Cash back is looking better than ever (On Nick’s mind)


A comment Greg made during our weekly Frequent Miler team meeting last week has had me thinking more about cash back for the past week. We were briefly debating the value in reporting deals like the recent sale on Air France miles when Greg made the point that having a reference for the selling point of miles is important because it shows that sometimes a cash back strategy makes the most sense. That got me to thinking more about the “everywhere else” cards in my wallet and the cost of earning rewards on everyday spend. Greg was of course right that we should report sales like the Air France buying miles sale — if for nothing else to remind me that my “free” awards don’t represent free rewards.

I love the Arabic Mezze on Emirates, but it isn’t as “free” as it tastes.

New welcome bonuses always win out

Best Credit Card Offers

Right off the bat, I want to recognize what Frequent Miler has long advised: the absolute fastest way to amass a meaningful number of miles and points is through new credit card welcome bonuses. There are millions of miles and points available via the Best Credit Card Offers and it isn’t uncommon for a new intro bonus to offer an effective earn rate of 10 points per dollar spent (or even more).

There are no rewards for ongoing spend that can compete on the same level as the effective earn rate while spending for a new welcome bonus. If you’re willing to sign up for a few new credit cards each year (and your spend doesn’t exceed the spending requirements for those bonuses by much), then your best strategy is going after big welcome bonuses and an “everywhere else” spend strategy won’t be a significant concern.

For those who don’t want to continue to open a handful of new cards each year or whose spend activity exceeds their appetite for new cards, cash back (or “cashback” as it is often called by rewards cards) is looking better and better as the alternative to rewards points.

Earning 2.5% cash back everywhere is a benchmark

While the fee-free 2% cash back card (there are many of them on the market) has long been the benchmark comparison point for rewards credit cards, there have been some better (though usually more difficult options).

For instance, we have long written about how Bank of America customers with Platinum Honors could earn a base rate of 2.625% cash back everywhere with the Premium Rewards card and then this year Bank of America introduced the fee-free Unlimited Cash Rewards card, which also offers that same base rate for those with Platinum Honors. However, Platinum Honors is a high hoop since it requires $100K in any combination of cash & investments with Bank of America and Merrill Edge / Merrill Lynch. That’s why my wife and I moved our IRAs to Merrill Edge, but many people either can not or would not want to jump this hoop. That makes 2.625% cash back an irrelevant comparison point for many.

However, the Alliant Cashback Visa has become an accessible 2.5% cash back benchmark. While Alliant has made 4 significant changes to the card in the past 4 years, the most recent set of changes have made it a much more attractive option for an “everywhere else” card and arguably a more relevant comparison point for the wider rewards credit card landscape.

For those who missed the changes this summer, the Alliant card now has no annual fee and offers 2.5% cash back everywhere for “Tier One Rewards” customers. The requirements for Tier One are:

  • Keep a minimum balance of $1,000 in an Alliant checking account
  • Have at least 1 electronic deposit per month (you can easily automate a monthly ACH push and pull of a buck or two from one of your other accounts to meet this requirement).

When you meet those two requirements, here is what you get with Tier One Rewards:

  • Earn 2.5% cash back on up to $10,000 in purchases per billing cycle
  • Earn unlimited 1.5% cash back on all other qualifying purchases

This means that as long as you spend less than $20,000 per billing cycle, the Alliant card comes out ahead of a 2% cash back card. Purists may challenge me on that since you need to keep $1,000 in the checking account at 0.25% interest. Since I have a T-Mobile Money account where that thousand bucks could be earning 1% APY, it will indeed cost me $7.55 per year to keep that money at Alliant. That doesn’t have a huge impact on the break-even point. If you spend less than $10,000 per billing cycle, you’ll earn 2.5% everywhere for whatever your opportunity cost is to keep $1,000 locked up at Alliant (I guess with the current I Bonds rate – 7.1% for the next six months at the time of writing – you may find the opportunity cost higher).

It is worth repeating that 2.5% cash back doesn’t beat spending toward a new welcome bonus — if you are willing to open a few new credit cards per year and spread them out to make sure that all of your spending goes toward a welcome bonus, you could easily earn far more than 2.5%. With a new Discover IT Miles card, you could effectively earn 3% cash back for the first year with no hoops beyond a new account.

However, for those unwilling to open many new cards or whose spend exceeds the requirements for the new cards they open, the Alliant card provides a good benchmark. When the card initially launched a few years ago, approvals were tight — they targeted higher income individuals. I would hope that approvals have become easier as they have changed the card. If they have, then 2.5% would be a good comparison point for a broader range of credit card rewards earners — at least until Alliant changes things up again and changes the earning rate or requirements once more.

Is 2.5% back a better hotel and airline credit card?

What led me to thinking about the Alliant card was our discussion about the Air France buying miles deal. I didn’t find the sale particularly interesting in part because you can transfer to Flying Blue from every major transferable currency. Flying Blue miles can be useful and valuable, but I can easily earn them any day of the week with almost any of the cards in my wallet and I imagine that most readers similarly already have easy access to Air France miles. Why would people buy them?

However, Greg made the point that sales like this one provide a good benchmark for the discussion about earning cash back versus other types of rewards. Since miles are for sale (in that recent Air France deal) from 1.68c per mile, someone using the Alliant card and holding out for sales like this one could look at their card as a “1.5 miles per dollar” card since the 2.5 cents earned for every dollar spent could buy about 1.5 miles at that price.

A card like the Freedom Unlimited has long been valued for earning 1.5 points per dollar spent that can become transferable points when combined with a Sapphire Preferred, Reserve, or Ink Business Preferred.

Imagine for a moment a world where all miles periodically go on sale for the same ~1.68c per mile (they don’t) and that you could always buy in enough quantity to trigger the best discounts (unrealistic, but stick with me): the Alliant card would be a better card than the Freedom Unlimited. The Alliant Cashback Visa card would give you the freedom to choose between 2.5 cents or 1.5 miles — buying miles when you want them and otherwise having earned cash back at a good rate. The problem in that non-existent alternative reality would be that the Alliant card would ruin the “joy of free” since you would be buying miles with your real-world money instead of Chase Ultimate Monopoly Money (or whatever transferable currency you prefer).

Before you dismiss the possibility of buying miles with your cashback as a complete fantasyland, keep in mind that we have seen American Airlines sell miles for as low as 1.7c per mile, which works out to the same nearly 1.5 miles per dollar with the Alliant card if you use your cash back to purchase miles. United has sold miles from about 1.88c per mile, which works out to about 1.33 United miles per dollar spent on Alliant. Avianca LifeMiles puts miles on sale for around 1.32c per mile pretty often — that works out to 1.89 miles per dollar spent on Alliant. If you were able to hoard cash back and wait out mileage sales (while earning interest on your cash back as you wait for that next sale!), you could probably do OK (though you would have to be spending a lot on your Alliant card to earn enough cash back to buy miles at the best rates since the best rates often require buying a couple thousand dollars worth of miles at once).

While none of those rates quite beat the 2 miles per dollar spent that you can effectively earn with the Blue Business Plus (2x on up to $50K in purchases per year, then 1x) or the Capital One Venture card (2x everywhere but with a $95 annual fee) or due-to-launch-today Capital One Venture X card (also 2x everywhere but with benefits that easily justify its $395 fee), the Alliant card comes respectably close and add the flexibility of cash.

The flexibility of cash back has value of its own. You can use cash back to buy anything you want, not only miles or travel. When you do want to use it for travel, you can choose to pay cash when tickets/rooms are cheap rather than accepting unideal value for miles. More importantly, for better or worse, it makes you think about the trade for miles more carefully.

That last point is one that nobody enjoys. Greg has written before about the joy of free and many readers have chimed in with their own takes on that: it’s hard to beat the feeling when you’re sipping champagne in the lap of luxury for “free”.

Nick enjoying the Emirates experience

That’s precisely why I don’t generally get excited about mileage sales. Yeah, I could a sale like that Flying Blue sale to buy enough miles to fly to Europe in business class (55,000) for about $924 (plus taxes on the award). In some cases, that would save a substantial amount over the cash rate. Unfortunately, it would come at the cost of the joy of free since there would be no illusion of freeness. It would be clear to me that I’d spent more than a thousand bucks on the seat when all was said and done whether I used my cash back from the Alliant card or cash from my long-term savings.

Of course, that’s always the case, it’s just that using the monopoly money offered by credit card issuers feels freer. As we have long noted, choosing to use a Blue Business Plus over the Alliant card is essentially paying 1.25c per Membership Rewards point since you give up 2.5 cents in favor of getting 2 Membership Rewards points for every dollar spent. To earn the 55,000 Membership Rewards points one would need in order to transfer to Flying Blue for that same theoretical business class award ticket, one would need to spend $27,500 on the Blue Business Plus card. Alternatively, at 2.5% cash back, you would have earned $687.50 with the Alliant Card. Getting a one-way business class award ticket for $687.50 plus taxes and fees is a very good deal, but it isn’t as “free” as it feels when I transfer 55,000 monopoly money points to 55,000 Flying Blue miles and book (though when there is a transfer bonus, the deal starts to get better yet).

While I don’t enjoy thinking about the points that way, the truth is that a cash back strategy would keep me more honest.

To be clear, I don’t necessarily follow a cash-back-first strategy all the time. I enjoy my funny-money points. I do try to mostly focus on earning transferable currencies in bonus categories worth more than 2 points per dollar spent, but there are definitely times when I choose 2 points over 2.5% (or 2.625% cash back in my household). As we’ve discussed on the podcast a lot of times this year, issuers have made that really easy during the pandemic with various spending offers all the way up to the borderline-insane 15x small business and restaurant spend with the current Amex Platinum offer via Resy. It becomes much easier to justify earning a transferable currency at 4x or 5x or 10x or 15x(!).

But Marriott’s recent announcement that they intend to ditch award charts altogether in 2022 makes a cash back strategy even more potentially appealing. Marriott has indicated that award rates will more closely reflect cash prices starting in 2023. We don’t yet know exactly what that will mean, but we expect that points will have a more fixed value against cash rates. Our educated guess is that they probably won’t be worth more than the rate at which Marriott sells points. While the ordinary price for Marriott points is 1.25c per point, they go on sale periodically for less than 0.9c per point. Greg’s most recent analysis found Marriott points to be worth about 0.63c per point. I guessed last week that the value of Marriott points would likely land somewhere between 0.63c and 0.9c (likely closer to the lower end of the range), but then Greg pointed out in last week’s post roast that Marriott has pegged the value of points for Homes & Villas at 0.6c, so maybe that is a more realistic guess as to where things will land.

If Marriott points become worth 0.6c per point toward room rates in 2023 (and let’s be clear that this is only a guess and that the value probably won’t end up being completely uniform), the Alliant card at 2.5% cash back would approximately earn the purchasing power of 4.17 Marriott points per dollar spent (there is some fudge factor in the math here because award stays usually don’t incur tax but paid stays earn points). I’d be much better off earning cash back than Marriott points (which is already true but will likely become truer).

The same is already true with regard to IHG and Hilton points: those points go on sale for 0.5c so often that the Alliant card truly is the best free agent hotel card since it offers the equivalent of 5x Hilton or IHG points everywhere (since you can take your 2.5 cents back on each dollar and buy 5 points with it). Again, my difficulty here becomes the way it steals my joy of free — suddenly that property that costs 60K Hilton points per night is costing three hundred actual dollars if I buy my Hilton Monopoly Money with Alliant’s cash back. But it makes a lot more sense to earn IHG or Hilton points with cash and then use the cash to buy the points.

I actually find it mentally less painful to buy hotel points with checking and brokerage account bonuses for some strange reason. I don’t know why more loyalty programs haven’t partnered with banks to offer checking account bonuses in rewards points.

The key point here is that earning cash back has become a better deal than earning hotel points almost uniformly and it is a more flexible choice than earning a specific airline currency or even 2 transferable points per dollar spent. It isn’t a better deal than earning points in a good category bonus (I would of course happily take 5 Chase Ultimate Rewards points per dollar spent over 2.5%). But cash back is looking like the best strategy for everywhere else spend.

