which really just depends on what routes you fly. If you consistently fly a route that has a really great conversion rate on a certain airline, 2+ cents is pretty easy. If you don't, 1.5 is a bit more realistic.

Obviously the more you spend the less value you'd have to get out of UR points. So if you spend \$6000 it would be less. Freedom categories also play a big role because if you spent a combined \$2000 in Freedom 5% categories, even if you only got 1.5 cents per point, you'd still cover half the annual fee just by turning that 5% into 7.5%.

Cheers

Thank you for those links and for breaking down how much UR points value would be necessary! I'd basically have to get another affiliated airline credit card to collect miles with as well. So if I'm using their credit card, that means I'm not using Chase credit cards.. and vice versa. Given that I spend around \$20k a year total (this year might be more, last year was less), it would probably take me longer to collect the needed amount of points, unless the airline credit cars reward rate is higher than let's say 2%. I didn't have much time this weekend, but I'll look into it. The most frequent route I fly is to Czech Republic.

wiivile wrote:You live in NYC and your biggest expense is groceries? Haha, I don't even have a kitchen. The reason I love this city is that I can get take out every night and never have to cook.

I couldn't afford to get take out every day.

kcm7 wrote:I agree that the OP (who didn't mention any affiliation with FF programs) would probably benefit more from cash back.

I'm not up on the terminology yet, but you're right. I don't have any. That's what I meant when I said I didn't have any card with a specific airline.

freyj6
Platinum Member

Posts: 82
Joined: Tue Jan 28, 2014 5:29 am
Location: United States
Why do you need an airline card too? You don't need an airline card to transfer points to that airline.
Current Strategy

Chase Freedom + Discover IT + Churning

NuHere
Green Member

Posts: 19
Joined: Sat Nov 08, 2014 6:01 pm
Location: New York, NY
freyj6 wrote:Why do you need an airline card too? You don't need an airline card to transfer points to that airline.

I thought I did. I misunderstood the way it worked then. I thought I had to have a credit card associated with one of the affiliated airlines. I'd earn miles with that one as well as with CSP. Then I would transfer CSP's miles to airline credit card miles and use them when purchasing tickets.

freyj6
Platinum Member

Posts: 82
Joined: Tue Jan 28, 2014 5:29 am
Location: United States
No all you need is an account with them, which is pretty much as easy as entering your email address and password. Most airlines you get miles for flying and booking on their site, whether you have their CC or not. You just need an account with the airline.
Current Strategy

Chase Freedom + Discover IT + Churning

takeshi
Centurion Member

Posts: 1741
Joined: Wed Jun 05, 2013 3:12 pm
Location: US
wiivile wrote:Is it worth it, though, when the Double Cash gives you 2 cents on everything with no annual fee and without having to work hard to maximize the value of every single point?

Worth is always highly subjective regardless of topic. That's your call to make. For some it's worth it. For others it is not. There are a number of different considerations at play and the priorities and preferences associated with those considerations can vary from person to person. You can't just rely on generalizations to make decisions like this. It's how your specifics factor in that matter and you just to have to determine the weight of each one for yourself.

wiivile wrote:And the only scenarios I've seen with really good point values (3 cents+) are on international first class flights, which to most people is unrealistic, since you need absurd amount of points. (In general I find first class to be a huge waste of money unless you're a really really tall person and can't stand economy size seats).

Again, subjective. There are plenty that find it worthwhile because their spend and travel priorities support booking reward travel in premium cabins. You can't determine "absurd" or "waste" for others. You can only determine it for yourself. You need to make your own decision based on your specific situation and preferences. It does sound to me like a simple flat 2% cash back option might be better suited to you based on what you've stated.

wiivile wrote:I don't think you can include a guy's previously earned United frequent flyer miles into the mathematics of this equation...

While it might be irrelevant to you it certainly matters to that guy. That's the nature of subjectivity. My nearly exclusive travel on United is one major reason why I focus on UR cards. Does that matter to others? I can't say and, frankly, I don't care. It's up to others to determine the importance of the different considerations.

In any case, that guy was just presented as an example where other considerations could matter.

