It isn’t hard to find a credit card that doesn’t offer some kind of rewards program. Miles or cash back credit cards are abundant. In fact, according to a survey by Fidelity, 55% of cardholders own a rewards credit card. It only makes sense as credit cards these days allow cardholders to earn from spending with cash back or save up points and mileage for that next vacation. Deciding between miles or cash can be tough. A majority of Americans prefer the cash back option, but miles and points are still very popular. So how do you choose which is best for you: miles or cash?
Benefits of Mileage and Points
For the world traveler, accumulating mileage from daily purchases is more advantageous. The most popular card is the Chase Sapphire Preferred. With the Chase Sapphire Preferred, cardholder earn two points for every dollar they spend on purchases considered travel related. They also make one point for every other purchase. What this means for people deciding between miles or cash is that these points can then be transferred to a number of airlines.The cardholder has the discretion of choosing the cheapest flight for the least amount of points. It should be noted that mileage and points are only beneficial if the cardholder accumulate the necessary points to make them worth while. For example, families that are looking that one vacation a year may not benefit from the rewards and free travel. The points accumulated are normally designed for a single cardholder’s benefit. Mileage and points are still a very viable option for the businessman or the young college student looking to travel. It allows cardholders to accumulate points for a number of rewards or be used to travel for free.
Benefits of Cash Back
Cash back allows cardholders to get between 2-5% cash back on all purchases made with their credit card. Unlike points and mileage, the payout of cash back is almost immediate as every month cardholders get 2-5% of all purchases being transferred to their checking accounts. The Citi Double Cash credit card is the best cash back card available. It offers a 2% flat fee on all purchases with no annual fees or cap on how much cash back cardholders can accumulate in a year. Cash back also doesn’t require the patience that points and mileages requires to become worthwhile. Choosing between miles or cash back, most people pick cash back due to the passive and consistent amount of money that cardholders are getting.
Miles or Cash Back: The Verdict
Regardless of which credit card rewards program cardholders picks, consistently paying off the monthly statement needs to occur in order to make these rewards worthwhile. Cash back is suited for those who pay their balances on time each month because the late fees and interest kill the cash back value the cardholder may be getting. The same can be said about mileage and points cardholders as becoming late with payments can derail any trips that they have because interest rates tend to be higher with mileages and points cards. It ultimately depends on the cardholder’s lifestyle in deciding if cash or miles and points are right for you.