This article is backed by both experience and real-life learning. A lot of us in the United States, while starting our Credit Card journey come across this dilemma to choose between Credit Cards offering Cashback or Points. I was in the same boat — I started with a Bank of America Travel Rewards Card (Points), and the second one was an Amex Blue Cash Card (Cashback). 4 years later, I realized how these two differ and how cards offering points are way more valuable than cashback in most cases. Yes, in most cases. What you are spending very much drives which card to use.
For everyone's reference, I have 9 cards (in sequence of how I got them):
- Bank of America Travel Rewards
- American Express Blue Cash (Referral Link)
- Chase Sapphire Preferred (Referral Link)
- Apple by Goldman Sachs
- Chase Amazon Prime (Referral Link)
- Bilt – Wells Fargo (Referral Link)
- American Express Platinum (Referral Link)
- Chase World Of Hyatt
- American Express Hilton Honors (Referral Link)
As you can see it is a big mix of cashback and reward points cards — all based on real-life experiences.
When Cashback Makes Sense
American Express Blue Cash (Cashback) card is the first Cash Back card that I got, and I use it to make big online purchases only if no other card works. Amex Blue Cash gives me 3% up to $6000 on online purchases anywhere — so if I have to buy something from a website (other than Amazon) I use this card.
The next Cashback card is Apple by Goldman Sachs, which offers me 3% cash back on purchases made at the Apple store. Apple is usually a big basket purchase and having an Apple card helps you get those big purchases in installments without any additional fees. If I am not buying on installment I prefer using an Amazon card to buy Apple gift cards and then use them to buy Apple products.
Last but not least, the Amazon Prime Rewards Card which offers 5% (6% in some cases) on purchases made on Amazon and Fresh — by far my most used cashback card since Amazon has become my go-to shopping place.
The Heavy Hitters: Points Cards
My first go-to is Chase Sapphire Preferred, a $95 card that brings me access to Chase's ultimate reward portal. I get $50 in hotel credits every year, 5X on Chase travel purchases, 3X on dining purchases, 2X on all other travel purchases, and 1X on everything else. It is very easy to get a value of more than the annual fees for this card.
The next point-based card in my wallet is Bilt by Wells Fargo. This $0 card is the only card in the market that gives me reward points for the rent I pay every month. This card also gives me 3X on dining purchases, 2X on travel purchases, and 1X on everything else (including rent). Bilt rent day benefit doubles all points (except rent) for purchases made on the 1st of every month.
American Express Platinum is a whopping $695 card that looks like an unnecessary expense. But when you start digging into the benefits it offers, you can extract more than $1500 every year in value. This is my card for travel. Along with 5X points on flights and bookings made on the Amex Portal, the following credits are also available:
- $200 Hotel Credit
- $240 Entertainment Credit
- $200 Uber Credit
- Free $155 Walmart Plus Membership
- $200 Airline Fee Credit
- $100 Saks Credit – Split Half Yearly
- $189 Clear Credit
- $100 Fee Credit for Global Entry / TSA Precheck
- Global Lounge Access (Centurion and Priority Pass)
- Marriott and Hilton Gold Status
Why I Vote for Points
There are so many travel partners that these points become an endless opportunity. There are a lot of other benefits too, including travel insurance and protections offered in case of calamity.
I use all these cards in a planned way to maximize my points and benefits. It takes a little more effort but the value you get is immense. Most of these points can be converted back to statement credits at any point — or transferred to travel partners to make high-value bookings at a fraction of the cash cost.
Make your spending work for you!