Travel Points

[wageslave23]

I have a legit question, this is not meant to be snarky.  I see a lot of people on these forums using travel points to pay for vacations and then saying how cheap the vacation was.  My understanding is that credit card travel points are basically the same as cash back points.  You could either have a travel cc and rack up 2% travel pts or you could have a cash back cc and get 2% cash back.  So the travel points are the same as cash.  When you choose to have a travel cc and use the points on travel you are trading that for the cash back you could have gotten with a cash back credit card.  Am I missing something?  I get that sometimes the travel cards will give you slightly more travel value than if you were to get cash back from a different credit card.  But either way if you use $2,000 in travel points to go on vacation you are probably giving up at least $1,000 cash back that could have been earned instead right?

My wife treats the cash back on her credit as found money which drives me nuts, but thats a different issue.

[therethere]

I have travel as part of my annual budget. At least one trip to visit my parents and in-laws and ideally one international trip. The optimum redemption for credit card points is usually via travel bookings. And in my experience straight cashback cards giving you 2%+ are kind of rare. I don't necessarily spend more on a flight or hotel just because I have points. So to me, it basically is cashback. This just sounds like semantics to me.

[hdatontodo]

Signup bonuses on travel cards give travel accounts a big jump start. They often cannot be redeemed for cash or give a pitiful conversion for gift cards.

I got a hotel credit card and charged the $3K needed to get the 80K point signup bonus. I got two nights at beachfront property for free by using 60K points. It would have cost $1,000.

If I charged $3K on my Citi Double Cash card, I would have $60. Not even close to being a better option.

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[wageslave23]

Signup bonuses on travel cards give travel accounts a big jump start. They often cannot be redeemed for cash or give a pitiful conversion for gift cards.

I got a hotel credit card and charged the $3K needed to get the 80K point signup bonus. I got two nights at beachfront property for free by using 60K points. It would have cost $1,000.

If I charged $3K on my Citi Double Cash card, I would have $60. Not even close to being a better option.

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Ok so in your case it sounds like you got a great bonus.  So shouldn't the "cost" be the cash bonus you would have made with a different credit card?  Probably $250 for $3k spend.  So I would say that vacation cost you $250 because you chose to get that reward instead of a cash reward from a different credit card.  Definitely didn't cost you $1,000 but it also wasn't free.

[dandarc]

You're ignoring sign up bonuses, which quite often is far more than 2% of spend, and also quite often is worth much less if you directed to a true cash-back card.

Barclaycard AAviator is a good example - pay one $99 annual fee and make a single $1 purchase and you get 60K American Airlines points - enough for a one-way business class ticket to Japan if you're flexible and can therefore snag a saver fare. Cheapest economy fares to Japan, at least that I've seen, run $750+ each way. I found a place you could sell 60K American Airlines miles for $360.

But ultimately account for it however makes sense to you.

[parkerk]

Same here, my credit card gives a way better dollar value for travel rewards than for cash back.

I think the key is to know what you want out of your card rewards and get the card that suits that best.  If you want an effective 1-2% discount on every purchase?  Get the best cash-back card you can find.  If you have far-away family or if travel for fun is important to you?  Get the best travel rewards card you can find and you'll come out ahead compared to a cash-back card.

I hear you on the "rewards as found money" annoyance though. I think it's important to at least have an idea of what the goal of your rewards is for or it just lends itself to wasteful spending. 

[parkerk]

Signup bonuses on travel cards give travel accounts a big jump start. They often cannot be redeemed for cash or give a pitiful conversion for gift cards.

I got a hotel credit card and charged the $3K needed to get the 80K point signup bonus. I got two nights at beachfront property for free by using 60K points. It would have cost $1,000.

If I charged $3K on my Citi Double Cash card, I would have $60. Not even close to being a better option.

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Ok so in your case it sounds like you got a great bonus.  So shouldn't the "cost" be the cash bonus you would have made with a different credit card?  Probably $250 for $3k spend.  So I would say that vacation cost you $250 because you chose to get that reward instead of a cash reward from a different credit card.  Definitely didn't cost you $1,000 but it also wasn't free.

What card are you getting nearly 10% cash bonus on???  I want one!

[dandarc]

Signup bonuses on travel cards give travel accounts a big jump start. They often cannot be redeemed for cash or give a pitiful conversion for gift cards.

I got a hotel credit card and charged the $3K needed to get the 80K point signup bonus. I got two nights at beachfront property for free by using 60K points. It would have cost $1,000.

If I charged $3K on my Citi Double Cash card, I would have $60. Not even close to being a better option.

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Ok so in your case it sounds like you got a great bonus.  So shouldn't the "cost" be the cash bonus you would have made with a different credit card?  Probably $250 for $3k spend.  So I would say that vacation cost you $250 because you chose to get that reward instead of a cash reward from a different credit card.  Definitely didn't cost you $1,000 but it also wasn't free.