Bottom line

As I noted above, I don’t always follow the perfect strategy. Just as you may know the best mathematical strategy for Blackjack but veer from it on a “hunch” at the tables in a casino or like you may know that the extra slice of pizza probably isn’t good for you but you gobble it up anyway for the enjoyment factor, I also earn 2x on some purchases when a more logical strategy would be cash back. But reporting on mileage sales and changes in loyalty rewards like Marriott ditching its award chart will keep me honest and hopefully help me make the smarter choice more often. I’ll still take my joy of free when I can get it and I know I will make some irrational point-earning decisions now and then, but keeping the declining value of hotel points and frequency of mileage sales in mind is starting to solidify cash’s spot on the throne of loyalty rewards.

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[…] Is Cash Back A Good Option?:  Everyone’s goals are different with points and miles, so there is no one size fits all answer to this question.  However, it’s good to check out the case for cash back as it could definitely benefit you. […]


Taxable income from the cash rewards is issued by all banks that I have seen anx is a hefty percentage – so should be factored in.


I stand corrected Nick! I got 1099s for a bunch for bank bonuses before and assumed that credit card companies did the same with cashback (I read somewhere that the IRS was considering assigning a value of 0.6 c/M to SUBs but wasn’t sure if that will ever happen… Thanks as always for your posts – they’re always great to read

Last edited 1 year ago by spud

For me it is kind of a step function–I want enough currencies in either airline or transferable miles to get the flights I want…but I can only take so many trips in a year. As long as I have topped up amounts for that purpose, cash is king.


Annual fees are not bad if you get more value than the fee is worth. Many cards have lower fees than you think because some of the benefits can be taken close to face value. The advantage of this return is that it’s cashback. When you compare it to Freedom Unlimited for example, even when combined with Sapphire or Reserve, that bonus is not a bonus for cashback. It’s for either travel rewards or pay yourself back.


“Annual fees are not bad if you get more value than the fee is worth.”

You also have to factor in the possible total return from a comparable no-AF card; just earning more rewards than the fee is not enough.

In other words:

AF Card: Earn (and/or Perks and/or Potential) – AF

Must be greater than:

No-AF Card: Earn (and/or Perks and/or Potential)

(You might also need to include Expected Breakage in the mix.)

Last edited 1 year ago by anonymous

“You also have to factor in the possible total return from a comparable no-AF card”

And I should include: “…a comparable no-AF card OR a cheaper AF card.”

Just for completeness. 🙂


For those who grew up reading Archie comics or watching Riverdale …. Cashback reminds me of Betty – trustworthy, reliable, predictable. Points remind me of Veronica – flashy, temperamental, high maintenance. You know Archie should pick Betty but he always wants Veronica instead.


That’s awesome

Larry K

This is a great post, Nick. The crazy part is that it feels like it has almost been a year or more since I’ve had to settle for purchasing pretty much anything at 2x. There’s always a promo. Amex keeps throwing authorized user bonuses at us. I’m signing up for cards left and right. I’m not a big manufactured spender so between me and P2 we usually have plenty of office supply 5x space to buy gift cards and then get purchases that would be nonbonus for 5x or 4x even taking into account the activation fees. We have multiple freedom cards with quarterly 5x that are often pretty easy to use toward gift cards for nonbonus spend. And even when I’m only getting 1x, it’s usually because I’m getting some other benefit that I value more than the cash. Next year I’m sure I’ll do some nonbonus spend on AA cards for loyalty points. The Hyatt card to get elite nights and the 15k free night.

It’s very good to have the 2.5 cents baseline to know the true cost of all this stuff. For example, maybe I put $50k on my Aviator Silver next year to get the loyalty points, and much of this spend will probably be at 1x. I value AA miles at least at 1 cent, so 2.5 cents is a very handy way to say that putting $50,000 on the card instead of getting cash costs me $750 in cold hard cash. Am I sure I want status for $750? Etc.


I’d even argue that in many cases the baseline cost is actually 5 cents since there are cards like custom cash and rotating cash back cards that get 5X in gas, groceries, dining, etc. 2.5 cents is the minimum for sure, but there’s even cards out there to give 5% cashback on things like home utilities (e.g. US Bank cash+). Granted there are limits to the 5% cards, however, those can be strategically worked around or through with P2 or multiple rotating cards.