NuHere wrote:I'd earn miles with that one as well as with CSP. Then I would transfer CSP's miles to airline credit card miles and use them when purchasing tickets.

Nope. The miles/points are in frequent flier accounts with the airlines. The cobranded airline cards just accrue miles/points in the FF programs. They don't accrue their own miles.

That said, the airline cards could still be useful if one values the associated travel benefits. A frequent enough traveler with sufficient status may be getting some or all of those benefits already.

NuHere
Green Member

Posts: 19
Joined: Sat Nov 08, 2014 6:01 pm
Location: New York, NY
freyj6 wrote:No all you need is an account with them, which is pretty much as easy as entering your email address and password. Most airlines you get miles for flying and booking on their site, whether you have their CC or not. You just need an account with the airline.

I see. Thanks! So in order to make this worth it, I'd have to keep flying with the same airline. I have been usually just getting a ticket with whoever is offering the best (cheapest) deal when I need to fly. So it's been BA, Lufthansa, KLM, CSA and others.

As kcm7 pointed out, since I'm only flying once a year (sometimes twice), I might be getting a better value out of cash back?

takeshi
Centurion Member

Posts: 1741
Joined: Wed Jun 05, 2013 3:12 pm
Location: US
NuHere wrote:I see. Thanks! So in order to make this worth it, I'd have to keep flying with the same airline.

Not necessarily. You'd just transfer points/miles to a given airline as needed.

Again, frequency of travel doesn't tell you in and of itself. Crunch the numbers. It's like any other rewards comparison. It's entirely possible that one could benefit from flying only once or twice a year while another could not. If I had to guess I'd guess that cash back would be better suited to you.

wiivile
Centurion Member

Posts: 151
Joined: Mon Apr 22, 2013 10:05 pm
Location: New York, NY
I flew once this year roundtrip to Brasil for 50,000 Avios (via CSP) on a flight that would have cost \$1000+. So it saved me over \$500 in that case, since with any "cash back" card my 50,000 points would have been worth just \$500.

Clearly I am not a "frequent flyer". As with everything credit card related, YMMV.
Chase Sapphire Preferred Visa Signature: 11/2013, \$15,000 CL
Chase Freedom Visa: 11/2009, \$4,700 CL
U.S. Bank Cash+ Visa Signature: 11/2013, \$11,200 CL

NuHere
Green Member

Posts: 19
Joined: Sat Nov 08, 2014 6:01 pm
Location: New York, NY
takeshi wrote:Not necessarily. You'd just transfer points/miles to a given airline as needed.

Again, frequency of travel doesn't tell you in and of itself. Crunch the numbers. It's like any other rewards comparison. It's entirely possible that one could benefit from flying only once or twice a year while another could not. If I had to guess I'd guess that cash back would be better suited to you.

But the more often you fly (with same airline), the more miles you accumulate with them, right? Since you are adding those to CSP miles, wouldn't it be beneficial to fly with the same airline?

Let's say your spending is whatever it is. That's how you collect points with CSP. It's set because you spend x amount of dollars regardless of what card you use. If in addition you have miles from your flights with one airline, there is a bigger sum of points to be used.... as opposed to having some miles with one airline, some miles with another airline. Then the total amount of points is the same, but it's distributed through more accounts, so to speak. Does it make sense?

wiivile wrote:I flew once this year roundtrip to Brasil for 50,000 Avios (via CSP) on a flight that would have cost \$1000+. So it saved me over \$500 in that case, since with any "cash back" card my 50,000 points would have been worth just \$500.

Clearly I am not a "frequent flyer". As with everything credit card related, YMMV.

Then it's also a question of how fast you can accumulate those points. Yes, 50 000 points would be worth only \$500, but if some cash back cards give you more %, the same amount dollars spent might give you the same \$500 faster, which would even it out., right?

Citi Double Cash gives 2% on everything. CSP gives 2 points in some categories, 1 point on others. Then it's back to square one... value of points through UR versus how many points would you collect with some higher rate cash back cards.

Return to “Rewards”

### Who is online

Users browsing this forum: No registered users and 3 guests