Well, you have to do the math. Whether it's worth it or not will usually depend on which two cards you're comparing.
Generally, I use a 2% cash back on everything card, because it makes my life simpler and I usually don't need to optimize to get much more (and also don't fly incredibly often). But, this year was different: spouse and I would be spending a year in different locations, meaning that our living expenses would more than double (I was going to HCOL area, but he was still staying in our place in LCOL area). We would both be taking frequent weekend flights between the two cities (short flight, long drive).
My thought process goes like this:
BIG THRESHOLD QUESTION: Would you be taking these flights anyway, and paying in cash? If NO, stop right there. Cash will be more useful to you. That's why I've always not done miles before. But, my situation turned into YES this year, so I proceeded.
1. How much $ are these points worth?
After talking to a card-churning travel-hacking friend, we decided to each sign up for British Airways visa cards, because [reasons to do with partner airlines and our respective cities]. I signed up a couple weeks before husband did, so we got different deals.
Me: Minimum spend of $2000 gets me 50k avios.
Him: Minimum spend of $2000 gets him 50k, when he spends $10k he gets another 25k, and when he spends $20k he gets another 25k.
Total spent: $22,000*
Total miles: 172,000 [150k bonus +22k for each dollar]
Total round-trip flights: 19**
Cash value of those flights: $3420***
2. Opportunity cost - what would I have gotten with my 2% CB?
Total spent: $22,000
Cash back: $440
Answer: I'm $3k ahead with doing miles, not cash back.****
A TON of details could mean that it isn't a good deal, so you need to pick two cards (one cash back, one miles) and figure out whether the miles are better than the cash back. The most important consideration, IMO, is whether you'd actually be spending $3400 on plane tickets anyway. I probably would have, in my situation.
*People can hit this with manufactured spending, but unfortunately, we were going to spend this much anyway within the year. (Rent in HCOL can be paid with cc, husband's university tuition can as well, plus our everyday purchases).
** Shortly after we signed up, BA changed the rate for short-haul flights, making our points worth less. This is a danger of miles (the credit card company cannot unilaterally decide to devalue the purchasing power of cash). But, we booked almost all of our flights out ahead of the cutoff.
*** Assuming $180/flight, which is the usual price between our destinations. However, BA has the benefit of only charging points based on distance, not cash value of flight, which can obviously changed based on all sorts of factors. Twice now I've booked flights to visit my husband at the last minute, when the cash value of the flight was north of $300, so this estimated savings is probably on the low side. This is not true of all mileage systems--lots do it based on the actual cost of the plane ticket--and you have to take it into account when you do the math.
**** BUT, as soon as I hit the bonus max with $22,000 spending, I'm switching back to my CB card, because I've done the math to compare what happens when I'm just getting a measly 1 point per dollar spent, and it isn't worth it. I would get 1 flight home for every $9,000 spent. (That's ignoring the point devaluation mentioned above). That's $180 in benefit. If I spend that on my cash back card, I get the exact same benefit - $180. But this time it's in cash, which is significantly more useful to me than an equal amount of plane ticket purchasing power, because I could use it on that ticket OR some other thing that matters more at the moment. Now that the points have been devalued it's even more compelling: I have to spend $15,000 for one $180 flight - at the expense of $300 cash.
