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Frequent flier? Opt for airline card over cash back

Summary

Our expert says that if you fly regularly, you’re better off with a miles card than with cash back — especially if you’re loyal to one airline

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Question for the CreditCards.com expert

Dear Cashing In,
I’m looking for the best deal in a rewards credit cards. In your opinion, is it better to have an airline credit card and earn miles or a cash back card and use the cash to buy airline tickets? Thanks. — S. Godwin

 

Answer for the CreditCards.com expert

Dear S,
Short answer: If you’re going to use the card to purchase airline tickets — and if you can take advantage of the extra travel it affords — go with an airline credit card.

The main reason for choosing a cash back card instead of one that offers frequent flier miles is that the cash gives you more flexibility to choose how you use your rewards. If you fly often enough to know you’re going to be using your rewards only (or primarily) on travel, then I would go with an airline credit card — particularly if you can keep your flights to one airline or network of airlines.

Using an airline credit card is a way to take maximum advantage of the airline’s loyalty program. Miles beget miles. If you buy your tickets using your airline credit card, you often get twice the miles. If your lifestyle involves a fair amount of plane travel, you should take advantage of that.

Let’s say you want to book a $574 Delta roundtrip flight from Atlanta to Vancouver. Whether you pay for it using cash back rewards or frequent flier miles, the ticket isn’t going to cost you anything and your Delta Skymiles account will be credited 4,724 miles — roughly the distance traveled on the trip. If you use a Chase Freedom Visa or a Citi Dividend World MasterCard, which both award the standard 1 percent in cash back on this purchase, you will earn a grand total of $5.74 in rewards. You don’t get any additional benefits for using cash back rewards to buy a plane ticket.

If you book the same flight using your Delta Skymiles American Express card, on the other hand, you get an extra 574 miles (one mile per dollar spent) added to your Skymiles account, which brings the total reward miles to 5,298 for booking that flight. Also, if you don’t have enough miles to cover your flight, you can purchase part of the flight using Skymiles and put the rest on the card, earning miles for that amount. If you only apply 10,000 frequent flier miles to your flight purchase using the card, you can knock $100 off the price of the flight.

You also get one free companion ticket with this card each year and 10,000 Medallion Qualification Miles when you reach $25,000 in eligible purchases during a calendar year. Those miles, often called elite qualifying miles, help you achieve elite status. (Miles earned from credit card purchases typically aren’t counted toward elite status, only actual miles flown or elite-qualifying miles.) If you use your card to buy food, beer or other items on the plane, you can add more miles. End result: You end up with more than 3,000 miles in your account by the end of the trip — and more opportunity for travel in the future.

If more travel ranks as a major reward for you, remember that you can maximize miles on your card by shopping through the airline’s online portal — in the example I’m using, that would be SkymilesShopping.com — especially if you take advantage of “bonus miles” promotions that allow you to double or triple miles per dollar spent.

On the other hand, if that flight to Vancouver is the only flight you’re going to book this year, then it makes more sense to get a cash back card. All those extra miles won’t do you much good if you don’t use them, and this way you can start maximizing your cash back instead.

See related:Want to be elite? Know that all miles aren’t created equal, Your credit card can make you elite

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Published: September 17, 2011

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Credit Card Rate Report Updated: June 12th, 2019
Business
15.61%
Airline
17.54%
Cash Back
17.68%
Reward
17.57%
Student
17.79%

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