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Travel Rewards or Cash Back?

These days I feel like we're bombarded with credit card options telling us about these amazing cards that we NEED to get to get cash back or travel rewards.  Instead of contributing to the craziness, I'm going to walk you through why I believe travel rewards is a better deal.

Cash Back or Travel Rewards with a Honolulu sunset

What about "Cash Rules Everything Around Me"?
Yes that song is right, cash is pretty great.  You can spend it, save it, hide it, whatever you want! However, when it comes to redeeming from credit card spend, it is a whole different story.

Take a look at the similarities of these two cards.  Both the Capital One Quicksilver and Chase Freedom Unlimited give you an unlimited 1.5% cash back on all your purchases.  Both cards also offer a signup bonus of $150 (15,000 points) if you spend $500 within the first 3 months of opening and have no annual fee.


For both cards, you would have to spend around $6,700 to get $100 back which in everyday spending is going to take at least few months!  So that 1.5% cash back is looking pretty terrible right now.  Assuming you took advantage of the signup bonus, you now have $250 (25,000 points) in cash back.

Now lets look at how the redemption options differ by card.
  • Capital One Quicksilver: Redeem $250
  • Chase Freedom Unlimited - Redeem $250  OR  Transfer to Chase Sapphire Preferred/Reserve and redeem for 25,000 United Miles

Wait WHAT? Ok let me explain.  The Chase Sapphire Preferred and the Chase Sapphire Reserve are two travel credit cards offered by Chase. So when the Freedom Unlimited is paired with either one of these cards, you can then transfer them to be redeemed by select Chase travel partners (one of them being United Airlines).

Essentially the 1.5% cash back earned by the Freedom Unlimited can be redeemed as Travel Rewards if you also have the Chase Sapphire Preferred or Reserve.


Who cares about 25,000 United Miles?
Take a look below at this sample itinerary! It gets you pretty far:

Instead of $250 cash, we now have a round trip flight to SFO worth $572.60!


Ok now what?
A majority of the time, travel rewards can be redeemed for more than the actual cash back.  For me, it's a no brainer between the two.  Since my wife and I always end up traveling at least 1-3 times a year, it works perfectly for us!

Ultimately when you decide between travel rewards or cash back, you need to ask yourself: Will I actually use it? The last thing you want is for these points to be sitting around and never redeemed.

Get ready for upcoming posts with credit card reviews, cool points redemptions, and more on my everyday points strategy and how it can work for you!

Feel free to comment with any questions and thoughts below.  Connect with me on Facebook!
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