Milecards

2017 Cash or Miles Study – Do travel rewards beat cash back for domestic flights?

merrillplusairplanephoto

5/17/17

*The Barclaycard Arrival Plus offer has expired.

With so many changes to airline mile award prices in recent years, and banks escalating what they pay in rewards, are miles or cash back a better bet for rewards on domestic flights? While using travel rewards for international flights often offers the most value, 88% of airline passengers in the U.S. are flying on domestic trips according to the Bureau of Transportation Statistics.

MileCards.com ranked 38 travel rewards cards with points that can be used for domestic flights, including the primary airline mile cards of the 5 largest airlines, along with the bank point rewards cards from the 10 largest banks. 

We ranked the travel rewards cards vs cash back using our recent study looking at actual award redemption prices for over 100,000 domestic award flights on the 100 most popular routes for award travel with the 5 largest airlines (Alaska, American, Delta, United, Southwest). Then we used Bureau of Labor Statistics data for average household category spending in common credit card categories to estimate how many points each card earns, and combined that with the award flight data to estimate flight awards earned over 3 years.

We factored both the number of points needed for an award in each mile and point program, and how fast each card earns points from spending, including special bonus categories. We benchmarked against a no annual fee 2% cash back card, such as the Citi Double Cash, which earns $1,687 in cash rewards over a 3 year period.

Best cards for domestic flights

CardFlight Value Earned Over 3 Years
Barclaycard Arrival Plus$2,104
Amex Everyday Preferred$2,074
Chase Sapphire Preferred$2,027
Chase Sapphire Reserve$1,983
Capital One Venture$1,969
U.S. Bank Altitude Reserve$1,915
U.S. Bank FlexPerks Gold American Express$1,899
U.S. Bank FlexPerks Travel Rewards Visa Signature$1,865
Southwest Rapid Rewards Premier$1,831
PNC Premier Traveler Visa Signature$1,817
Southwest Rapid Rewards Plus$1,787
Cash Back - 2%$1,687

Flight value earned based on 3 year flight value earned, less annual fees paid, plus annual travel credits. Award prices were based on a MileCards.com study of over 100,000 award prices on the most popular routes for award bookings in the U.S.

To calculate rewards points earned, card spending of $2,345 per month was used, and is based on average household expenditures reported by the U.S. Bureau of Labor Statistics in categories typically eligible for credit card purchases, and excluding categories such as housing payments and vehicle purchases. Bonus categories were factored when applicable.

11 travel rewards cards beat 2% cash back

11 of the 38 travel rewards cards ranked came out ahead of a no annual fee 2% cash back card for domestic flight rewards when factoring annual fees. 

And three significantly outperformed.

The Barclaycard Arrival Plus, Amex Everyday Preferred, and Chase Sapphire Preferred each offer over $2,000 worth of reward value over 3 years, compared to $1,687 for a 2% cash back card.

The Barclaycard Arrival Plus works similar to a cash back card, with points that can reimburse any travel purchase made with the card. It earns 2x points on all spending, and offers a 5% rebate of points with every redemption, giving it a slight edge over similar cards. A large 50,000 point intro bonus worth over $500 in travel gives it a big head start.

The Amex Everyday Preferred and Chase Sapphire Preferred earn transferable points that can turn into real airline miles, as well as an option to use points like cash toward travel. The Sapphire Preferred’s ability to transfer points to Southwest Rapid Rewards, and the Amex Everyday Preferred’s ability to transfer points to Delta SkyMiles give them superior value for domestic flights.

With the Sapphire Preferred, a flight on Southwest costs 13,722 points on average on the routes studied, while with the Amex Everyday Preferred, transferring to Delta nets flights for 27,871 points on average. The Everyday Preferred benefits from earning 1.5x points on all spending when the card is used for 30 or more transactions in a billing period.

These cards also offer the possibility for savvy users to get even greater value by using other transfer partners, especially for international flights.

Only 2 airline cards came out ahead, both from Southwest

If you’re looking for domestic flight awards, sticking to a single airline card isn’t a good bet unless you fly enough to cover the annual fee with bag fee waivers or other perks. And even then, you’re often better off putting your spending on a different card.

Two things put airline cards at a disadvantage. First, most only earn a basic 1 mile per dollar spent with few bonus categories like dining or groceries. Second, excluding Southwest, the average price of a domestic award in miles is a high 37,332 miles round trip.

The American Airlines Barclaycard AAdvantage Aviator Red was the lowest ranked card in our study.

An average domestic award costs 47,017 miles with American AAdvantage, and when factoring annual fees the card earns just $669 in reward value toward domestic flights over 3 years. Traditional airline miles are generally a better value for international than domestic flights.

Southwest is the exception. With a generous sign on bonus and anniversary bonuses, plus very low prices of 13,722 points on average for a round trip flight, the flight value from its two credit cards, the Southwest Rapid Rewards Premier, and Southwest Rapid Rewards Plus from Chase, beat a basic 2% cash back card.

When paying no annual fee, cash back usually wins

When travel rewards are involved, an annual fee can pay off. All of the cards that came out ahead of a 2% cash back card carry an annual fee.

But for consumers who want to pay no annual fee, a 2% cash back card like the CIti Double Cash is usually a better bet than using a travel rewards card for domestic flight awards.

The Discover It Miles, with a generous first year offer that effectively offers 3x points on all spending, is the only no annual fee travel rewards card that matches a 2% cash back card for earning power.

Bank of America customers with high account balances can also get better than 2% rewards via the Bank of America Travel Rewards card using Bank of America’s Preferred Rewards program.

