Thread: Question about relative value of travel rewards versus cashback

I would say more often than not, travel credit cards are not the way to go. Often they carry an annual fee and the level of rewards only equals around 1% on spending, with the exception of purchases at the affiliated airline, hotel, etc. which may be 2% or 3%. As mentioned the ticket prices vary so greatly it's not always transparent how much value you are getting. What I would recommend is pricing out the number of miles/points needed for a common flight route you might take. Let's say it was 37,500 miles needed for a roundtrip. If the card is only earning 1 mile per dollar and the price of that ticket is around $375 if you bought it instead with cash, then the card doesn't make sense. Back when 25,000 miles could get you good round trip tickets I think airline cards were more lucrative but as of lately from my experience it has been hard to find a basic domestic roundtrip flight I would use for 25k miles.

But like ccrebate pointed out, there are situations where a travel card may be the best bet for its other benefits. The Delta card was a good example because saving the checked baggage fees in and of itself is quite substantial. Airport lounge access and other perks on the high end cards also may be worthwhile for frequent travelers. But generally I think the average person is better off with a no annual fee high cash back credit card than they are with a travel card.

What I dont get is how to all the airline cards get away with annual fees when the miles you get are only worth like 1%