Credit card: Cash versus Flight Miles

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LowER
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Credit card: Cash versus Flight Miles

Post by LowER » Thu Feb 23, 2017 8:25 am

I recently got the travel bug and I've read some threads on how to use/churn cads but I don't think that I've ever seen anyone ask the question about whether, dollar for dollar, is someone better off using a cash back card (like AMEX Blue Preferred) and then using the cash to fly or whether using a flight miles card is superior? I have seen this hinted at in other threads and forums, but has someone actually taken a close look at the comparison?

I spend a few thousand a month on my AMEX Blue preferred, on various things, and in the future some will be on flights.

Jags4186
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Re: Credit card: Cash versus Flight Miles

Post by Jags4186 » Thu Feb 23, 2017 8:34 am

The answer is, as always, it depends.

If you're flexible, points are generally better. (I can leave Wednesday at 5AM and come back the following Thursday at 11PM vs. leaving Saturday at 9am and coming back the following Saturday at 2PM)

If your goal is to fly international first or business class (and you can earn enough to purchase the ticket with points), points are generally better.

If your goal is to fly international economy, it's a toss up IMO.

Domestic coach flights, cashback is usually better.

Drew777
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Re: Credit card: Cash versus Flight Miles

Post by Drew777 » Thu Feb 23, 2017 8:46 am

LowER wrote:I recently got the travel bug and I've read some threads on how to use/churn cads but I don't think that I've ever seen anyone ask the question about whether, dollar for dollar, is someone better off using a cash back card (like AMEX Blue Preferred) and then using the cash to fly or whether using a flight miles card is superior? I have seen this hinted at in other threads and forums, but has someone actually taken a close look at the comparison?

I spend a few thousand a month on my AMEX Blue preferred, on various things, and in the future some will be on flights.
Most people churning cards are earning the vast majority of their points from signup bonuses, not normal spending. However, mile/point earning cards can be better than cash back if you're using one that earns more than one mile per dollar. Chase Freedom Unlimited (paired with a Sapphire Reserve/Preferred or Ink) earns 1.5 points per dollar. Amex Everyday Preferred earns 1.5x on all purchases, 3x on gas, and 4.5x on groceries if you make 30 transactions a month. SPG earns 1x, but you can transfer 20k points to 25k airline miles. I'd say the average value of most airline miles is around 1.5 cents per mile, with some like Alaska being higher and others like Delta being lower. Of course international flights are going to offer more value, and international premium cabins will give the highest cent per point redemption (which may or may not matter to you).

boglegirl
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Re: Credit card: Cash versus Flight Miles

Post by boglegirl » Thu Feb 23, 2017 8:51 am

First of all, what Jags said...It depends.

I have been enjoying the travel credit card hobby for the last 14 years or so. Most of the bonuses have gone to hotel and airline points, although I've earned quite a bit of cash back, too. We've had some really fantastic vacations, and right now between my husband and me, we still have points that I value at about $20k! The problem is availability, ESPECIALLY with American Airlines. Even if you look a year ahead, it's almost impossible to get European and Hawaiian flights which we booked easily just 3 years ago. I'm not familiar enough with other airlines to comment on their availability. We had to pay cash for our last flights to Hawaii, and a recent trip to Mexico. So much for our $20k in points & miles. :|

So that said, I wouldn't start this hobby today. Too risky that you'd earn the points and then be unable to use them for what you want. I'm using the FIA 2% cash back card for all my spend these days, unless there's a specific travel bonus I'm going for (recently got the Chase Sapphire Reserve).

I learned everything I know about points & miles from the Flyertalk forums, so if you want specific advice that might be a better place to start. For example, Drew mentioned a Chase combination strategy - there is an entire subforum for Chase cards at Flyertalk!
Last edited by boglegirl on Thu Feb 23, 2017 8:55 am, edited 1 time in total.

seanmerron
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Re: Credit card: Cash versus Flight Miles

Post by seanmerron » Thu Feb 23, 2017 8:54 am

LowER wrote:I recently got the travel bug and I've read some threads on how to use/churn cads but I don't think that I've ever seen anyone ask the question about whether, dollar for dollar, is someone better off using a cash back card (like AMEX Blue Preferred) and then using the cash to fly or whether using a flight miles card is superior? I have seen this hinted at in other threads and forums, but has someone actually taken a close look at the comparison?

I spend a few thousand a month on my AMEX Blue preferred, on various things, and in the future some will be on flights.
I did the math in the past and it was pretty close to the same. 1-3%

Still not as good as the ~10% I save by using physical cash for purchases instead of swiping the card because of psychological reasons.

dsmil
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Re: Credit card: Cash versus Flight Miles

Post by dsmil » Thu Feb 23, 2017 9:12 am

Cash back cards can't really compare because with card churning, you're earning the huge sign up bonuses. Earning enough points (or cash back) from spending to earn (or pay for) flights takes a lot of spending, but if you are planning a trip, I'd still side with points. The points required for flights doesn't change day to day like the price does, so you might be able to be more flexible as far as when you book your trip.

amarone
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Re: Credit card: Cash versus Flight Miles

Post by amarone » Thu Feb 23, 2017 9:39 am

As others have said, it depends on personal circumstances. I used to have a Delta Amex but was very frustrated by how difficult it was to get the flights I wanted. Either they were not available or I had to use extra miles (32,500 or 40,000) instead of 25,000. That dropped the value to about 1% I think Delta has got better, but I saw a survey at that time that said Delta FFs could get the flight they wanted only 13% of the time. I'm in Atlanta, so there is little point in trying anyone but Delta.

I dropped the card and got an Amex Blue Cash - old version, into which I am grandfathered. I get a far better deal with cashback - 5% on groceries & gas, and 1.25% on everything else. And there are no blackout dates for cash.

michaeljc70
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Re: Credit card: Cash versus Flight Miles

Post by michaeljc70 » Thu Feb 23, 2017 10:11 am

For me, I use the miles. Like others said, it depends. If you are going to use the miles to go from Chicago to Florida or something like that, you are probably wasting them. I recently bought 2 tickets from Chicago to Barcelona for 120k miles with 2 days notice. It would have cost me thousands of dollars to buy those tickets. If you can use the miles on expensive flights when you want to use them, I think you come out better with miles.

I also used 60k to go to Buenos Aires from Chicago last Nov. That ticket would have cost me $1400, so good deal.

Some destinations using miles there is almost nothing available for the lowest mileage rate even if planning in advance. It just all depends.

np81
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Re: Credit card: Cash versus Flight Miles

Post by np81 » Thu Feb 23, 2017 10:53 am

While I have had no issues booking award flights to Hawaii on American (close to 330 days out), I prefer using miles to upgrade to first class after purchasing economy seats. If you're more flexible with the times you travel and the number of stops you're willing to deal with, you can almost always find MileSAAver reward seats for at least half of the trip, with the other half being AAnytime reward seats. With AAnytime seats, you have many more options. I am less flexible, which is why I prefer using miles for upgrades as opposed to full tickets.