Personal spending habits matter

It’s important to take into consideration personal spending habits when evaluating a card. For people who spend more than the average $3,008 a year on dining away from home, a card with a 2x or 3x bonus on dining like the Chase Sapphire Preferred or Reserve can outshine the Barclaycard Arrival Plus.

For example, a consumer who spends $6,000 a year on dining could earn $2,252 in flight awards net of fees over 3 years with a Chase Sapphire Reserve versus $2,104 with a Barclaycard Arrival Plus.

While our study used the average spending habits by category reported by the Bureau of Labor Statistics, using a calculator that calculates card rewards based on personal spending habits, like this on on MileCards.com, can help give a better sense of which cards will outperform.

Detailed results

Points and flight value earned over a 3 year period

CardTypeFlight Value Earned (3 years)Average miles needed for a domestic roundtripPoints earned (3 years)No annual fee
Barclaycard Arrival PlusCash for travel$2,10433,734 228,448 -
Amex Everyday Preferred - Delta transferTransferable points$2,07427,871 187,202 -
Chase Sapphire Preferred - Southwest transferTransferable points$2,02713,722 148,411 -
Chase Sapphire Reserve - Book via ChaseTransferable points$1,98322,489 162,380 -
Chase Sapphire Reserve - Southwest transferTransferable points$1,97613,722 162,380 -
Capital One VentureCash for travel$1,96933,734 208,882 -
U.S. Bank Altitude ReserveCash for travel$1,91522,489 142,787
U.S. Bank FlexPerks Gold American ExpressCash for travel$1,89920,000 122,798 -
U.S. Bank FlexPerks Travel Rewards Visa SignatureCash for travel$1,86520,000 116,486 -
Southwest Rapid Rewards PremierAirline miles$1,83113,722 142,441 -
PNC Premier Traveler Visa SignatureCash for travel$1,81733,734 198,882 -
Southwest Rapid Rewards PlusAirline miles$1,78713,722 133,441 -
Discover it MilesCash for travel$1,68733,734 168,882 X
Cash Back - 2%Cash back$1,68733,734 168,882 X
Amex Everyday Preferred - Book via AmexTransferable points$1,68033,734 187,202 -
Chase Sapphire Preferred - Book via ChaseTransferable points$1,66326,987 148,411 -
First National Bank TraveElite American ExpressCash for travel$1,59833,734 160,008 X
U.S. Bank FlexPerks Select+ American ExpressCash for travel$1,59120,000 94,441 X
Amex Everyday - Delta transferTransferable points$1,52127,871 125,783 X
American Express Premier Rewards Gold - Delta transferTransferable points$1,49827,871 139,639 -
Merrill+ Credit CardCash for travel$1,47525,000 109,441 X
Bank of America Travel RewardsCash for travel$1,46533,734 146,662 X
Citi ThankYou Premier CardCash for travel$1,44729,867 145,124 -
Wells Fargo PropelCash for travel$1,43225,301 114,238 -
Starwood Preferred Guest American Express - Delta transferTransferable points$1,42322,871 109,441 -
TD First Class Visa SignatureCash for travel$1,37233,734 137,380 X
PenFed Platinum Rewards VisaCash for travel$1,33533,734 133,611 X
Citi PrestigeCash for travel$1,29425,364 142,584 -
Starwood Preferred Guest American Express - Book via SPGTransferable points$1,28525,000 109,441 -
SunTrust Travel RewardsCash for travel$1,27533,734 127,584 X
Wells Fargo Propel 365 American ExpressCash for travel$1,26633,734 126,778 X
Wells Fargo RewardsCash for travel$1,26522,489 84,441 X
Amex Everyday - Book via AmexTransferable points$1,25733,734 125,783 X
Capital One Venture OneCash for travel$1,25433,734 125,551 X
Gold Delta SkyMiles Credit CardAirline miles$1,25427,871 119,441 -
Blue Sky from American ExpressCash for travel$1,22525,301 91,941 X
Platinum Delta SkyMiles Credit CardAirline miles$1,22227,871 149,441 -
American Express Premier Rewards Gold - Book via AmexTransferable points$1,20533,734 139,639 -
United MileagePlus ExplorerAirline miles$1,11042,613 164,441 -
Starwood Preferred Guest American Express - Alaska transferTransferable points$1,07729,102 109,441 -
PenFed Premium Travel Rewards American ExpressCash for travel$1,04333,734 104,441 X
Chase Sapphire Reserve - United transferTransferable points$1,01637,339 162,380 -
Chase Sapphire Preferred - United transferTransferable points$98442,613 148,411 -
Alaska Airlines VisaAirline miles$90634,102 114,441 -
Cash Back - 1%Cash back$84433,734 84,441 X
Starwood Preferred Guest American Express - American transferTransferable points$73240,000 109,441 -
The Platinum Card from American Express - Book via AmexTransferable points$69333,734 144,441 -
Citi / AAdvantage Platinum SelectAirline miles$69347,017 123,163 -
Barclaycard AAdvantage Aviator RedAirline miles$66947,017133,163

Methodology

Flight value earned based on 3 year flight value earned, less annual fees paid, plus annual travel credits. Award prices were based on a MileCards.com study of over 100,000 award prices on the most popular routes for award bookings in the U.S. from March 1 – October 31, 2017 with the following average roundtrip prices for each airline program:

Alaska: 34,102 miles

American: 47,017 miles

Delta: 27,871 miles

Southwest: 13,722 miles

United: 42,613 miles

To calculate total flight value, the average roundtrip airfare in our study of popular award routes of $337 was used, and for options that only use Southwest points, the value per ticket reflects the average airfare on Southwest routes studied of $205.

To calculate rewards points earned, card spending of $2,345 per month was used, and is based on average household expenditures

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