# Credit Cards:  Frequent Flyer vs Cash Return



## Kauai Kid (Sep 2, 2011)

Have any of you mathematical types ever analyzed which is better to use; a frequent flyer card or a cash rebate card?

I've carried an AA frequent flyer card for years and was shocked the first time I had enough miles for a RT to Hawaii that AA only had limited # of seats.  So it is a crap shoot.  Sometimes you get them sometime you don't.

I just got a no fee VISA Platinum that returns 5% on gas purchased at the pump  and 1% on everything else (2% on restaurant meals Jul-Aug)


Pros and cons Please:  We can't get to Hawaii enough.

Sterling


----------



## Conan (Sep 2, 2011)

I think the math on AA depends on what kind of ticket you're shopping for.  If it's a $600 ticket for 30,000 miles that's the same as 2% cash back.  I get 2% cash on the Capital One Venture card (redemption takes a bit of work, you need to apply the CapOne points to "previously purchased travel" things like car rentals and, sometimes, maintenance fee payments).

I was using CapOne for everything (except in the quarterly-changing Chase Freedom 5% categories).  I've now gone back to AA because I'm saving up for Europe tickets which are more expensive.  Also there's an offer on AA cards that temporarily gives 1.5 miles per dollar (call the phone number on the back of the card for info).

AA has good availability if you book the full 10 months ahead--perfect for TUG types.


----------



## PigsDad (Sep 2, 2011)

Personally, I have found the Hilton HHonors Amex to be the best card for us.  If you plan on traveling and staying in locations where hotel rooms are expensive (New York, Europe, etc.), you can really get some good value out of the card.  A bonus for us is since we own HGVC, when we pay our MFs, we get 3X the normal points for that charge.  Plus it is easy to get Gold (or even Diamond) HHonors status by using the card.

For our trip to Italy 2 years ago, I figured I was getting a value of about 3-4% rebate based on the value of the hotel rooms we stayed in (online rate, not inflated rack rate).  With airline cards, we usually only got between 1-2%, I figured.

Kurt


----------



## Liz Wolf-Spada (Sep 2, 2011)

I like my Starwood Amex, we don't own Starwood, I got it years ago when attending conferences at Sheraton hotels.  It is only 1 pt per dollar, but when you open an account at an airlines and transfer 20,000 miles they add 5,000 miles. They also have an option where they can send the miles immediately. I needed a trip to Oakland and got one on Jet Blue for 15,000 points round trip.
Liz


----------



## Numismatist (Sep 2, 2011)

I prefer Fidelity Visa, I get 1.5% back on everything, but if I go to a restaurant I use the Marriott Visa to get the 2X points.

I'd rather take a little less cash and buy a ticket for sure, then try to use miles to hopefully get a ticket.


----------



## pointsjunkie (Sep 2, 2011)

we were the discover cash back people until i switched to starwood amex and an airline card. we went to italy 2 first class tickets for $90 and all hotels were free. i calculated the price for the trip would have been over $11,000 if we paid cash. AND if i used the discover cash back to pay for the the trip i would have had to charge over $300,000. which i most definitely did not even come close to $100,000.

i now teach classes on this subject in my community.

good luck.


----------



## Judy (Sep 2, 2011)

It depends upon the airline's frequent flier seat availability policy on the routes you want to fly.  

I had a Delta Amex until Delta "improved" their frequent flier program and began charging outrageous numbers of miles for award seats to most of the places I'd like to fly. 

My Capital One card doesn't charge foreign transaction fees and it gives me cash back.  So I think that's a good deal. 

I've been happy with my AAdvantage Citi Card because AA had been very good about supplying award seats to Bonaire for 25,000 miles during the season we wanted to travel.  They no longer have convenient flights to Bonaire from Florida, so I'll have to rethink this card.

In my experience, United has been the best bet for frequent flier award seats, both domestic and internationally.  So their Mileage Plus Visa was a good value.  But it's anybody's guess what's going to happen as the merger with Continental progresses.

I can't tell you specifically about Hawaii.  Just go to aa.com and do some award flight searches and see what comes up.  Then see what you would have had to pay for those same flights.  Next, figure how much you would have had to spend on your "cash back" card to earn enough money to purchase the flight.  

Bottom lines:

Will you save your "cash back" and put it into a travel fund, or will it just disappear?

Does American have good enough MileageSAAver award seat availability to Hawaii?


----------



## travelguy (Sep 2, 2011)

Great question and one that I've analyzed.

FWIW - We use the Starwood Amex because of the bonus 25% when transferring to an airline FF account and the ability to move miles into all major airline FF programs.

As to the question of FF tickets or cash-back - We use our FF miles for only FC seats that we can get for the lowest mile cost.  This requires planning ahead but we have always gotten what we want with the ability to tap into all the airline FF programs.  We do NOT use FF miles for short hop (< $300) tix as this is not a good use of miles.  

We get FC tix because the cost of additional FF miles from economy to FC is paid for by N/C luggage costs (my wife would travel with 4 steamer trunks if she could  ).  The additional benefit of sitting in FC is icing.

Our average FF FC tix is well over $1000 w/ no luggage costs (additional savings of $120/ea RT).  IMO, this is a great use of 50K FF miles.

Recently, we have not even been able to use the "incentive" miles given to us by the CC companies just by having a good credit score!


----------



## presley (Sep 2, 2011)

I am always asking myself the same questions.

A few months ago, I got the AmEX Delta card, thinking I would be able to rack up some miles.  Well, turns out that I only want direct flights and Delta doesn't seem to have those.  I just ordered $100. American Express gift cards from them, in an effort to cash out my miles.  It is giving me $300, which is probably more than what I would get for airline tickets.

I also recently got a Chase cash rewards card.  Since they wanted my bank account info, because they will only do cash rebate via direct deposit, I decided to cash in for Shell gas cards instead.  I have to say that I love the gas cards.

I think until I find a great airline CC that actually has flights that I want to take anyway, I will just use my rewards for cash/gift cards.


----------



## x3 skier (Sep 2, 2011)

*Three for Me*

I use three basic cards.

1) AA Citi card I use primarily to keep my AAdvantage account alive.

2) Gold AMEX Membership Rewards Card for most charges so I can transfer miles to FF programs with sometimes a 50%+ bonus. It is getting more restrictive in airlines for transfer but since it has a selection of major carriers, including DL and BA (for use on AA or other One World carriers), I will keep it until later upgrade to Platinum. I can also access Star Alliance in a similar way via Useless Air. 

3) A Cap One cash back card for use in Europe or other out of the US charges since they do not charge the Junk Fees for foreign transactions.

When my Sky Club with DL and Admirals Club with AA memberships expire later this year, I plan on a AMEX Platinum card which grants me access to both for about the same fee I am paying now for one. It also has the membership rewards like my current Gold AMEX.

BTW, I never cash in FF Miles except for low miles awards to Europe in Biz Class each year which I have been very successful in getting on both DL or AA or their partners.

Cheers


----------



## Pat H (Sep 2, 2011)

I have been basically using the SPG AMEX & AA MC. I recently took advantage of the 75K bonuses for AA Citi Visa & AMEX and 50K bonus for Chase UA Visa. In the past year I have used FF miles to Puerto Vallarta (coach) & Spain (business) and SPG points for 3 nights at the Westin Madrid. For 2013 I have FF tickets to Australia/NZ (first) and Grand Cayman (coach) and hotels in Sydney & Auckland with the SPG points. Since I am getting 1.5 miles until 11/30 on the AA MC, I am only using that for now. Cash back means nothing to me. If I added up the cost of the free tickets & hotel rooms above it would be well over $15,000.


----------



## elaine (Sep 2, 2011)

we use AA FF CC and redeem for high value tickets and I have been very happy--I might have limited choices and have to juggle my airport (just flew back from Milan vs. Rome, last year, flew into Zurich vs. Italy--then took the train for 3.5 hrs and $25pp ticket on Eurostar)--but I got 6 tickets @ 60K miles each RT. The lowest price when a searched a few times was $1200-1500. I never use the miles for domestic 48 tickets. 
So, I guess that is about 2-3% cash back--but I like being able to change my dates on the fly without penalty with FF ticket, and I can redeposit the miles for a $150 +$25 each other ticket fee if my plans change--so there is a bit of intangible, as well.


----------



## mtwingcpa (Sep 3, 2011)

I used to have an AlaskaAir Visa card. One of its main benefits was an annual "companion" ticket at a bargain price. But since I usually travel alone, this didn't do me any good. 

I now stick to "cash back" cards, but I don't claim to have done a precise analysis of the situation.


----------



## klpca (Sep 3, 2011)

pointsjunkie said:


> we were the discover cash back people until i switched to starwood amex and an airline card. we went to italy 2 first class tickets for $90 and all hotels were free. i calculated the price for the trip would have been over $11,000 if we paid cash. AND if i used the discover cash back to pay for the the trip i would have had to charge over $300,000. which i most definitely did not even come close to $100,000.
> 
> i now teach classes on this subject in my community.
> 
> good luck.