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VictoriaF
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Re: Credit card: Cash versus Flight Miles

Post by VictoriaF » Thu Feb 23, 2017 11:19 am

I fly economy both domestically and internationally. Here are two examples of how credit cards/points/miles work for me.

1. Sign-up bonus
Let's assume there is a Chase card that requires $5,000 spending in return for a 60,000 Ultimate Rewards (UR) points. Let's further assume that I don't have normal every-day spending to satisfy the $5,000 requirement. I can use the new card to pay $5,000 in my estimated taxes and pay 2% fee for using a credit card. Thus, I've lost 2% of $5,000 = $100 in fees on tax-paying. In return for the trouble and lost $100, I get 60k UR points which I can transfer to United Airlines and get a trans-Atlantic economy ticket that otherwise would cost me $1,000-$1,200.

2. Ongoing spending
I keep a Chase Sapphire Preferred (CSP) as the means of accumulating UR points and transferring them to airlines. I am paying $100/year for this privilege. The CSP gives me 2 UR points for travel and restaurant expenses. Let's assume that I have $10,000 per year in travel and restaurant expenses that are not paid for with my other cards. For this spending, I get 200 UR points, which I value at 1.5 cents/point. Thus, using CSP gives me an equivalent of $300, and after subtracting the card's annual fee, a $200 net gain. If instead of using the CSP, I put all these expenses on a card with 2% cashback, I would also have had a $200 gain. Note that if I used a cashback card exclusively and had not used the CSP at all, I would still have to pay CSP's annual fee.

In the first example, using CC points and miles is clearly advantageous. In the second case it's a toss, with caveats. For someone who travels rarely, it may make sense to occasionally get a few credit cards carefully selected to pay for a specific trip, cancel the cards as soon as it's feasible, and wait several years until another occasion comes up.

For someone who travels regularly and spends a fair amount on it, the credit card/points/miles game provides net gains if it's paid prudently.

NOTE: My examples represent my travel priorities. For example, I don't seek chain hotels and don't value their points. Those who do, save large amounts on hotel cards and bonuses. Furthermore, I get economy tickets for my flights. Those who seek business and first class tickets save large amounts in comparison to paying cash for these flights.

Victoria
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ResearchMed
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Re: Credit card: Cash versus Flight Miles

Post by ResearchMed » Thu Feb 23, 2017 12:02 pm

LowER wrote:I recently got the travel bug and I've read some threads on how to use/churn cads but I don't think that I've ever seen anyone ask the question about whether, dollar for dollar, is someone better off using a cash back card (like AMEX Blue Preferred) and then using the cash to fly or whether using a flight miles card is superior? I have seen this hinted at in other threads and forums, but has someone actually taken a close look at the comparison?

I spend a few thousand a month on my AMEX Blue preferred, on various things, and in the future some will be on flights.
We only recently started to use a very large number of accumulated award points/miles, when DH finally agreed that instead of retiring, at least he'd take some "real" vacations.

I admit that we were late to the party in terms of realizing what the value could be to us.
Among the best value is redeeming points for international long haul premium (business or first class) air travel, especially if one has even a modicum of flexibility wrt travel dates.

Here is what we have recently done, and plan to continue to do in terms of redeeming:

Two First Class tickets on JAL from East Coast USA to Japan. The one-way price, per person, would have been ~$10-13,000.
We are returning on Cathay Pacific, for the same "regularly priced" tickets.

Let's say total would have been approximate $40,000 to 50,000 cash for both of us, just for the airfare.
[Gasp]

To the naysayers, OF COURSE (!) we would NOT have paid $50k for one trip to Japan, just for the transportation.
For perspective, at our ages, we just cannot take a 14-15hr flight sitting up or even "reclining". We've noticed that we have trouble recently beyond about 5-6 hours. Years ago, no problem at all.
But IF we wanted to go to Japan, we *would* need at least business class/flat bed, and those tix would cost about $4-5 to 9k per person, one way. We'd need to pay the lowest non-flex fare (if available) or... not go.
(And this is the time of our lives for travel, as long as we remain healthy enough. Hint: Don't keep putting things off, such as travel. Too late for us to "start earlier", so we are catching up now :happy )

The First Class tickets one way each "cost" 80k points (after a recent increase in points needed).
At 2 cents per point redemption, that would be $1,600, which wouldn't get us very far at all, First or Business class.
Business class tickets would have cost 50k points, or $1,000 if redeemed at 2 cents.

So you can do the math: 80k points instead of $10-13,000 one way per person for first; 50k points instead of, say, $4-9,000 for business.

Now... with sales on American with their AAdvantage miles/points, they can be purchased for approx 1.7 - 2 cents each.

We don't think it is worthwhile to use points for domestic travel, especially not for economy class, given we are able to find ultra low fares.
If we needed last minute full-/high-priced domestic tix (or perhaps first class or business tix due to economy being sold out), then we'd probably use points
The "best" use for our purposes for this trip was to use AAdvantage points (via the American Airlines international awards desk) to fly on JAL and Cathay Pacific, much better than flying AA in terms of both quality of seats/beds and also food/service, but it's the seat/bed comfort that really matters to us.

In terms of availability, we had to adjust our outbound flight by one day earlier than originally planned, and our return by one day later.
So, we will have 2 extra days in Japan. Given that we don't know if we'll ever get back, that's fine with us!

This has all taken quite a bit of time doing research about how this all works. I was pretty clueless until just about a year ago.
After not having any success for a different trip last year, I turned to one of the services that will help find itinerary/seats for awards, with no fee until/unless one accepts something they've found/arranged.
When I realized all of the permutations the guy was looking at (I had had NO idea whatsoever!), transferring points from A to B to use on airline C, etc., I realized there were so many more choices than we had realized.
Now I "get it", at least in part.
And the AA international awards desk can help with some of this (although they definitely tried to push us to AA flights, including quietly switching a JAL flight to AA once... so I'm not going to trust them without double/triple checking in the future).

Thus far, we have a lot of points hoarded away, on AAdvantage and also on Amex Plat Awards, from accumulations DH made using our charge cards for business travel and getting reimbused.
These allow us access to two mostly non-overlapping airline partner networks.
(There are a few business trips we prefer not to do this way, given the long lag in a few specific cases to be reimbursed, but we are going to reconsider this.)

Because we typically will be quite flexible for vacation travel, we are delighted that we discovered all of this just as we were getting started on significant vacationing.
We'll use points for premium air travel, unless we find a similar value (to us), OR if we need the points for last-minute domestic travel where cheap fares just aren't available, *and* the value is more than we could purchase the points for.

I had help from a few BH'ers who sent PM's last year with more suggestions/assistance, and we remain very grateful.
[Again, you know who you are, and thank you again!]
So let me know if you'd like any starting help in more detail, so we can pass the favor along.

Enjoy your travels!

