I’ve asked in the past whether you are better off earning cash back instead of miles from your credit card.
- If you earn 1 mile per dollar, instead of 2% cash back, you’re effectively buying miles at 2 cents apiece. Is that something you would normally do when the airlines offer to sell you miles?
- It can be a better strategy to earn cash back and use the cash to buy miles than to put spending on a mileage-earning credit card, especially when you would just be earning one mile per dollar for the spend.
- If you want domestic coach tickets, you’re better off with cash most of the time and just buying tickets (and not worrying about award availability).
I like my miles for international first class travel. And the best use of spending is to earn credit card signup bonuses. But for everyday, unbonused spending many will find that cash is king.
Previously I had argued that the Priceline Rewards Visa was the best overall cash back card. It earns 2% cash on all spending that can be applied as a credit to your monthly statement. There’s also a $50 signup bonus after first purchase, and it’s a no annual fee card.
But the Barclaycard Arrival PlusTM World Elite MasterCard® may be even better.
Key Benefits of the Barclaycard Arrival PlusTM World Elite MasterCard®
Points-earning: The card earns 2 “miles” per dollar but since each point is worth a penny towards travel that’s effectively 2% cash back. And then there’s the 10% bonus on travel redemtpions which makes the return on the card 2.2% cash back — the highest cash back return for all spending across the board of any card I know of.
Signup bonus: 40,000 points after $3000 in purchases within 90 days. That’s $400. But apply it to travel and you get 10% of your points back so you net $440. And apply that extra $40 to travel and you get 10% on that. So it’s actually $444 and so on ($444.44…).
How points redemption works: Request reimbursement for your travel expenses within 90 days, and a couple of weeks later you get 10% of your points refunded. You’re booking on your own (no need to go through a designated portal, you can still use your preferred cash back or mileage-earning portals and/or apply travel vouchers, etc.) with your preferred travel provider, whatever flights etc. you want and earn miles and upgrade as normal.
Annual fee: $0 the first year, $89 thereafter
Additional benefits: No foreign currency transaction fees. Complimentary TripIt Pro membership which normally costs $49.
Now you need to have enough points banked to cover the expense that you want to reimburse on your statement, I don’t believe they do partial reimbursements.
And spending that would earn a bonus on different categories of spending is likely going to be more rewarding on another card.
So I wouldn’t say that 2.2% cash back is best when other cards are offering you bonus points. But for spending, say at your dry cleaner, that you aren’t going to get bonus points for? Cash probably is best.
How Does the Barclaycard Arrival PlusTM World Elite MasterCard® Compare After the First Year?
The Barclaycard product has a $0 annual fee the first year, $89 thereafter. So is it worth keeping?
You’d have to put $45,000 a year on this card after the first year to justify the annual fee versus the I had argued that the Priceline Rewards Visa. That’s because with the extra 1/5th of a percent cash back (when applied to travel) you’ll earn an incremental $90 with $45,000 in spend.
The math works out much better of course if you would otherwise pay for TripIt Pro, and/or you don’t have another no foreign currency transaction fee credit card but do travel outside the United States.
For the first year unquestionably the Barclaycard Arrival PlusTM World Elite MasterCard® is the better card. After the first year it depends on your spending patterns.
(Note that the card does offer referral credit to me if you use my link to apply and are approved, which I greatly appreciate.)