I think one thing you are missing in your analysis is that transferable currencies also has a cash value. You compare the Freedom Unlimited as being 1.5 miles per dollar and Alliant Cash back at 2.5 pennies per dollar, but the Freedom Unlimited provides either 1.5 miles per dollar or 2.25 pennies per dollar with CSR and PYB or 1.875 pennies per dollar with CSP and PYB.

Yes those are lower than with the Alliant card, but as you (rightfully) preach daily on this site, flexibility is the most important thing to getting value in this game. Sure you can’t cash them out, put them in the bank to earn interest, then convert them back to UR, and then transfer to Hyatt, but at today’s interest rates, that isn’t a huge benefit anyway, and I would much rather keep them as UR for the flexibility.

For Amex MR, the floor is 2x MR with the BBP or 2 pennies per dollar when you hold the no fee Morgan Stanley Amex card, no $695 AF card necessary. If redeeming hundreds of thousands this way, then the Schwab Platinum becomes a compelling add on. But with just a couple of additional cards, like the Gold, or Everyday Preferred, I can earn 3 or 4 pennies per dollar, in very important categories (gas, grocery, dining) and cash them out to a Morgan Stanley account. 4x in Groceries on the Gold card now buys 4 Marriott, 2.12 United, 2.35 AA, 2.38 Flying Blue, 3.03 Lifemiles, etc when on sale. Or leave them in my MR account and selectively transfer when high value awards are available or transfer bonuses pop up.

Will I hit the occasion bank bonus or cash back SUB? Absolutely. Will I ever put spend on a cash back card for less than 3%? No. That 2.5 pennies from the Alliant card is the most it will ever be worth. Part of the Joy of Free, is also the thrill of redeeming for more than 1 cent per point, and unless I’m earning 3% or more, in cashback, I would rather earn a transferable currency and cherry pick a high value award.

If someone has enough spend, (MS) the number of points they can earn makes the opportunity cost discussion useless. You can continue to pick up sign up bonuses when available, but also spend in category bonuses and instead focus on cost of acquisition. If the points you can earn from spend is essentially limitless opportunity cost becomes irrelevant. Who cares if I’m buying MR for 1.25 cents each when my cost to acquire it was only .5 cents? I can earn any currency in any amount I want as long as my MS cost is low enough.

I know not everyone does MS, and for those, I would say, the points they earn from everyday spend are insignificant. Prioritize SUBs and use whatever card earns the highest amount in your favorite transferable currency since their earning potential is limited. Spending $20,000 per year on a 2.5% card earns $500 cash back per year, vs $300 on a 1.5% card. Is $200 per year really worth the extra analysis to optimize? No, focus on SUBs or start MSing.


Buying points can be seen as splurging for less. Even with points and the joy of free, you could probably take two economy flights for the price of a business class ticket but that choice isn’t so straightforward for a lot of us. So if you “NEED” to stay at the W-A Maldives, you can either fork over $1500+ in cash or buy points and pay $700 instead. Even if you don’t have Hilton points and never collected any, you can basically save 50% assuming availability. Having the flexibility of buying whatever points you need and not have to worry about devaluations is worth earning .25 or .5 cents less per $ spent.

The part that makes going full cash back difficult is you can’t time the sale and the purchase isn’t instantaneous. When availability opens up, it’s not guaranteed that there will be the sale you need and once you make the purchase there’s no guarantee that the award will still be available when the points are deposited.


Your “road to Damascus” revelation….finally!


Why did you move both IRAs to BoA? Wouldn’t your Premium Rewards tier be based on a single individual’s IRA?

Assuming, you use the Alliant card long-term, the opportunity cost for $1k with Alliant earning 0.25% isn’t 1% but your long-term savings ROI which is probably closer to 7% compounded or $4427 over 25 years. Of course you can also take the extra 0.5% from the Alliant and invest it. You’d need to earn about $6/month back more than a 2% no-deposit card to breakeven over 25 years. That’s $1200 spend per month. Double that if you have $50k for BoA Platinum which gets 2.25% cashback. And remember there’s a lot of 3-5% opportunities for a cashback strategy (Freedom, Discover it, Custom Cash, Amazon, Target, Costco) so this only makes sense for certain non-bonused spend. Plastiq fees would outweigh the cashback too. For small businessowners with non-bonused no/low-fee spend who want cashback and don’t have $100k, Alliant makes sense. For most others, probably not.

