Travel is not free, even with miles and points. Even when you’re booking award tickets and reward nights, you’re still going to spend money for taxes on the ticket. If it’s an international ticket, the taxes will be significant. If it’s an international ticket using miles from a non-US frequent flyer program, the taxes and fees will almost cetainly be really significant.
Just last week a reader tweeted me for verification on taxes, she was using British Airways points to fly from the US to Barbados and was shocked that (for her family of 5…) taxes were over $100 per person. That’s not free.
There’s local transportation, you likely spend more on food when you’re away than when you are home, and do more activities too (though personally I find myself saving money on things I don’t do while I’m away – I don’t generate nearly as much dry cleaning).
There are three reasons why you would want to consider a cash back or rebate type of credit card.
- You can pick up extra cash to help cover the expenses of travel with a good cash back credit card, and arguably the best (with a big signup bonus too) is the Barclaycard Arrival PlusTM World Elite MasterCard®.
- I’m a big advocate of miles and points earning. But when you put spending on a credit card that doesn’t help you earn any bonuses, just gets you one point per dollar, you’re effectively buying miles at two cents apiece. Cash back may be better.
- And if you travel so much, or generate so much credit card spending, that you have more miles than you’ll realistically use in the near-term (before the miles devalue), cash back may be better.
And of course if you’re not going to be using your points for premium cabin international travel, getting cash towards travel may be a better deal especially since you won’t have to worry about capacity controls and can pick the flights you want and even earn miles flying them.
You may even be better off getting 2% of more cash back and using the cash to buy miles when there’s a sale (and they’re available at less than two cents, like you can regularly get US Airways and Avianca miles for).
The Barclaycard Arrival PlusTM World Elite MasterCard® gives you 40,000 points after 31000 in purchases within 90 days. That’s worth $400 towards travel. And the card gives you 10% of your points spent on travel back, so another $40 or effectively a $440 signup bonus.
“Travel” is airlines, hotels, cruises, train, and car rentals. So this covers the extra expense for a car on your trip.
Or use the points for an airline ticket you’d buy anyway, saving yourself the cash for spending money on your trip. (Or use the points to buy someone else’s ticket, and have them give you the cash.)
This is effectively a 2.2% cash back card, since the card earns 2 “miles” per dollar with each point worth a penny towards travel plus 10% rebated as well. That’s the highest cash back return for all spending across the board of any card I know of.
It has a $0 annual fee the first year, $89 thereafter, has no foreign currency transaction fees, and gives you complimentary TripIt Pro membership (normally costs $49).
(The Barclaycard Arrival PlusTM World Elite MasterCard® provides referral credit to me if you are approved after applying through the links in this post. I greatly appreciate it when you do choose to use them. Of course I always want to share the best available offers no matter what, so several links aren’t mine as I’ve found better offers elsewhere and share those with you instead.)