Cash-back cards better than miles

The airlines have continued to decrease the value of their mileage programs by requiring more points for rewards, changing the way points are earned and making it more difficult to use points to book flights on desirable days.

I believe that, instead of booking flights with miles by using an airline-rewards card, you are better off using a no-annual-fee credit card that gives 2% to 3% cash back on purchases. By using cash to purchase the tickets, you can get the flight times you want without any restrictions. 

I priced out a round-trip ticket from Honolulu to Chicago on United Airlines and, picking flights that had lower fares, came up with a total fare of $932, including tax, when paying cash. 

In comparison, United’s chart showed that I would need 90,000 miles for the ticket. If I used a United MileagePlus card, offering two miles in reward per dollar spent, I would need to spend $45,000 to earn the miles, not to mention another $95 for the annual card fee for the base card. [For all other card levels, United’s annual fee is $450. — Editor]

With a 2%-cash-back credit card, I would have to spend $46,600 to earn $932 in cash.

I use a Costco Visa credit card that pays 4% cash back on gas purchases, 3% cash back on travel expenditures, 2% cash back on purchases at Costco and 1% back on all other purchases and which, itself, has no annual fee.* With my Costco card, I would need to spend only about $31,100 to earn the $932 — cash in hand.

Even if I use only a 2%-cash-back card to earn rewards, when using cash I am not tied to one airline for my travels, and I can fly during preferred flight times to locations that are not available when using miles.

Again, obtaining desired flights is easier to do when paying in cash versus using miles.

MERLE CROW

Honolulu, HI

* To qualify for a Costco Visa card, you must be a Costco member and pay an annual membership fee of $55 to $110, depending on the level. (Mr. Crow has a standard membership and pays $55 per year.)