What card are you getting nearly 10% cash bonus on???  I want one!

Barclaycard has 20% offers available - $100 after $500 in spend on the AARP branded cards.

[wageslave23]

Signup bonuses on travel cards give travel accounts a big jump start. They often cannot be redeemed for cash or give a pitiful conversion for gift cards.

I got a hotel credit card and charged the $3K needed to get the 80K point signup bonus. I got two nights at beachfront property for free by using 60K points. It would have cost $1,000.

If I charged $3K on my Citi Double Cash card, I would have $60. Not even close to being a better option.

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Chase Business Credit cards are usually right around $500 for $5k spend.  I haven't done any CC churning in a while but usually you can get $200-300 for $2k-5k spend easily.

Ok so in your case it sounds like you got a great bonus.  So shouldn't the "cost" be the cash bonus you would have made with a different credit card?  Probably $250 for $3k spend.  So I would say that vacation cost you $250 because you chose to get that reward instead of a cash reward from a different credit card.  Definitely didn't cost you $1,000 but it also wasn't free.

What card are you getting nearly 10% cash bonus on???  I want one!

[Dreamer40]

My understanding is that credit card travel points are basically the same as cash back points.  You could either have a travel cc and rack up 2% travel pts or you could have a cash back cc and get 2% cash back.  So the travel points are the same as cash.

That’s not quite right. You typically get much higher travel credits or they go farther. There are also lots of other ways to game it out that people discuss on complicated YouTube videos. Things like converting points to miles at crazy rates. It’s a thing you can dive really deep into. There a lot of internet resources available on how to do it.

Plus, the good travel cards have other perks like free airport lounge access, which equates to free meals and alcohol for you and several friends who might be traveling with you. And a few free rideshare rides per year for free transportation to the airport or around town at your destination, TSA precheck included, etc. If you actually use all the stuff, it can add up to better and cheaper travel expenses. More so than a straightforward cash back program.

[kpd905]

I am almost done spending $4,000 on my Chase Sapphire Preferred card, and will end up with 64,000 points which can be used for $800 in the Chase travel portal.  So 20% back on my $4,000 of spending.  My Double Cash would have given me $80.

So when I book my $800 of travel, I guess the "cost" was $80, which doesn't seem so bad.

[wageslave23]

I am almost done spending $4,000 on my Chase Sapphire Preferred card, and will end up with 64,000 points which can be used for $800 in the Chase travel portal.  So 20% back on my $4,000 of spending.  My Double Cash would have given me $80.

So when I book my $800 of travel, I guess the "cost" was $80, which doesn't seem so bad.

See this is what I am talking about.  The 64,000 points could be cashed out for $640.  So it cost you $640 to book your travel.  This is the type of thing my wife would say too and it drives me nuts.

[wageslave23]

You're ignoring sign up bonuses, which quite often is far more than 2% of spend, and also quite often is worth much less if you directed to a true cash-back card.

Barclaycard AAviator is a good example - pay one $99 annual fee and make a single $1 purchase and you get 60K American Airlines points - enough for a one-way business class ticket to Japan if you're flexible and can therefore snag a saver fare. Cheapest economy fares to Japan, at least that I've seen, run $750+ each way. I found a place you could sell 60K American Airlines miles for $360.

But ultimately account for it however makes sense to you.

This makes sense to me.  So the Barclay trip would have cost you $99.  I didn't know there were that good of travel card bonuses available compared to cash back.

[NotJen]

Signup bonuses on travel cards give travel accounts a big jump start. They often cannot be redeemed for cash or give a pitiful conversion for gift cards.

I got a hotel credit card and charged the $3K needed to get the 80K point signup bonus. I got two nights at beachfront property for free by using 60K points. It would have cost $1,000.

If I charged $3K on my Citi Double Cash card, I would have $60. Not even close to being a better option.

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Ok so in your case it sounds like you got a great bonus.  So shouldn't the "cost" be the cash bonus you would have made with a different credit card?  Probably $250 for $3k spend.  So I would say that vacation cost you $250 because you chose to get that reward instead of a cash reward from a different credit card.  Definitely didn't cost you $1,000 but it also wasn't free.

But you can do both.  Get the cash card AND the hotel card.

I am almost done spending $4,000 on my Chase Sapphire Preferred card, and will end up with 64,000 points which can be used for $800 in the Chase travel portal.  So 20% back on my $4,000 of spending.  My Double Cash would have given me $80.

So when I book my $800 of travel, I guess the "cost" was $80, which doesn't seem so bad.

See this is what I am talking about.  The 64,000 points could be cashed out for $640.  So it cost you $640 to book your travel.  This is the type of thing my wife would say too and it drives me nuts.

I know this isn't true for everybody, but I only use points for travel that I WOULD HAVE DONE ANWAY.  So the savings is truly the cost of the flight or hotel or whatever.

I haven't paid real money for a flight since 2014*.  But they were all flights I would have taken anyway.


*ETA: To clarify, I have paid taxes for flights (generally $11.20 per round trip) plus 1 $89 card fee.

[kpd905]

I am almost done spending $4,000 on my Chase Sapphire Preferred card, and will end up with 64,000 points which can be used for $800 in the Chase travel portal.  So 20% back on my $4,000 of spending.  My Double Cash would have given me $80.

So when I book my $800 of travel, I guess the "cost" was $80, which doesn't seem so bad.

See this is what I am talking about.  The 64,000 points could be cashed out for $640.  So it cost you $640 to book your travel.  This is the type of thing my wife would say too and it drives me nuts.

I can see your point, but even if it "cost" me $640, that is $640 I wouldn't have had without opening that card.  If I say it costs me $640 to book, then I guess I have to consider that income.  If I don't really consider it as income, I can instead just consider it a savings/discount on my travel expense.

I get around $5,000-8,000 in miles/points a year from credit cards, so I don't worry too much about the accounting methods.  Recently I've just been selling all of the miles to a miles broker for cash. 

[dandarc]

You're ignoring sign up bonuses, which quite often is far more than 2% of spend, and also quite often is worth much less if you directed to a true cash-back card.

Barclaycard AAviator is a good example - pay one $99 annual fee and make a single $1 purchase and you get 60K American Airlines points - enough for a one-way business class ticket to Japan if you're flexible and can therefore snag a saver fare. Cheapest economy fares to Japan, at least that I've seen, run $750+ each way. I found a place you could sell 60K American Airlines miles for $360.

But ultimately account for it however makes sense to you.

This makes sense to me.  So the Barclay trip would have cost you $99.  I didn't know there were that good of travel card bonuses available compared to cash back.

This one isn't as well known - AA pushes the Citi cards which are more standard "XX,XXX miles after Y,YYY spend in 3 months" a lot harder. Still, if I find I'm getting an 75%+ discount, I'm fine without figuring out the cash-value alternative.

[hdatontodo]

Over 5 years back, the Southwest Card had a 50K signup bonus which could be redeemed for $500 in Amazon gift cards. The annual fee was $69, if I recall. I had to charge $3K. Yes, I could have used that for airfare, but we bought my son a $500 bike.

Once, the Amex Platinum card had a 100,000 bonus with a very pricey annual fee. Value about $1K. After I got the bonus, I cancelled, and they prorated/reduced the fee.

Couples getting multiple cards each have scored Asia airfare with a private room and a bed on the plane.





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[Jack0Life]

I have a legit question, this is not meant to be snarky.  I see a lot of people on these forums using travel points to pay for vacations and then saying how cheap the vacation was.  My understanding is that credit card travel points are basically the same as cash back points.  You could either have a travel cc and rack up 2% travel pts or you could have a cash back cc and get 2% cash back.  So the travel points are the same as cash.  When you choose to have a travel cc and use the points on travel you are trading that for the cash back you could have gotten with a cash back credit card.  Am I missing something?  I get that sometimes the travel cards will give you slightly more travel value than if you were to get cash back from a different credit card.  But either way if you use $2,000 in travel points to go on vacation you are probably giving up at least $1,000 cash back that could have been earned instead right?

My wife treats the cash back on her credit as found money which drives me nuts, but thats a different issue.

What you're talking about is normal CC spending and using the points you earn for traveling or straight cash. Usually using your "points" for traveling and such are more advantage than converting the points for cash.

What some of these people you're referring to including myself, we use a term "travel hack".
Most of the points we use for our cheap vacations are accumulation from bonus CC signups.
I sign up, my wife signs up. Cancel after the first year. Then we wait for whenever there is a healthy sign up bonus and we sign up again. They call this "churning". This is how people are able to accumulate so many points.
Example:
- I signed up for Jetblue when they had the 100k bonus. Wife also signed up. We now have 200k+ Jetblue points.
- I signed up for Southwest a couple of yrs ago and got companion pass where my wife flies for free. My companion pass have expired and I still have 140k+ SW points still.
- My wife took turn and signed up for SW in Nov 2021. She earned ger companion pass in Jan. Now I fly for FREE until end of 2023. She has over 180K+ SW points.
- Wife also signed when Chase had the Preferred for 100K sign up bonus. She now has 150K+ Chase points. I had over 230k+ Chase points but I started using it a lot lately by transferring the points to Hyatt.
- We both also signed up for Chase IHG cards when they had 150k bonus points. Between IHG hotels and Hyatt, we are covered.
- Sometimes I have too many points sitting around and don't pay attention to them and they expired. I had over 200k+ American Airline pts that I let expired. That still hurts.

So as you can see when we travel, flights and hotels are usually covered.
We usually paid for rental car, food and misc. which are cheap vacations.
Wife doesn't like fast food much so vacation expenses ae usually mostly food.
We decided this is the year where we will travel a lot so we are depleting the points quicker than normal or else our point stash usually grow not deplete.