Jay Rome

Unbonused spend for me is vgc material. Usually fee free at od/om, but even if I have to eat the fee, it’s 1.2% on a 500$vgc vs earning 5x ur (1st year flex grocery) at Kroger, so with csr and pyb, as cash back, still a net of 6.3% cash back. Even better when category stacked last quarter, but will stack again for me since grocery will be my highest spend category for that promo this quarter as well. I’ve been reluctantly team cash back mostly since right before the Schwab deval. Felt good cashing out 300k from only 1 sub tho


There should also be consideration for the cost of moving outside of the big banks for spending, in the sense that for example there is value for putting spend on Amex cards even at 1x or 2x to keep them happy and not get in pop up jail. I agree it’s a fine line and I am not going to go over board but since I do about 4 sign up bonuses per year this is a factor. Very smart on Amex’s part, also a factor in some other banks.


That is why i put some spend on my Amex BBP (2x) rather than my BofA card.


As always, great analysis, but I’m not there yet. I’m currently at a Marriott resort for five nights receiving a value of 1.4 cents per point (staying exactly five nights boosts that figure higher of course). I’m also receiving 10 Marriott points per dollar using PayPal through AMEX plus an extra point per dollar in increments of $7500. I’ve had bonus offers this year worth pursuing on 21 of my 25 credit cards. Plus, due to you guys, I did Resy this year. If you have the time and the flexibility (which I do) there are still games to be played (even without doing traditional MS, which I don’t do) that can significantly beat simple cash back, at least so far in my opinion. However, I fully admit that this has been a very strange year in the points and miles credit card world, which probably won’t continue.


This is a good point — if you’re doing points/miles and not cash you should probably be earning somewhere between 5 and 10 points per dollar spent (figuring in a base return on spend of 4 or 5 points from fee-free gift cards for everyday spend and one or two new card bonuses). So the comparison isn’t really 2.5 cash vs. 1.5 or 2 points, it’s versus 5 or more points, at least for intermediate players and above.


I think that is a very fair comment and am really impressed how you guys can take really complicated topics and can write about them without so many footnotes and caveats that it would fill a legal brief. Unlike others, I never view any of this as a “free” breakfast or “free” room or “free” airline ticket. I have purchased many Marriott points under the old program for 1.25 cents per point because I could easily beat that number pre-Starwood and purchased points counted toward the 2 million points needed for highest level status. I would be buying Hilton points now for a half cent per point (and have purchased many in the past) but I am flush with Hilton due to cancelled trips after COVID hit. My main point is I figure the hobby costs me roughly $10 K per year on a fully completely loaded basis (compared with holding a no annual fee Citi Double Cash card and just using the cash to pay for trips), but I am retired and can take 20-25 trips a year and am getting many, many times that amount in value compared with paying cash. Plus award plane tickets to me are better than paid tickets since award tickets give me the ultimate ability to make the trip go away at no cost if something comes up. So I am not against buying points but my need for points far is more than I could buy and that is not the primary way I play the game.

Mary Jane

Nick, great candid article!


Let’s not forget booking almost anything with cash is EASIER than points. Another advantage to cash back!!!


“Almost anything” would be airline tickets if you need to cancel. Cash (cc) then is a bummer while points get redeposited and all’s forgiven.

Mike C

If the cash back card counts as one of the 5/24 cards (Does it??), then getting it may preclude getting a welcome bonus on one additional new card. Is that a lost opportunity cost to consider.

T. Jones

I love this article and the insights you provided. I also really liked KC_Queso’s suggestion to somehow incorporate this into Greg’s spreadsheet.
Your example stating that the Alliant card effectively earns the purchasing power of 4.17 Marriott Bonvoy points per dollar, thereby being a better choice, has me confused. Why wouldn’t one of the Marriott hotel cards, at 6 points per dollar, be better for spending on hotel stays?


