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Updated on October 14, 2020 By Jackie Sills-Dellegrazie 18 Comments
This post contains affiliate links which earn a small commission at no extra cost to you. Please read my Disclosure and Privacy pages for more info. Additionally, The Globetrotting Teacher has partnered with CardRatings for our coverage of credit card products. The Globetrotting Teacher and CardRatings may receive a commission from card issuers.

Cash Back Travel Rewards

Is It Better to Get Cash Back or Miles for travel?

Disclosure: This post contains affiliate links that earn a small commission at no extra cost to you. The Globetrotting Teacher has also partnered with CardRatings for our coverage of credit card products. The Globetrotting Teacher and CardRatings may receive a commission from card issuers. Please read my Disclosure to learn more.

Updated on October 14, 2020

Is it better to get cash back or miles? Why not just get a cash back credit card?

These are fair questions. And, ones that come up often, especially from award travel beginners or anyone feeling frustrated by complicated airline award charts.

For those of you looking for the quick answer, cash back travel rewards are part of a well-rounded miles and points strategy. They can be used for solid value for certain travel expenses, but then not be the best value for others.

Let’s go a bit deeper to fully understand the answer. In this guide, we’ll discuss:
  • the difference between cash back points and other travel rewards points,
  • the best ways to use cash back rewards for travel,
  • how to know if cash back rewards are right for your travel goals, and
  • the top cash back cards.

Is it better to get cash back or miles for travel

Cash Back vs Miles vs Points

There are 3 different types of travel rewards points. Each has its respective value.

Cash back points have a fixed redemption value of 1 cent each. In this way, they’re super easy to understand. If you have 10k cash back points, then you can redeem $100 in rewards. No award charts or airline rules to learn or fuss with.

Cash Back Travel Rewards

Transferable points are those earned through bank credit cards like the Chase Sapphire Reserve or the Citi ThankYou Premier. These points are considered high-value points because they can be flexibly transferred to a variety of airline and hotel partners.

Even better, if an airline or hotel make negative changes to their award program, your transferable points are (somewhat) protected from the devaluation.

Branded miles and points are specific to a particular airline or hotel, like IHG hotel points or United miles. These miles and points are earned from co-branded credit cards like the United Explorer card, from paid travel, or by taking advantage of loyalty program perks and promotions.

Airlines and hotels can devalue their award charts at any time, though, making these points more vulnerable than transferable points. For the best possible value, use your branded points sooner rather than later.

How to Use Cash Back Rewards for Travel

Cash Back Travel Rewards

Which is better, cash back or miles?

Consider this. Let’s say you want to fly from a Texas city like Dallas, Austin or Houston to Rome in economy class. According to Google Flights, prices range between $700-$1,300 on average for a round trip flight. You’d need between 70k-130k points if you used cash back rewards to pay for this flight.

In comparison, a round trip flight on United or one of its partners would cost around 60k United miles or Chase Ultimate Rewards points. This example doesn’t even include the free stopover in a second city which is within United’s award rules.

American Airlines would be about the same 60k miles (no stopover) unless you traveled during an off-peak time. In which case, an award flight would be just 45k miles.

This difference between cash back points and transferable or branded miles and points is even bigger if you like to fly in premium classes or stay at luxury hotels.

Stock Hotel Room

Yet, cash back points can still be valuable for saving money on your travel plans.

Generally speaking, cash back points are best used for expenses that can’t be covered by loyalty program miles and points. These expenses include:

  • car rentals
  • train tickets
  • non-loyalty program hotels (B&Bs, boutique hotels)
  • vacation rentals (Airbnb, HomeAway)
  • tours
  • cruises
  • timeshare fees
  • activities and excursions (museums, theme parks)
  • airline and hotel fees (bag fee, room service)
  • transportation (airport transfers)
  • online booking sites (Booking.com, Expedia)

Cash Back Travel Rewards

Cash back points are also good for paying for amazing deals, like super discounted flights or hotel nights.

Take the example flight to Rome discussed above. If you found a discounted round trip economy fare for $400, cash back points would serve you better. Why use 60k credit card points or airline miles when you can get the flight for 40k cash back points?

Are Cash Back Rewards Right for my Travel Goals?

Cash Back Travel Rewards

Cash back rewards are great as part of an overall travel strategy. However, depending on your specific goals for your upcoming trips, you may need to rely more on your cash back points.
  • Are you planning a National Parks road trip? Cash back rewards can help with your car rental and gas costs, as well as campsite fees or lodging expenses.
  • Have you decided to plan a big family ski trip? Use your cash back rewards to help pay for a ski house and lift tickets.

Cash Back Travel Rewards

  • Will you be sightseeing in New York City? Your cash back rewards are perfect for tours and Broadway tickets.
  • Do you hope to take a cruise? Perhaps your cash back points can help you afford a better room class on board.
Cash back travel rewards might also be useful if you’re someone who:
  • has no interest in figuring out airline and hotel award charts,
  • consistently flies in large family groups and needs many award seats,
  • typically only flies domestically in economy class, and/or
  • can’t or doesn’t want to be flexible with travel dates, airports, etc.

What are the Best Credit Cards for Cash Back Rewards?

Cash Back Travel Rewards

The cash back credit cards below are by no means intended to be an exhaustive list. Instead, I’ve focused on cards that I use and/or think offer the best bang for your cash back buck. All the credit cards listed have no annual fee. 