Did you achieve this with the signup bonuses or regular spending?

And what card would you recommend for regular spending for a non-frequent flyer?

We have had good luck with signup bonuses taking us places but I'm trying to figure out the best card for regular spending. We travel to Hawaii every other year (sometimes more) and Europe every 3 or 5 years. I'm fine traveling in coach. Currently we use Costco Amex (primary) and Discovercard (only for the 5% promotions), but we also have a Hawaiian Visa, Alaska Airlines, and Marriott Rewards. We netted about $1,100 on the primary card last year (Costco) and about $400 on the discovercard. All of our award travel has come through signup bonuses and miles earned by paying college tuition on the card. 

The only reason that we have a Hawaiian Airlines account is that they offer one way tickets for 17,500 miles and allow transfers between ff accounts (great if you have kids because you can consolidate their miles into your account).

Any suggestions?


----------



## SuzanneSLO (Sep 3, 2011)

klmcpa said:


> [snip]I'm fine traveling in coach. [snip]
> Any suggestions?



Generally, it is hard to get better than a 2% return when using FF miles to book coach tickets. Unless your experience is different than this, you are probable better off getting one of the cash back cards recommended on this thread and enjoy the flexibility of paying cash for your tickets. -- Suzanne


----------



## am1 (Sep 3, 2011)

I have a capital one card.  Along with the no foreign transaction fees it offers 3% back on travel purchases.  The miles have to be redeemed for travel purchases.  A double edge sword for me but a nice gifts for others.  

A discover card with 2% cashback.


----------



## MichaelColey (Sep 3, 2011)

My favorite is (and has been for the past 5 years or so) the Starwood AmEx.  When I use the points for hotel rooms (pretty rare), I generally get the equivalent value from the points as if I had received a 2% cash rebate.  Plus, spending $30k/year gets me Gold status (which doesn't mean much in the US but is good overseas).  When I transfer points to AA miles (20k gets 25k miles), I generally get the equalivalent value as if I had received a 2-3% cash rebate.  We generally only redeem miles for FC to Hawaii or Europe.  We're saving up AA miles for a RTW trip, which will return even greater value (150k miles lets you fly up to 16 segments and 25k miles in Business class, within a bunch of rules - equivalent to about a $10k ticket if purchased with cash).

Over the next year, I'll probably be shifting all of my spending to an AA Citicard, though.  They're changing their Million Mile program, and those miles (through 12/2012 anyway) will be the only non-flying miles to count.  I already have lifetime Gold status with AA, but I can get most of the way to the 2MM miles required for lifetime Platinum (far more valuable) by shifting to the AA Citicard.  I'll be shifting back to Starwood AmEx after that (unless they extend the 12/2012 deadline).


----------



## kiyotaka (Sep 4, 2011)

Michael, I’m afraid AA LT MM program change starts 12/1/11 not 12/1/12.


----------



## JeffW (Sep 4, 2011)

In terms of FF miles, I think it really comes down to what you end up booking.  As others have mentioned, if you can get Hawaii or international flights, and/or first class, you're almost certainly looking at a 2c-3c per mile/point effective rate.  Assuming the typical cash back rate is 1%, that's a significant improvment. 

But also like others have mentioned, that's not always easy.  Delta particularly, their minimum level is almost 40k/65k for US48 or Hawaii, vs 25k/40k for other airlines.  And it can often be some much work to find award seats, that for most people, getting a guaranteed 1% back, which they can then use to pay for any tickets they wish, it probably a better recommendation for the average person.

The airline credit cards are sort of making a comeback though.  I got a Continental One Pass MC 2 years ago specifically before of it's free baggage policy (think 1 free bag for 4 travellers).  Delta added a similar policy this year, I think they might be up to 8 or 9 travellers).  And United just added it also, though if I read the restrictions correctly, it's only good for 2 passengers, and I think it's for paid tickets bought with their credit card (CO & DL, it's linked to your FF account, so ANY travel on them gets you free baggage).

This may not necessarily change the dynamics of using the card.  It does perhaps at least make the effective annual cost of the card $0 (savings in one trip can often equal the annual fee), having it match the typical $0 annual fee of other cards.

Jeff


----------



## Dollie (Sep 4, 2011)

*Card terms change*

We have both cash back and mileage cards.  We use the mileage card primarily and have had good luck using the miles for flights to Hawai’i and other places.  We fly from Vermont which adds complications and expense to flying anywhere, so free tickets can be a real plus.  We are also retired and can be flexible with dates, making it easier to get the frequent flyer tickets.  

