3 Reasons I Made the Switch From Cash Back to Credit Card Miles

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Getting into the travel rewards credit card world can be intimidating at first.  With so many options, it can get extremely overwhelming.  As soon as I turned 18, I dove head first into it with cash back cards.

In my opinion, cash back credit cards are much easier to monitor, like my Costco Anywhere Visa^® Card by Citi.  The cash back accrues throughout the year, and then you receive a check in February with my rewards from the previous year.  And with great earnings like 4% cash back on gas (for the first $7,000 a year, 1% after that) and 3% cash back on restaurants and travel, the potential earnings are great!  I should be receiving around $600 this coming February.  The largest argument I had against credit card miles is the constant move by loyalty programs to devalue their points.

However, as I’ve gotten older and now that my wife and I are beginning to become what I call “travel monsters,” we value our points and miles much more than a few hundred dollars.  My favorite cards earn AMEX Membership Rewards points, like the The Platinum Card® from American Express and American Express® Gold Card.  With these cards my wife and I have been able to earn over 350,000 AMEX Membership Rewards points, which I estimate to be worth $7,000!  And our plan is to stretch them to be worth even more in travel.

Here are the 3 reasons why I finally made the switch from cash back to points & miles cards.

3 Reasons I Made the Switch From Cash Back to Credit Card Miles

There isn’t a wrong way to earn credit card rewards.  But it’s always good to consider what’s best for your situation.

1.   I’m Not Broke Anymore.  Yay!

While I was in college and fresh out of college, I was financially struggling.  Like, bad.  I had lots of student loans, and had just moved to Utah to start my professional career.  I simply needed to save money where I could.  I wasn’t able to travel very much so saving every dollar was essential and cash back cards fit the bill.

Now that I am married and in a better financial situation, and travel has become more important to me, points & miles are stretching our dollars and experiences even farther!  As a perfect example, I was recently able to score $1,400 in flights for ~$100 because of credit card miles!  And even more recently, I booked a 7-night stay at the Hilton Ponce in Puerto Rico completely on points earned from my AMEX Hilton credit cards, saving me ~$1,800.

2.   Credit Card Miles Make Your Hard Earned Dollars Go Even Farther

Earning points and miles is great, but redeeming them in an efficient manner is even more important in my eyes.  If your redemption rate is lackluster, it can defeat the purpose of earning high value points like Chase Ultimate Rewards points and American Express Membership Rewards points.

Here is a perfect example.

Let’s say I spend $100 a month eating out.

With my Costco Anytime credit card, I would earn 3% cash back, earning me $3.00.

With my American Express Gold Card I earn 4 points per dollar at restaurants and I would earn 400 AMEX Membership Rewards points, worth ~$8.  However, that $8 can be stretched even farther if redeemed properly.

For you baseball aficionados out there, cash back cards are great for hitting singles and doubles all day long.  If you want home runs and even possibly grand slams, points and miles travel rewards credit cards give you that opportunity.

3.   Credit Card Miles Encourage You to Travel!

This is a bit of a situation for those of you into human psychology.

For myself, booking travel is an adrenaline rush.  However, paying cash brings down that rush for me, even if it is cash earned from a cash back credit card.

If I am able to book with points & miles, I feel like I’ve just scored a game winning goal (I played water polo in high school and college).

Also, with the large selection of transfer partners with AMEX Membership Rewards, it encourages me to try different airlines.  Specifically, I will be transferring points to fly on Singapore Airline Suites!  And with these different airlines, come adventures to new places.  Another bucket list item for me is to fly Emirates Airlines to shower at 38,000 feet.  This is possible by transferring AMEX points to Emirates (but be warned, the taxes & fees will be high).

Simply put, points & miles are the gateway to endless opportunities to travel.

Bottom Line

I know many people have little to no desire to travel and are simply looking to save money.  In this case, a cash back card can do wonders for a person’s finances, and there is nothing wrong with that!

However, with a little bit of the travel bug and strategic planning, your points and miles cards can take you to places you would have never thought possible with incredible savings!

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