RM
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killjoy2012
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Re: Credit card: Cash versus Flight Miles

Post by killjoy2012 » Thu Feb 23, 2017 12:23 pm

As others have hinted at, I think you need to separate the CC game into optimizing "sign up bonuses" vs. "everyday spend". Cash is always better than points when comparing the points at their realistic cash-equivalent value -- but that rarely is the real question. The real answer is that sign up bonuses are the best bang for buck (time/effort spent) for getting max value with the least amount of work, and in the shortest duration. But those sign up bonuses are almost always points - not cash back.

High category cash back cards - like BCP, PenFed Cash Rewards, the 2% on everything cards, etc. - are great tools to get in your wallet long term, but not nearly as efficient in terms of accumulating points/cash.

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Re: Credit card: Cash versus Flight Miles

Post by Caduceus » Thu Feb 23, 2017 12:25 pm

I think you should research the actual flight route you want to redeem. I had 100,000 miles after two cc signing bonuses that I happily took and ordinarily they would have been a good deal. But it so happens that particular carrier didn't have competitive pricing on the places I wanted to go to anyway, so if I had just bought the fare on the open market with a competitor, I wouldn't have spent that much. So, that devalued the points I had, unfortunately.

If you're earning miles using an airline that is itself already a low-price leader in your particular itinerary, it is likely to be worth it.

betablocker
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Re: Credit card: Cash versus Flight Miles

Post by betablocker » Thu Feb 23, 2017 12:32 pm

You also want a travel card for international trips because the usually don't have foreign transaction fees. That can kill you on a cash back card.

Drew777
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Re: Credit card: Cash versus Flight Miles

Post by Drew777 » Thu Feb 23, 2017 12:33 pm

Caduceus wrote:I think you should research the actual flight route you want to redeem. I had 100,000 miles after two cc signing bonuses that I happily took and ordinarily they would have been a good deal. But it so happens that particular carrier didn't have competitive pricing on the places I wanted to go to anyway, so if I had just bought the fare on the open market with a competitor, I wouldn't have spent that much. So, that devalued the points I had, unfortunately.

If you're earning miles using an airline that is itself already a low-price leader in your particular itinerary, it is likely to be worth it.
Accumulating points/miles with a specific use in mind often doesn't work out well, unless you're talking flexible points. The points and miles game is easier to take advantage of when you have lots of flexibility.

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TinkerPDX
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Re: Credit card: Cash versus Flight Miles

Post by TinkerPDX » Thu Feb 23, 2017 12:41 pm

LowER wrote:I recently got the travel bug and I've read some threads on how to use/churn cads but I don't think that I've ever seen anyone ask the question about whether, dollar for dollar, is someone better off using a cash back card (like AMEX Blue Preferred) and then using the cash to fly or whether using a flight miles card is superior? I have seen this hinted at in other threads and forums, but has someone actually taken a close look at the comparison?

I spend a few thousand a month on my AMEX Blue preferred, on various things, and in the future some will be on flights.
I've often wished for a definitive answer, but unfortunately I don't think there is one. All of the posts above help shed light. My conclusion has been that at 2% cash back, cash is better than miles -- but that if you're willing to take the time to be careful to max out all bonus options and you are doing a lot of travel, the miles can be a better ROI.

For me, we don't travel a ton right now, I know exactly what the value of that 2% cash back is, and the administrative/transaction cost of the miles is way higher, so we go with cash-back.

I think that calculus will likely change once I'm out of the crazy-busiest phase of my career, and once our kids are old enough to enjoy traveling with us (and/or be left behind).

ResearchMed
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Re: Credit card: Cash versus Flight Miles

Post by ResearchMed » Thu Feb 23, 2017 12:47 pm

TinkerPDX wrote:
LowER wrote:I recently got the travel bug and I've read some threads on how to use/churn cads but I don't think that I've ever seen anyone ask the question about whether, dollar for dollar, is someone better off using a cash back card (like AMEX Blue Preferred) and then using the cash to fly or whether using a flight miles card is superior? I have seen this hinted at in other threads and forums, but has someone actually taken a close look at the comparison?

I spend a few thousand a month on my AMEX Blue preferred, on various things, and in the future some will be on flights.
I've often wished for a definitive answer, but unfortunately I don't think there is one. All of the posts above help shed light. My conclusion has been that at 2% cash back, cash is better than miles -- but that if you're willing to take the time to be careful to max out all bonus options and you are doing a lot of travel, the miles can be a better ROI.

For me, we don't travel a ton right now, I know exactly what the value of that 2% cash back is, and the administrative/transaction cost of the miles is way higher, so we go with cash-back.

I think that calculus will likely change once I'm out of the crazy-busiest phase of my career, and once our kids are old enough to enjoy traveling with us (and/or be left behind).
You raise an interesting question. All of these related threads deal with travel (air, hotels, etc.) as part of the equation.

This should probably be a separate new thread if anyone is interested in non-travel perks, but *are* there any serious perks for using charge cards other than cash back (plus extended warranty or "price guarantees within x time" or such)?
That is, can the points be "used" for anything such as other purchases for significantly more than the cash back equivalent?
Again, best for a different thread if anyone is interested.
(We aren't, at least not while we can still travel. Later, "points for nursing homes" might be of interest. :shock: )

RM
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Drew777
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Re: Credit card: Cash versus Flight Miles

Post by Drew777 » Thu Feb 23, 2017 12:51 pm

ResearchMed wrote:
TinkerPDX wrote:
LowER wrote:I recently got the travel bug and I've read some threads on how to use/churn cads but I don't think that I've ever seen anyone ask the question about whether, dollar for dollar, is someone better off using a cash back card (like AMEX Blue Preferred) and then using the cash to fly or whether using a flight miles card is superior? I have seen this hinted at in other threads and forums, but has someone actually taken a close look at the comparison?

I spend a few thousand a month on my AMEX Blue preferred, on various things, and in the future some will be on flights.
I've often wished for a definitive answer, but unfortunately I don't think there is one. All of the posts above help shed light. My conclusion has been that at 2% cash back, cash is better than miles -- but that if you're willing to take the time to be careful to max out all bonus options and you are doing a lot of travel, the miles can be a better ROI.

For me, we don't travel a ton right now, I know exactly what the value of that 2% cash back is, and the administrative/transaction cost of the miles is way higher, so we go with cash-back.

I think that calculus will likely change once I'm out of the crazy-busiest phase of my career, and once our kids are old enough to enjoy traveling with us (and/or be left behind).
You raise an interesting question. All of these related threads deal with travel (air, hotels, etc.) as part of the equation.

This should probably be a separate new thread if anyone is interested in non-travel perks, but *are* there any serious perks for using charge cards other than cash back (plus extended warranty or "price guarantees within x time" or such)?
That is, can the points be "used" for anything such as other purchases for significantly more than the cash back equivalent?
Again, best for a different thread if anyone is interested.
(We aren't, at least not while we can still travel. Later, "points for nursing homes" might be of interest. :shock: )

RM
The short answer is no. For anything other than travel points are usually going to be worth 1 cent or less.

WhiteMaxima
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Re: Credit card: Cash versus Flight Miles

Post by WhiteMaxima » Thu Feb 23, 2017 1:03 pm

If you fly during peak season or unplanned, use milage. If you can plan ahead, you can always find cheap ticket with cash.

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VictoriaF
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Re: Credit card: Cash versus Flight Miles

Post by VictoriaF » Thu Feb 23, 2017 1:16 pm

WhiteMaxima wrote:If you fly during peak season or unplanned, use milage. If you can plan ahead, you can always find cheap ticket with cash.
It depends. When I was planning an off-season trip to the Czech Republic award tickets were cheaper than cash tickets. When I was planning a peak-season trip to France and Spain, cash tickets were ridiculously cheap and I did not use my miles.

Similarly, when I have an unplanned or near-term travel, reward tickets are frequently not available, or I have to use more miles than a standard.

The cheapest way to travel is opportunistic travel, when you just want to get out without much regard for where and when. Right now bloggers are pointing out to $70 one-way flights from secondary airports in NY state to Ireland. If you live close to one of these airport, and you want to visit Ireland, and you have no other plans during the period of these flights' availability--then you can travel extremely inexpensively for cash. But for most people, including retirees, at least some of my "ifs" do not hold.

Victoria
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Re: Credit card: Cash versus Flight Miles

Post by an_asker » Thu Feb 23, 2017 1:29 pm

WhiteMaxima wrote:If you fly during peak season or unplanned, use milage. If you can plan ahead, you can always find cheap ticket with cash.
I agree with VictoriaF that, while you are right for the most part, it still depends (on the destination, the season, the year, etc). For example, right now, I'm having a tough time to get summer tickets (though it is peak season and we're still a good four-five months away from travel) to Alaska from Central Florida on United points. Usually I've had good luck with redeeming them (not to Alaska), just not this time.

TLDR: It depends!

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Re: Credit card: Cash versus Flight Miles

Post by WhiteMaxima » Thu Feb 23, 2017 1:45 pm

You can always buy milage if you like.

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Re: Credit card: Cash versus Flight Miles

Post by giesen5 » Thu Feb 23, 2017 1:48 pm

Drew777 wrote:
Caduceus wrote:I think you should research the actual flight route you want to redeem. I had 100,000 miles after two cc signing bonuses that I happily took and ordinarily they would have been a good deal. But it so happens that particular carrier didn't have competitive pricing on the places I wanted to go to anyway, so if I had just bought the fare on the open market with a competitor, I wouldn't have spent that much. So, that devalued the points I had, unfortunately.

If you're earning miles using an airline that is itself already a low-price leader in your particular itinerary, it is likely to be worth it.
Accumulating points/miles with a specific use in mind often doesn't work out well, unless you're talking flexible points. The points and miles game is easier to take advantage of when you have lots of flexibility.
But it can work out if you plan accordingly. I started collecting points January 2016 for a family trip to Italy June 2017. By June of 2016 I had enough points for 4 round trip tickets to Italy (Chase sign-ups) and $2000 to put towards air bnb (Barclay Arrival Plus and Capital One). My points collection was helped by both me and my wife signing up for cards.

ResearchMed
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Re: Credit card: Cash versus Flight Miles

Post by ResearchMed » Thu Feb 23, 2017 1:55 pm

WhiteMaxima wrote:You can always buy milage if you like.
I know that we can get AAdvantage points pretty frequently ("sales" every few weeks thus far) for approx 1.7-2 cents each (closer to 3 cents each "regularly").

Do you happen to know what a few other airline/network awards points cost if purchased for cash?

One small potential problem with AA is the restriction of "cannot purchase more than 100k mile/points per year, although that does *not* include the extra up to 40+% points during the sales. So a little planning might eventually be needed, especially if those bonus points for opening new cards/accounts start to dry up too much.

We don't need any now, but if we take a couple more trips (and I sure hope we will!), then we might want to buy some extra points.

Thanks!

RM
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Re: Credit card: Cash versus Flight Miles

Post by srmach05 » Thu Feb 23, 2017 1:57 pm

The Points Guy (thepointsguy.com) does a monthly valuation of $ value per point for each points/CC program.

It is a bit subjective - "these valuations are based on a combination of how much TPG would pay to buy points if given the opportunity, and the overall value I could get from redeeming them." The guy does this for a living though, so I generally trust his expertise.

Also a pretty good website to keep tabs on flight deals, CC sign-up bonuses, and CC benefit reviews.

ResearchMed
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Re: Credit card: Cash versus Flight Miles

Post by ResearchMed » Thu Feb 23, 2017 2:04 pm

srmach05 wrote:The Points Guy (thepointsguy.com) does a monthly valuation of $ value per point for each points/CC program.

It is a bit subjective - "these valuations are based on a combination of how much TPG would pay to buy points if given the opportunity, and the overall value I could get from redeeming them." The guy does this for a living though, so I generally trust his expertise.

Also a pretty good website to keep tabs on flight deals, CC sign-up bonuses, and CC benefit reviews.
I'm referring to the cost to BUY the points from the card company (no gray market or such).

I find The Points Guy's valuation to be ridiculously low, but that's because of the way *we* use the points.
For someone using them differently, the "value" to them could easily be much lower.

And the "usage" value can really fluctuate according to each particular use, even by the same person.

RM
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Re: Credit card: Cash versus Flight Miles

Post by nova1968 » Thu Feb 23, 2017 7:09 pm

TinkerPDX wrote:
LowER wrote:I recently got the travel bug and I've read some threads on how to use/churn cads but I don't think that I've ever seen anyone ask the question about whether, dollar for dollar, is someone better off using a cash back card (like AMEX Blue Preferred) and then using the cash to fly or whether using a flight miles card is superior? I have seen this hinted at in other threads and forums, but has someone actually taken a close look at the comparison?

I spend a few thousand a month on my AMEX Blue preferred, on various things, and in the future some will be on flights.
I've often wished for a definitive answer, but unfortunately I don't think there is one. All of the posts above help shed light. My conclusion has been that at 2% cash back, cash is better than miles -- but that if you're willing to take the time to be careful to max out all bonus options and you are doing a lot of travel, the miles can be a better ROI.

For me, we don't travel a ton right now, I know exactly what the value of that 2% cash back is, and the administrative/transaction cost of the miles is way higher, so we go with cash-back.

I think that calculus will likely change once I'm out of the crazy-busiest phase of my career, and once our kids are old enough to enjoy traveling with us (and/or be left behind).
I agree with the 2%. I had Delta AM EXP for several years. They started out with 25,000 miles for a free trip in the US but most often than not its 50,000 points, At 2% that's a $1000 airfare ticket, You can fly anywhere in the states for that amount and to most places in Europe.

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Re: Credit card: Cash versus Flight Miles

Post by Kiter » Thu Feb 23, 2017 7:33 pm

I have put the time in to collect them , but the saying is " Earn them and burn them" don't expect them to hold value or flights to be available at low redeemable rates.

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Re: Credit card: Cash versus Flight Miles

Post by Drew777 » Fri Feb 24, 2017 6:20 am

giesen5 wrote:
Drew777 wrote:
Caduceus wrote:I think you should research the actual flight route you want to redeem. I had 100,000 miles after two cc signing bonuses that I happily took and ordinarily they would have been a good deal. But it so happens that particular carrier didn't have competitive pricing on the places I wanted to go to anyway, so if I had just bought the fare on the open market with a competitor, I wouldn't have spent that much. So, that devalued the points I had, unfortunately.

If you're earning miles using an airline that is itself already a low-price leader in your particular itinerary, it is likely to be worth it.
Accumulating points/miles with a specific use in mind often doesn't work out well, unless you're talking flexible points. The points and miles game is easier to take advantage of when you have lots of flexibility.
But it can work out if you plan accordingly. I started collecting points January 2016 for a family trip to Italy June 2017. By June of 2016 I had enough points for 4 round trip tickets to Italy (Chase sign-ups) and $2000 to put towards air bnb (Barclay Arrival Plus and Capital One). My points collection was helped by both me and my wife signing up for cards.
It depends on how flexible you are. Even if you plan everything perfectly there may not be any award flights available for the specific dates and locations you want. You may luck out, but maybe not.

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Re: Credit card: Cash versus Flight Miles

Post by giesen5 » Fri Feb 24, 2017 11:10 am

I mostly agree with this, but pre-planning helps. I ran dummy awards up until the 331 days to buy the ticket. I knew there were flights and right at 331 days I booked the ticket. No problems. If you know what you want and do some research, you can get it.

2015
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Re: Credit card: Cash versus Flight Miles

Post by 2015 » Fri Feb 24, 2017 12:14 pm

VictoriaF wrote:
WhiteMaxima wrote:If you fly during peak season or unplanned, use milage. If you can plan ahead, you can always find cheap ticket with cash.
It depends. When I was planning an off-season trip to the Czech Republic award tickets were cheaper than cash tickets. When I was planning a peak-season trip to France and Spain, cash tickets were ridiculously cheap and I did not use my miles.

Similarly, when I have an unplanned or near-term travel, reward tickets are frequently not available, or I have to use more miles than a standard.

The cheapest way to travel is opportunistic travel, when you just want to get out without much regard for where and when. Right now bloggers are pointing out to $70 one-way flights from secondary airports in NY state to Ireland. If you live close to one of these airport, and you want to visit Ireland, and you have no other plans during the period of these flights' availability--then you can travel extremely inexpensively for cash. But for most people, including retirees, at least some of my "ifs" do not hold.

Victoria
Victoria, your posts on travel points are the best and always appreciated! Since you do a lot of unplanned travel, do you often find you have to travel alone? Retired and single, I'm finding it hard to find reliable travel partners and would just as soon travel alone. This will probably end up costing more due to the "double occupancy" requirements.

MDfive21
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Re: Credit card: Cash versus Flight Miles

Post by MDfive21 » Fri Feb 24, 2017 2:51 pm

why pick cash or miles/points? do both!

see also flyertalk

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Re: Credit card: Cash versus Flight Miles

Post by randomguy » Fri Feb 24, 2017 2:51 pm

michaeljc70 wrote:For me, I use the miles. Like others said, it depends. If you are going to use the miles to go from Chicago to Florida or something like that, you are probably wasting them. I recently bought 2 tickets from Chicago to Barcelona for 120k miles with 2 days notice. It would have cost me thousands of dollars to buy those tickets. If you can use the miles on expensive flights when you want to use them, I think you come out better with miles.

I also used 60k to go to Buenos Aires from Chicago last Nov. That ticket would have cost me $1400, so good deal.

Some destinations using miles there is almost nothing available for the lowest mileage rate even if planning in advance. It just all depends.
How much cash back did you give up to get those 60k points at 2%+ cash back? Obviously it depends on exact details (i.e bonus points, sign up bonuses, bonus spending categories). And of course the question needs to be asked is does having your money trapped in points instead of cash encourage spending that you wouldn't do otherwise (would you have bought the ticket for 1400 if you didn't have points?)? To some extent that is the whole purpose of imaginary currencies. You can debate if that is a good or bad thing.

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Re: Credit card: Cash versus Flight Miles

Post by VictoriaF » Fri Feb 24, 2017 10:36 pm

2015 wrote:Victoria, your posts on travel points are the best and always appreciated! Since you do a lot of unplanned travel, do you often find you have to travel alone? Retired and single, I'm finding it hard to find reliable travel partners and would just as soon travel alone. This will probably end up costing more due to the "double occupancy" requirements.
2015,

My travel is so varied that it's difficult to generalize. When I walk the Camino, I plan it independently. But once I am there, I meet new people all the time, form friendships with some, and occasionally walk together with compatible friends. "Double occupancy" is a luxury on the Camino, typical albergue rooms have 6 to 20 bunk beds; some places have over 60 beds.

Several of my annual trips are for meetings of groups I belong to. The Bogleheads' annual conference is one such meeting. My other groups meet in various places around the U.S., in Europe and in other parts of the world. I have been attending these events for several years and made friends in different places. And so in addition to seeing people at meetings, I get personal invitations to places like France and the Czech Republic. My accommodations vary widely. When I traveled with a Czech group around the Western U.S. we slept four people per room in Motel 6's. When I come to France I stay with friends. When I am attending a meeting I get a private room. In NYC, I stay at a hostel with 8 to 12 bunk beds per room. In European cities I also stay in hostels, but in private rooms. My most comfortable stay this year will be at a high-end hotel/spa in Luhačovice, a spa town in Moravia. My most expensive stay will be in Banff during the film festival.

You are right that it's difficult to find a travel partner with the same interests and who can reliably commit to the same itineraries. And even if you can coordinate the place and time, you must also be compatible in the ability to pay and the extent you may wish to rough it.

Thus, I spread my travel across people, activities, and locations. Comparing to the Bogleheads philosophy, a single travel partner is like a single stock, with variable outcomes, carrying risks as well as returns. By contrast, the people I am with when I travel are like a mutual fund. Not an index fund, but a diversified mutual fund.

Victoria
WINNER of the 2015 Boglehead Contest. | Every joke has a bit of a joke. ... The rest is the truth. (Marat F)

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Re: Credit card: Cash versus Flight Miles

Post by michaeljc70 » Sat Feb 25, 2017 12:20 am

randomguy wrote:
michaeljc70 wrote:For me, I use the miles. Like others said, it depends. If you are going to use the miles to go from Chicago to Florida or something like that, you are probably wasting them. I recently bought 2 tickets from Chicago to Barcelona for 120k miles with 2 days notice. It would have cost me thousands of dollars to buy those tickets. If you can use the miles on expensive flights when you want to use them, I think you come out better with miles.

