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

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5/17/17

*The Barclaycard Arrival® Plus World Elite Mastercard® 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.

CompareCards 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 CompareCards 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 World Elite Mastercard®, Amex EveryDay® Preferred Credit Card, and Chase Sapphire Preferred® Card 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 World Elite Mastercard® works similar to a cash back card, with points that can reimburse any travel purchase made with the card. You Earn 2X miles on all purchases, and offers a 5% rebate of points with every redemption, giving it a slight edge over similar cards. Enjoy 60,000 bonus miles after spending $5,000 on purchases in the first 90 days and paying the annual fee gives it a big head start.

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

With the Chase Sapphire Preferred® Card, a flight on Southwest costs 13,722 points on average on the routes studied, while with The Amex EveryDay® Preferred Credit Card, transferring to Delta nets flights for 27,871 points on average. The Amex EveryDay® Preferred Credit Card 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.

The information related to The Amex EveryDay® Preferred Credit Card has been collected by CompareCards and has not been reviewed or provided by the issuer of this card.

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 AAdvantage® Aviator® Red World Elite Mastercard® from Barclays 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 Credit Card, and Southwest Rapid Rewards® Plus Credit Card, beat a basic 2% cash back card.

The information related to the AAdvantage® Aviator® Red World Elite Mastercard®  has been collected by CompareCards and has not been reviewed or provided by the issuer of this 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 Card – 18 month BT offer is usually a better bet than using a travel rewards card for domestic flight awards.

Bank of America customers with high account balances can also get better than 2% rewards via the Bank of America® Travel Rewards Credit 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® Card or Chase Sapphire Reserve® can outshine the Barclaycard Arrival® Plus World Elite Mastercard®.

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 aBarclaycard Arrival® Plus World Elite Mastercard®.

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 CompareCards, 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$2,104 33,734228,448-
Amex Everyday Preferred - Delta transferTransferable points$2,074 27,871187,202-
Chase Sapphire Preferred - Southwest transferTransferable points$2,027 13,722148,411-
Chase Sapphire Reserve - