Credit Card Rewards Roulette – Cash Back, Miles or Points

by Credit Card Wisdom on November 30, 2012

Credit card holders enjoy receiving rewards for their spending. And these rewards can take the form of cash back, miles, or points in loyalty programs offered by the card issuers. And while each credit card user has to decide which type of reward credit cards offer the most value, there are a few guidelines that can help them.

Who should earn cash back rewards

Cash back credit card rewards are best for those who value liquidity over travel rewards. Those who prefer cash back often realize that there are many problems with airline miles. For example, an airline can suddenly devalue its miles by raising award rates, curtailing award availability, or imposing fees and surcharges on awards. In fact, airline miles can be revoked all together due to inactivity. Another advantage of cash back awards is that many of the cash back cards have no annual fee. In contrast, airline reward cards tend to charge large annual fees that make them ill suited to those with more modest spending requirements.

Who should use airline mileage cards

Airline affiliated cards are best suited for those who are already customers of the airline. The best part about these cards is the perks that they offer to travelers who might not have reached elite levels. These benefits typically include waived checked baggage fees, priority boarding, and reduced mileage requirements for awards. Cardholders who can add the mileage earned through spending to the miles they already have can benefit greatly from these cards. Finally, those who use airline miles for premium class international awards or for last minute travel will always receive more value than those who fly advance purchase, discounted domestic economy tickets.

 Who should earn bank loyalty points

The card issuers such as American Express, Chase, and Citi have created their own proprietary loyalty point programs to compete with airline mileage systems. These programs can combine the best aspects of cash back rewards and airline miles. For example, Chase’s Ultimate Rewards points can be redeemed for cash back, or in many cases, transferred to airline miles. This feature offers a hedge against a particular airline devaluing its mileage while offering cardholders the opportunity to receive cash back at any time.

By understanding all of the three major types of reward cards, and which ones are ideal for different types of people, credit card users can choose the best product for their individual needs. is an independent, advertising-supported comparison service. receives compensation from the credit card issuers whose credit card offers appear on the website. The compensation may impact the order in which they appear within listing categories. does not include the entire universe of available credit or financial offers. Our editors rate credit cards objectively based on the features the credit card offers consumers, the fees and interest rates, and how a credit card compares with other cards in its category. The Editor's Picks credit cards are the expert opinion of our editors, and not influenced by any remuneration this site receives from card issuers.
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