I also used 60k to go to Buenos Aires from Chicago last Nov. That ticket would have cost me $1400, so good deal.

Some destinations using miles there is almost nothing available for the lowest mileage rate even if planning in advance. It just all depends.
How much cash back did you give up to get those 60k points at 2%+ cash back? Obviously it depends on exact details (i.e bonus points, sign up bonuses, bonus spending categories). And of course the question needs to be asked is does having your money trapped in points instead of cash encourage spending that you wouldn't do otherwise (would you have bought the ticket for 1400 if you didn't have points?)? To some extent that is the whole purpose of imaginary currencies. You can debate if that is a good or bad thing.
I'm not sure what you mean exactly. The miles came from credit card bonuses. The card didn't have a cash option. We were going on a cruise in Europe, so yes, I would have bought the tickets anyway.

"Your money trapped in points". Again, it was a credit card bonus so it was really not my money and was free (excluding time to open the account and the $$ spent to get the bonus which is spending I would do anyway).

Looking past the bonuses, I use a 2% cash back card as I feel it is difficult to get 2 cents a mile and the 2% is guaranteed in cash. I think that might be what you were talking about- ongoing reward accumulation/redemption. Also, to get 60k miles (without bonus) I would have to spend $60k on my credit card (assuming 1 mile per $ spend). That would take me 2-3 years. I can get the cash bonus every month if I want to.

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Re: Credit card: Cash versus Flight Miles

Post by HIinvestor » Sat Feb 25, 2017 3:11 am

We like having our USAA Limitless card with 2.5% cash back! We also like having our Chase Sapphire Preferred Card (CSP) that gives us free UR points that can be used for nearly any airline and most hotels as well. Our D likes to use the UR points to book flights at the list minute at very good rates and we like seeing her. We are happy to have cash back that we can spend as we choose. We do plan to redeem our miles and points, but haven't done much redeeming so far, as we generally get economy plus seats at economy prices which are plenty comfortable for our purposes.

We do sometimes get the signup bonus for credit cards but don't have as much energy to engage in the process as our son. We have mostly settled on USAA and CSP. When irresistible signup bonuses lure us, we will think about it, but mostly we are happy with what we have. USAA has no foreign transaction fee and is a true pin and chip card, which will be handy for foreign travel as well. Most other US cards are actually chip and signature cards and may not work at unmanned kiosks (e.g. in Europe).

When I feel airfares are very over-priced, I will contemplate using points instead and sometimes do, but otherwise I just pay cash and let our D use our points.

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Re: Credit card: Cash versus Flight Miles

Post by michaeljc70 » Sat Feb 25, 2017 9:41 am

HIinvestor wrote:We like having our USAA Limitless card with 2.5% cash back! We also like having our Chase Sapphire Preferred Card (CSP) that gives us free UR points that can be used for nearly any airline and most hotels as well. Our D likes to use the UR points to book flights at the list minute at very good rates and we like seeing her. We are happy to have cash back that we can spend as we choose. We do plan to redeem our miles and points, but haven't done much redeeming so far, as we generally get economy plus seats at economy prices which are plenty comfortable for our purposes.

We do sometimes get the signup bonus for credit cards but don't have as much energy to engage in the process as our son. We have mostly settled on USAA and CSP. When irresistible signup bonuses lure us, we will think about it, but mostly we are happy with what we have. USAA has no foreign transaction fee and is a true pin and chip card, which will be handy for foreign travel as well. Most other US cards are actually chip and signature cards and may not work at unmanned kiosks (e.g. in Europe).

When I feel airfares are very over-priced, I will contemplate using points instead and sometimes do, but otherwise I just pay cash and let our D use our points.
USAA also requires a checking account that is getting a $1000 + monthly direct deposit according to their website.

2015
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Re: Credit card: Cash versus Flight Miles

Post by 2015 » Sat Feb 25, 2017 12:18 pm

VictoriaF wrote:
2015 wrote:Victoria, your posts on travel points are the best and always appreciated! Since you do a lot of unplanned travel, do you often find you have to travel alone? Retired and single, I'm finding it hard to find reliable travel partners and would just as soon travel alone. This will probably end up costing more due to the "double occupancy" requirements.
2015,

My travel is so varied that it's difficult to generalize. When I walk the Camino, I plan it independently. But once I am there, I meet new people all the time, form friendships with some, and occasionally walk together with compatible friends. "Double occupancy" is a luxury on the Camino, typical albergue rooms have 6 to 20 bunk beds; some places have over 60 beds.

Several of my annual trips are for meetings of groups I belong to. The Bogleheads' annual conference is one such meeting. My other groups meet in various places around the U.S., in Europe and in other parts of the world. I have been attending these events for several years and made friends in different places. And so in addition to seeing people at meetings, I get personal invitations to places like France and the Czech Republic. My accommodations vary widely. When I traveled with a Czech group around the Western U.S. we slept four people per room in Motel 6's. When I come to France I stay with friends. When I am attending a meeting I get a private room. In NYC, I stay at a hostel with 8 to 12 bunk beds per room. In European cities I also stay in hostels, but in private rooms. My most comfortable stay this year will be at a high-end hotel/spa in Luhačovice, a spa town in Moravia. My most expensive stay will be in Banff during the film festival.

You are right that it's difficult to find a travel partner with the same interests and who can reliably commit to the same itineraries. And even if you can coordinate the place and time, you must also be compatible in the ability to pay and the extent you may wish to rough it.

Thus, I spread my travel across people, activities, and locations. Comparing to the Bogleheads philosophy, a single travel partner is like a single stock, with variable outcomes, carrying risks as well as returns. By contrast, the people I am with when I travel are like a mutual fund. Not an index fund, but a diversified mutual fund.

Victoria
Thank you! This is great. Your travel plans are inspirational, and I believe mine will probably mimic yours (in my own way), as again getting reliable travel partners is more trouble than its worth. Besides, I'm the independent sort, anyway. Thank you again for a very informative response!

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Re: Credit card: Cash versus Flight Miles

Post by HIinvestor » Sat Feb 25, 2017 12:23 pm

Yes, USAA spells out exactly what is required to get the 2.5% cash back on its credit card and the $1000 monthly direct deposit to a USAA checking account is one of the requirements. I've decided to have that monthly $1000 as an automatic transfer from an another checking account I have with a local bank.

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Re: Credit card: Cash versus Flight Miles

Post by LowER » Sun Feb 26, 2017 12:05 am

Wow! Overwhelming responses. Thanks so much to everyone. Great input. Lots to ponder.

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Re: Credit card: Cash versus Flight Miles

Post by 2stepsbehind » Sun Feb 26, 2017 5:58 am

randomguy wrote:
michaeljc70 wrote:For me, I use the miles. Like others said, it depends. If you are going to use the miles to go from Chicago to Florida or something like that, you are probably wasting them. I recently bought 2 tickets from Chicago to Barcelona for 120k miles with 2 days notice. It would have cost me thousands of dollars to buy those tickets. If you can use the miles on expensive flights when you want to use them, I think you come out better with miles.

