Cash back or Airline miles

Most of my credit cards have 1% for all other expenses. I am wondering if in this case, does it make more sense to put those miscellaneous all other expenses on one of our airline cards. For example if you have a $4000 expense at 1% would net $40, but 4000 airline miles. I’m thinking of doing this for large annual purchases such as insurance, property taxes or heating propane. None of these has a higher cashback category.

I would recommend considering a cash back card which pays a higher amount. I use the Wells Fargo Active Cash® Credit Card. This card pays back 2% on everything. There are no limits to the cash back, no categories for the cash back, and no fees to the card. Clark’s website provides information on similar cards that may pay a little more.

I have had airline miles credit cards in the past, but I have given them up. I found that using the points is a hassle and often not the same value as cash back.

For me, I tend to use a single card for most purchases to maximize the rewards.

Cash is King!!! We use our Costco Visa exclusively and the reward pays for the membership and then some. Also Costco has the least expensive gas. To avoid the long lines, get gas early in the morning - the gas station opens before the store opens.

I don’t bother with cards that only pay 1%. Alliant CU’s Visa pays 2.5% back on everything. That changes the decision to 4000 airline miles or $100, which is a very easy decision for me.

Thank you. I am not looking to add a card at this time otherwise I would agree adding a higher value % card would be worthwhile.

I agree that if I get a new card it will have a higher percentage. I was looking for feedback on the 1% or miles the better deal and I appreciate your answer.

Yes I have the Sams club card for my gas purchases.

I still prefer cash, but it’s closer to a toss-up at that rate. Cash (for now at least) is good at any airline or indeed any business. Cash can’t be devalued by the airline, and won’t disappear when the airline goes out of business.

Most things I have read value airline miles at 1%. So your 4000 miles would be worth $40. You can do your own comparison. Just go into your airline website and try to book a ticket in dollars and miles. I think you will find that a $300 ticket will require about 30,000 miles or about 1% value plus or minus a few thousand miles.

I’ve had the same question for years. Airline miles used to be more generous. Now they often are valued at 1% or less so keeping the cash back card makes sense. However, there are sometimes flights where miles are worth more than 1%. If you can travel spontaneously and like searching travel deals (as stated on today’s podcast), then having miles can be fun and rewarding.

Also for some airlines, having a lot of miles may help with more status or perks like first checked bag free, but those are pretty rare these days.

I would suggest just giving up on trying to accumulate miles and instead just enjoy the 1% back. There’s an awful lot of time and mental energy spent on trying to play the mileage game.