The mileage card has a 15 consecutive day rental limitation in the USA for car insurance, the cash back does not.  So on a long trip, we use the cash back card for the car rental.

Something else to keep in mind is the terms for the credit cards are constantly changing within the same credit card (ie the Chase United card we currently have is no longer available, one with different terms is).  Our original mileage card had a free companion ticket options (no longer available) but this really didn’t work out so we switched to a lower yearly fee, more miles card.  Now, the mileage card we currently have is no longer available.  There is a new version that has different features (fewer miles earned but other perks).  Right now I think the one we have which earns more miles, is better, so we’ll stay with it.  However, we will keep tabs on the latest version card to see if a change in the future would gain us anything.


----------



## JeffW (Sep 4, 2011)

Dollie said:


> ... However, we will keep tabs on the latest version card to see if a change in the future would gain us anything.



One thing to keep in mind with any credit card is any special promotions they have.  My Gold AMEX card once had a triple points offer for part of a year.  Combined with when you could savings bonds with a credit card, I racked up a ton of points then.  Discover typically is 1% cash back, but goes up to 5% on different things every month.  And in the past, my United MP cards (from Chase) would at least once a year, offer double miles.

So it's not just a matter of picking a few cards, but watching all the offers they come thru with, and almost daily, figure out which card is best for a given purchase.

Jeff


----------



## x3 skier (Sep 4, 2011)

Not to oversell AMEX, but Delta seems to have a promo every year now where you can transfer Membership rewards miles and get credit toward elite status. This is on the regular AMEX Gold, not Delta AMEX. One time deal and it got me Gold Status last year where I was upgraded about 75% of my flights. Lots of whining on Flyer talk about how it degrades Elite Status, but it worked for me.

I know some will not have anything to do with Sky Miles and think it is worse than the Plague, but if you are a semi captive like me, it helps to get this kind of deal.

Don't know if other airlines offer similar bennies but it might tip the scales if you are on the edge about a Credit Card.

Cheers


----------



## BevL (Sep 4, 2011)

We have limited options here in Canada for frequent flyer cards.  I regularly tout our Alaska Airlines card on the boards here and that's what we use.  Hubby has a Costco Amex but rarely uses it.

I'm not one of those people that does spreadsheets to calculate timeshare purchase costs, etc. etc. etc., and I don't do any sort of analysis re what credit card to use.

We've had no problem getting the flights we want and the gratification of a "free" flight is sort of an emotional perk for me.  Plus I know I'm not going to be putting those little rebate amounts away every time I get them on a cash back card to make sure I have money for at least one way in first class when we want to go somewhere.  To me, our AS FF MC is a way to save for vacation expenses.

JMHO.


----------



## klpca (Sep 4, 2011)

JeffW said:


> The airline credit cards are sort of making a comeback though.  I got a Continental One Pass MC 2 years ago specifically before of it's free baggage policy (think 1 free bag for 4 travellers).  Delta added a similar policy this year, I think they might be up to 8 or 9 travellers).  And United just added it also, though if I read the restrictions correctly, it's only good for 2 passengers, and I think it's for paid tickets bought with their credit card (CO & DL, it's linked to your FF account, so ANY travel on them gets you free baggage).
> 
> This may not necessarily change the dynamics of using the card.  It does perhaps at least make the effective annual cost of the card $0 (savings in one trip can often equal the annual fee), having it match the typical $0 annual fee of other cards.
> 
> Jeff



Yep - I'm good to go with checking bags on my November trip to see my daughter in DC. Thanks for mentioning this. 

Very interesting - I have a United card sitting in the desk drawer - I may need to take another look to see if I have this benefit on this card.

Analyzing credit cards and FF mileage programs is probably the only thing more confusing than figuring out timeshare programs.


----------



## Pat H (Sep 4, 2011)

MichaelColey said:


> Over the next year, I'll probably be shifting all of my spending to an AA Citicard, though.  They're changing their Million Mile program, and those miles (through 12/2012 anyway) will be the only non-flying miles to count.  I already have lifetime Gold status with AA, but I can get most of the way to the 2MM miles required for lifetime Platinum (far more valuable) by shifting to the AA Citicard.  I'll be shifting back to Starwood AmEx after that (unless they extend the 12/2012 deadline).





kiyotaka said:


> Michael, I’m afraid AA LT MM program change starts 12/1/11 not 12/1/12.