I also used 60k to go to Buenos Aires from Chicago last Nov. That ticket would have cost me $1400, so good deal.

Some destinations using miles there is almost nothing available for the lowest mileage rate even if planning in advance. It just all depends.
How much cash back did you give up to get those 60k points at 2%+ cash back? Obviously it depends on exact details (i.e bonus points, sign up bonuses, bonus spending categories). And of course the question needs to be asked is does having your money trapped in points instead of cash encourage spending that you wouldn't do otherwise (would you have bought the ticket for 1400 if you didn't have points?)? To some extent that is the whole purpose of imaginary currencies. You can debate if that is a good or bad thing.
Most people can get at least 50k points for spending $3,000 on a new card so comparing that to a 2% card you are "giving up" $60. Even if you decided to spend $7000 on nonbonus spend on that card to make it to 60k points as opposed to signing up for another card with a sign on bonus, you'd only be giving up another $140 for a total of $200 to get $1400 in value. As others have noted, the big hits come with seeking new bonuses. Most churners have a 2% card for when they aren't working on a new bonus.

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Re: Credit card: Cash versus Flight Miles

Post by Carl53 » Sun Feb 26, 2017 6:10 am

I am curious if one opens multiple cards over time as to whether you can readily combine all of the points from the cards so as to not have to add cash or lose odd points after redeeming the bulk of the bonus points. In other words to you have a points account somewhere that you move them to after earning them so you can close the first card, which might have fees with it, and open another.

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Re: Credit card: Cash versus Flight Miles

Post by 2stepsbehind » Sun Feb 26, 2017 6:23 am

Carl53 wrote:I am curious if one opens multiple cards over time as to whether you can readily combine all of the points from the cards so as to not have to add cash or lose odd points after redeeming the bulk of the bonus points. In other words to you have a points account somewhere that you move them to after earning them so you can close the first card, which might have fees with it, and open another.
Depends on the programs in which you choose to collect points. For something like the chase ultimate rewards it is pretty easy to maintain a flexible set of points to be moved around/combined. Airline specific card balances will generally go to your frequent flier program and it may not be possible to combine smaller balances across programs except through points.com where you will get sub-optimal rates.

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Re: Credit card: Cash versus Flight Miles

Post by VictoriaF » Sun Feb 26, 2017 2:52 pm

2015 wrote:Thank you! This is great. Your travel plans are inspirational, and I believe mine will probably mimic yours (in my own way), as again getting reliable travel partners is more trouble than its worth. Besides, I'm the independent sort, anyway. Thank you again for a very informative response!
Best wishes for your travels, 2015! Please tell us about your plans and accomplishments as they happen. Stories of good retirement are inspirational for other Bogleheads and balance out popular articles about early retirees dying like flies.

Victoria
WINNER of the 2015 Boglehead Contest. | Every joke has a bit of a joke. ... The rest is the truth. (Marat F)

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Re: Credit card: Cash versus Flight Miles

Post by randomguy » Sun Feb 26, 2017 3:13 pm

2stepsbehind wrote:
randomguy wrote:
michaeljc70 wrote:For me, I use the miles. Like others said, it depends. If you are going to use the miles to go from Chicago to Florida or something like that, you are probably wasting them. I recently bought 2 tickets from Chicago to Barcelona for 120k miles with 2 days notice. It would have cost me thousands of dollars to buy those tickets. If you can use the miles on expensive flights when you want to use them, I think you come out better with miles.

I also used 60k to go to Buenos Aires from Chicago last Nov. That ticket would have cost me $1400, so good deal.

Some destinations using miles there is almost nothing available for the lowest mileage rate even if planning in advance. It just all depends.
How much cash back did you give up to get those 60k points at 2%+ cash back? Obviously it depends on exact details (i.e bonus points, sign up bonuses, bonus spending categories). And of course the question needs to be asked is does having your money trapped in points instead of cash encourage spending that you wouldn't do otherwise (would you have bought the ticket for 1400 if you didn't have points?)? To some extent that is the whole purpose of imaginary currencies. You can debate if that is a good or bad thing.
Most people can get at least 50k points for spending $3,000 on a new card so comparing that to a 2% card you are "giving up" $60. Even if you decided to spend $7000 on nonbonus spend on that card to make it to 60k points as opposed to signing up for another card with a sign on bonus, you'd only be giving up another $140 for a total of $200 to get $1400 in value. As others have noted, the big hits come with seeking new bonuses. Most churners have a 2% card for when they aren't working on a new bonus.
Sure but in that case a fair comparison is the 900+ dollars (150 for 500 of spend is pretty standard from my junk mail. There are bigger ones. Amex offered something like 1500 for 5k of spending a while back. I would have to look up if they waived the crazy fee or not for the first year) you would get from sign up offers from cash cards versus the value of the mileage.


The general point I am making is that credit card miles aren't free. By picking them you are giving up something. You are not getting a 1200 dollar flight for free. You gave up x amount of money to get those miles. It might be a win or a loss. You would need to run the math on that. Flight values are all over the chart (My 50k points could buy a 250 dollar ticket to orlando or a 450 dollar flight to san francisco) so you have to calculate your value for the miles AND you have to figure out if you are going to end up with wasted miles (i.e. If you have 53k miles, those last 3 might not get as much value as the first 50k).

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Re: Credit card: Cash versus Flight Miles

Post by 2stepsbehind » Sun Feb 26, 2017 6:04 pm

randomguy wrote:
2stepsbehind wrote:
randomguy wrote:
michaeljc70 wrote:For me, I use the miles. Like others said, it depends. If you are going to use the miles to go from Chicago to Florida or something like that, you are probably wasting them. I recently bought 2 tickets from Chicago to Barcelona for 120k miles with 2 days notice. It would have cost me thousands of dollars to buy those tickets. If you can use the miles on expensive flights when you want to use them, I think you come out better with miles.

I also used 60k to go to Buenos Aires from Chicago last Nov. That ticket would have cost me $1400, so good deal.

Some destinations using miles there is almost nothing available for the lowest mileage rate even if planning in advance. It just all depends.
How much cash back did you give up to get those 60k points at 2%+ cash back? Obviously it depends on exact details (i.e bonus points, sign up bonuses, bonus spending categories). And of course the question needs to be asked is does having your money trapped in points instead of cash encourage spending that you wouldn't do otherwise (would you have bought the ticket for 1400 if you didn't have points?)? To some extent that is the whole purpose of imaginary currencies. You can debate if that is a good or bad thing.
Most people can get at least 50k points for spending $3,000 on a new card so comparing that to a 2% card you are "giving up" $60. Even if you decided to spend $7000 on nonbonus spend on that card to make it to 60k points as opposed to signing up for another card with a sign on bonus, you'd only be giving up another $140 for a total of $200 to get $1400 in value. As others have noted, the big hits come with seeking new bonuses. Most churners have a 2% card for when they aren't working on a new bonus.
Sure but in that case a fair comparison is the 900+ dollars (150 for 500 of spend is pretty standard from my junk mail. There are bigger ones. Amex offered something like 1500 for 5k of spending a while back. I would have to look up if they waived the crazy fee or not for the first year) you would get from sign up offers from cash cards versus the value of the mileage.