I think Nick is talking about spend that is not in any bonus category. And hotel spend is a popular bonus category.

T. Jones

Thank you. That makes sense.


There’s just too many opportunities to earn way more the 2.5% on all spend if you’re willing to put up with a little hassle.

Not booking an award flight to Turkish Airlines hassle, just using VGC for everyday spend hassle.

He’ll, I’ve been stanning for the Altitude Reserve because you earn essentially 4.5% cashback everywhere mobile wallet is accepted and that’s nearly all in person places now and Apple Pay has great acceptance on websites now as well.


OMG I could have written this line:

Not booking an award flight to Turkish Airlines hassle, just using VGC for everyday spend hassle.

My Turkish Airlines horror story is up on Flyertalk. And I can and do use VGC for 7.5% cash back on a lot of my every day spend, so that is my current cash back benchmark. But I think the current VGC opportunities are likely to close down, so will have to think about the Alliant card at some point.

Great writing from Frequent Miler, as usual.


I personally devalue Turkish by the amount I would pay not to have to deal with Turkish.


I think there are additional psychological factors that combine with the “joy of free” to make points more desirable than cash back, at least in my case. As someone with a relatively high hourly rate my best strategy to increase cash is simply to work a few extra hours. When I compare the value of the cash back I might receive over the course of the year and see that I could do as well by distributing 15 or 20 hours of additional work over twelve months it becomes obvious that, for ongoing spend, anyway, this is a very low margin game!

On the other hand, the premium fares I generally trade my points in for are effectively unobtainable to me with cash. Not because I can’t theoretically afford them (at least occasionally) but simply because it’s not in my nature to pay $4,0000 for the same basic item (transportation between A and B) that I can get for $500. So points open up a world of opportunity that I’m simply not going to indulge in for cash.

Another factor is that the ancillary benefits that I enjoy from credit cards (such as lounge access and the occasional free bag) don’t tend to be available on cash back cards.

Anyway, I always enjoy these thoughtful articles about the value of points.


Great post! Generally, I don’t use anything other than my Alliant card on unbonused spend. Also, if it isn’t clear in my mind which card currently has the bonus on that type of spend, I revert to the Alliant. In addition to Alliant, I have Citi DC and Fidelity, which appear to have special offers based on usage, which means alternating spend on such cashback cards can be advantageous. For example, I had no recent spend on my Fidelity Elan, and the current offer is for the next 3 months to earn 3% on all spend (after just $400 spend at 2%) with no cap and another 2% on dining, food delivery, movies, and streaming service for up to another $50 total. My Citi DC has continuing spend from a past plastiq offer and does not receive “Citi offers,” but P2’s has no continuous spend and has received such offers as spend $60 at AT&T and receive $100 back. Cashback cards are good for your wallet!


Great post, Nick and thanks for the insights.

One thing I think you should also comment on is the annual fees that many points and miles cards have whereas many cashback cards (including Alliant’s 2.5 card) has no annual fee. While I agree that some cards may be worth the annual fee, I think too often the points and miles community doesn’t talk enough about the true cost of holding all these cards with annual fees versus holding cards with no annual fees instead.

A guy named Mike

I think its a benchmarking issue. For a group of people who are willing to get a points trifecta, it seems like we should be comparing against a fee free bucket that includes the Alliant Visa, 3% on grocery and dining (C1 Savor One), and a Citi Custom Cash.

As I write this, it strikes me that we are one big Hyatt devaluation away from me possibly moving from Chase to this type of setup because it looks like my annual fees are going toward portal uplift on travel and dining.


I agree. Also there’s a benefit in not having to worry about expiring FNCs, expiring points, combining points , can I book this flight or hotel for this person using my point balance etc etc.


The way you guys explain this specialized economy for travel is truly exceptional. I for one greatly appreciate this. It really is important to think of rewards you earn in comparison to cash you could’ve earned instead so you always remember it’s not truly free but still comes at a cost beyond the net annual fees of your cards. I’d be interested to incorporate this somehow into Greg’s spreadsheet for determining which cards are keepers, so I don’t blindly view them in their own silo but as a comparison to the alternative cash value I could pursue instead.