Card

Earn Rate

Pros

Cons

Chase Freedom

1% + 5% rotating quarterly bonus categories

  • $150 sign-up bonus after spending $500 in 3 months
  • Pair with a Sapphire or Ink travel rewards card to merge points and transfer to airline/hotel partners
  • Must remember to activate the quarterly 5% bonus
  • 3% Foreign transaction fee

Chase Freedom Unlimited

1.5% on all purchases all the time, automatically

  • $150 sign-up bonus after spending $500 in 3 months
  • 0% APR for 15 months on purchases and balance transfers
  • Pair with a Sapphire or Ink travel rewards card to merge points and transfer to airline/hotel partners
  • Can do better on the earn rate with the Citi Double Cash if only interested in cash back rewards
  • 3% Foreign transaction fee

Citi Double Cash

1% for every dollar spent + 1% for every dollar paid off = 2% on all purchases

  • Best earn rate for all purchases among cash back cards
  • No sign-up bonus
  • Minimum redemption is $25
  • 3% Foreign transaction fee

Discover It – Cashback Match

1% + 5% rotating quarterly bonus categories

  • Cashback Match for every dollar earned at the end of the first year, i.e. $200 earned = $400 1st year Cashback Match
  • Must remember to activate the quarterly 5% bonus
  • Not accepted everywhere
Cash back rewards should have a place in every award traveler’s portfolio of benefits. Depending on your travel goals and style, cash back rewards may be better suited to your needs.
 
For travelers looking to maximize the value of their spending and earning, though, cash back rewards are the perfect supplement to traditional credit card and loyalty program miles and points.
 
Do you earn cash back rewards for travel? How do they fit into your miles and points strategy?
 
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Filed Under: Miles and Points Tagged With: credit card, miles, points, travel hacking

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Reader Interactions

Comments

  1. Theresa says

    August 26, 2017 at 2:33 pm

    This was really informative, thank you. I have debated which card might be best for me and not really considered a cash back card.

    Reply
    • Jackie Sills-Dellegrazie says

      August 28, 2017 at 8:25 am

      I still recommend an all around transferable points earning card like the Chase Sapphire, Theresa. But, cash back rewards are helpful for some things.

  2. Travel with Mei and Kerstin says

    August 26, 2017 at 2:39 pm

    What an interesting post! Now we have a better insight in when to use cash back or miles when booking flights and hotels! 🙂 Thank you so much for sharing this!

    Reply
    • Jackie Sills-Dellegrazie says

      August 28, 2017 at 8:23 am

      Glad the info was useful, Mei. Thanks for your comment.

  3. Debbzie Leksono says

    August 27, 2017 at 10:38 am

    Until now I have only used my cash back point for shopping or on a online booking site like Agoda. Perhaps it’s time to step higher and try to redeem my points for flight tickets and else. Thanks for sharing this useful article 🙂

    Reply
    • Jackie Sills-Dellegrazie says

      August 28, 2017 at 8:23 am

      You’ll definitely get more value from your money, Debbzie, especially for hotel bookings. 🙂

  4. Debra Schroeder says

    August 27, 2017 at 7:33 pm

    I prefer miles to cash back because I prefer flying in First Class and Business Class. Cash back rewards do serve their purpose, mostly for making money (large scale MS).

    Reply
    • Jackie Sills-Dellegrazie says

      August 28, 2017 at 8:22 am

      Thanks for your comment, Debra. I agree with you. I focus much more on miles, but cash back has come in handy for specific travel expenses.

  5. Elena says

    August 29, 2017 at 12:04 am

    Very informative post. I can imagine that it could be invaluable not only for the beginner but even for a more experienced traveler since travel rewards programs could be confusing and/or have small print attached ;). I want to add one more thing: there are differences in how any program applies domestically (i.e., inside the US) vs. internationally especially in lesser popular destinations. Hence, it’s always a good idea to check exclusions and restrictions every time going anywhere abroad.

    Reply
    • Jackie Sills-Dellegrazie says

      August 29, 2017 at 9:45 am

      Thanks for your comment and the tip, Elena. Very helpful.

  6. Paige W says

    August 29, 2017 at 9:06 pm

    This post is really informative! I wish that it was just an easy, quick way to know all of this. However, we’re all lucky that you’ve done all of this research for us! I have the Bank of America Travel credit card that gives me 1.5 points back which I can use on anything travel related – metro stations, rentals, hotels, flights, etc. I like it because it’s so much easier for me to understand.

    Reply
    • Jackie Sills-Dellegrazie says

      August 30, 2017 at 8:58 am

      Thanks for your comment, Paige. Simplicity is one of the draws of cash back rewards.

  7. Nancy says

    August 30, 2017 at 12:35 am

    I love to use miles for First or Business Class seats. Thanks for the tips re: the best credit cards.

    Reply
    • Jackie Sills-Dellegrazie says

      August 30, 2017 at 8:57 am

      Miles are the best for premium airline travel, Nancy. Well-done!

  8. Jenna says

    August 30, 2017 at 1:50 am

    Thanks for the great breakdown of the two options! We always prefer using miles, but you are right sometimes cash can help reduce travel costs especially for things you can’t usually use miles for. We have one card through our bank account that’s cash back and it’s been nice to have for the random little expenses here and there!

    Reply
    • Jackie Sills-Dellegrazie says

      August 30, 2017 at 8:56 am

      Agreed, Jenna! Miles are my go-to but the cash back is nice for saving on some travel expenses.

  9. Claire says

    August 31, 2017 at 12:28 am

    I’m always terrible at loyalty schemes – I’m always looking for the cheapest deal at the time so forget about long term savings! Its great to get some tips from a pro 🙂

    Reply
    • Jackie Sills-Dellegrazie says

      September 15, 2017 at 11:12 am

      I hope you can put some them to use in your favor, Claire! Thanks so much for reading. 🙂

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