The general point I am making is that credit card miles aren't free. By picking them you are giving up something. You are not getting a 1200 dollar flight for free. You gave up x amount of money to get those miles. It might be a win or a loss. You would need to run the math on that. Flight values are all over the chart (My 50k points could buy a 250 dollar ticket to orlando or a 450 dollar flight to san francisco) so you have to calculate your value for the miles AND you have to figure out if you are going to end up with wasted miles (i.e. If you have 53k miles, those last 3 might not get as much value as the first 50k).
They did not. Most of the high cash back offers are offers that sound in miles/points. Aside from the capital one cards, I don't believe there are any 2% cards that offer significant cash bonuses so make sure you are comparing apples to apples in your own comparisons. I don't think anyone ever said that credit card miles are free so no need to destroy that strawman. People who travel have said that miles greatly reduce their out of pocket expenditures and give them better value than they'd achieve with a pure cash back strategy. If that doesn't apply to you, fine. You do have to put more work into maximizing your points or at very least avoiding suboptimal redemptions such as both the orlando and San Francisco redemptions alluded to earlier.

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Re: Credit card: Cash versus Flight Miles

Post by michaeljc70 » Sun Feb 26, 2017 10:06 pm

2stepsbehind wrote:
randomguy wrote:
2stepsbehind wrote:
randomguy wrote:
michaeljc70 wrote:For me, I use the miles. Like others said, it depends. If you are going to use the miles to go from Chicago to Florida or something like that, you are probably wasting them. I recently bought 2 tickets from Chicago to Barcelona for 120k miles with 2 days notice. It would have cost me thousands of dollars to buy those tickets. If you can use the miles on expensive flights when you want to use them, I think you come out better with miles.

I also used 60k to go to Buenos Aires from Chicago last Nov. That ticket would have cost me $1400, so good deal.

Some destinations using miles there is almost nothing available for the lowest mileage rate even if planning in advance. It just all depends.
How much cash back did you give up to get those 60k points at 2%+ cash back? Obviously it depends on exact details (i.e bonus points, sign up bonuses, bonus spending categories). And of course the question needs to be asked is does having your money trapped in points instead of cash encourage spending that you wouldn't do otherwise (would you have bought the ticket for 1400 if you didn't have points?)? To some extent that is the whole purpose of imaginary currencies. You can debate if that is a good or bad thing.
Most people can get at least 50k points for spending $3,000 on a new card so comparing that to a 2% card you are "giving up" $60. Even if you decided to spend $7000 on nonbonus spend on that card to make it to 60k points as opposed to signing up for another card with a sign on bonus, you'd only be giving up another $140 for a total of $200 to get $1400 in value. As others have noted, the big hits come with seeking new bonuses. Most churners have a 2% card for when they aren't working on a new bonus.
Sure but in that case a fair comparison is the 900+ dollars (150 for 500 of spend is pretty standard from my junk mail. There are bigger ones. Amex offered something like 1500 for 5k of spending a while back. I would have to look up if they waived the crazy fee or not for the first year) you would get from sign up offers from cash cards versus the value of the mileage.


The general point I am making is that credit card miles aren't free. By picking them you are giving up something. You are not getting a 1200 dollar flight for free. You gave up x amount of money to get those miles. It might be a win or a loss. You would need to run the math on that. Flight values are all over the chart (My 50k points could buy a 250 dollar ticket to orlando or a 450 dollar flight to san francisco) so you have to calculate your value for the miles AND you have to figure out if you are going to end up with wasted miles (i.e. If you have 53k miles, those last 3 might not get as much value as the first 50k).
They did not. Most of the high cash back offers are offers that sound in miles/points. Aside from the capital one cards, I don't believe there are any 2% cards that offer significant cash bonuses so make sure you are comparing apples to apples in your own comparisons. I don't think anyone ever said that credit card miles are free so no need to destroy that strawman. People who travel have said that miles greatly reduce their out of pocket expenditures and give them better value than they'd achieve with a pure cash back strategy. If that doesn't apply to you, fine. You do have to put more work into maximizing your points or at very least avoiding suboptimal redemptions such as both the orlando and San Francisco redemptions alluded to earlier.
Well, almost nothing is entirely free.

Do you compare to using another credit card or paying cash?

Maybe you take a hit to your credit (opening and closing accounts), there are opportunity costs to your time, spending, etc.

The bottom line is is it worth it? To me it is.

HIinvestor
Posts: 1614
Joined: Tue Apr 08, 2014 3:23 am

Re: Credit card: Cash versus Flight Miles

Post by HIinvestor » Sun Feb 26, 2017 10:54 pm

Yes, I did get a Spark Business card that gave me $500 cash after minimum spend plus 2% cash back on ALL purchases. It has a $59 annual fee.

2stepsbehind
Posts: 889
Joined: Wed Jun 20, 2007 10:03 am

Re: Credit card: Cash versus Flight Miles

Post by 2stepsbehind » Mon Feb 27, 2017 5:48 am

HIinvestor wrote:Yes, I did get a Spark Business card that gave me $500 cash after minimum spend plus 2% cash back on ALL purchases. It has a $59 annual fee.
I got that card as well as the "miles" flavor. Nothing stops a savvy consumer from pursuing both cash and mile opportunities.

2015
Posts: 1827
Joined: Mon Feb 10, 2014 2:32 pm

Re: Credit card: Cash versus Flight Miles

Post by 2015 » Mon Feb 27, 2017 4:21 pm

VictoriaF wrote:
2015 wrote:Thank you! This is great. Your travel plans are inspirational, and I believe mine will probably mimic yours (in my own way), as again getting reliable travel partners is more trouble than its worth. Besides, I'm the independent sort, anyway. Thank you again for a very informative response!
Best wishes for your travels, 2015! Please tell us about your plans and accomplishments as they happen. Stories of good retirement are inspirational for other Bogleheads and balance out popular articles about early retirees dying like flies.

Victoria
Early retirement (well, almost early, at age 60), has been nothing short of life-changing, in the most outstanding, fulfilling way. In May this month I'll be taking the Coast Starliner from Los Angeles to Portland, which is something I've wanted to do for 20 years. Later this year, I'll be spending what will probably the last time with my my mom (due to her declining health) in a quint hotel on the beach we discovered south of San Francisco back in the 90's. Next year, Australian Great Barrier Reef, another dream I've had for decades.

I'm only getting started with the effective use of flight miles and am inspired by those that have got the hang of it after doing it for only a year. I greatly appreciate everyone's contributions as optimizing flight miles/sign up bonuses is another way to maximize retirement travel. I can also see how using flight miles can maximize varied travel like your is and like I plan mine to be.

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