It's only the Citi Executive / AAdvantage World Elite MasterCard credit card that continues to accrue LT miles until 12/31/12. It costs $465/yr.


----------



## ondeadlin (Sep 4, 2011)

I've done a fair bit of analysis and card hopping.

I'm currently using the Capital One card for all purchases but gas and groceries.  Capital One gives you a 2 percent cash back yield.  It adds up fast.  I use the Amex Blue Cash for gas and groceries - 5 percent yield after you meet a minimum spend ($6,500, I think - it's 1.5 percent prior to hitting the minimum).

The Marriott card is one of the worst for non-Marriott purchases, but has one of the best yields for Marriott use.  It pays for itself with the free night, so I keep that for use only when I'm staying at Marriott and/or buying Marriott points or gift cards.


----------



## MichaelColey (Sep 4, 2011)

MichaelColey said:


> Over the next year, I'll probably be shifting all of my spending to an AA Citicard, though. They're changing their Million Mile program, and those miles (through 12/2012 anyway) will be the only non-flying miles to count. I already have lifetime Gold status with AA, but I can get most of the way to the 2MM miles required for lifetime Platinum (far more valuable) by shifting to the AA Citicard. I'll be shifting back to Starwood AmEx after that (unless they extend the 12/2012 deadline).





kiyotaka said:


> Michael, I’m afraid AA LT MM program change starts 12/1/11 not 12/1/12.





Pat H said:


> It's only the Citi Executive / AAdvantage World Elite MasterCard credit card that continues to accrue LT miles until 12/31/12. It costs $465/yr.


Exactly.  The current "anything counts towards LT status" ends on 12/1/11, but the Citi Executive card continues through 12/31/12.  I'm still focusing on Starwood for the next couple months, then transferring everything to AA before the 12/1/11 deadline and shifting all my spending to the Citi Executive card.  I'm hoping to get to at least 1.8MM by 12/31/12.  I'd love to get closer to 2MM, but I think that's about all I'll be able to do by 12/31/12.


----------



## pointsjunkie (Sep 8, 2011)

klmcpa said:


> Did you achieve this with the signup bonuses or regular spending?
> 
> And what card would you recommend for regular spending for a non-frequent flyer?
> 
> ...



we had a 40000 CC promotion the rest was from promotions with the rewards network(dining out) and the other account from shopping on the delta mall and the malls promotions. it took a few years but it was well worth it, and now we have enough to do it all again. just booked my son's honeymoon to france with miles and starpoints for the hotels. would have cost $7400 if i spent cash to pay for the trip, but it cost me just the taxes.


----------



## pointsjunkie (Sep 8, 2011)

klmcpa said:


> Did you achieve this with the signup bonuses or regular spending?
> 
> And what card would you recommend for regular spending for a non-frequent flyer?
> 
> ...



does hawaiian or alaska have a mall on their site? start shopping on it. all major stores are on that site or the marriott site probably has one.


----------



## Carolinian (Sep 9, 2011)

As an expat, the junk fees on foreign transactions make lots of cards useless for my needs.  My mainstay is CapOne with no junk fees.  I also keep a couple of no annual fee cards for use when I am in the US, but there are no mile earning cards with no annual fee.

I am loving my new corporate card, a Diners Club branded Mastercard, as it includes free airport lounge access a lot of places.  I have even had lounge access availible in small airports like the Isle of Man and Cluj, Romania. Most importantly, free lounge access is availible at the usual gateways I use on each side of the pond on TATL flights, Newark and Munich, as well as at my NC home airport, RDU.  I don't know what benefits my employer gets back from this card but I am loving the lounge access benefit I get.


----------



## klpca (Sep 12, 2011)

pointsjunkie said:


> does hawaiian or alaska have a mall on their site? start shopping on it. all major stores are on that site or the marriott site probably has one.



I know that Hawaiian has one but I'm not sure about Alaska. I admit, I tend to use the discovercard portal because I can usually get 5% and lately I check overstock.com first. A couple of weeks ago the club O cash back was 15% and you could stack it with some promos as well. It would probably make more sense to concentrate everything on one card even if the yield wasn't as much and then use it on the higher value travel. Thanks for a different perspective. I just wondered what the different strategies were.


----------



## x3 skier (Sep 16, 2011)

*Comparison site*

I just posted a link to compare Credit Cards for miles and points in the forum for those interested. 

http://www.nextadvisor.com/credit_cards/articles/19/best-travel-reward-credit-cards-analysis

Cheers


----------

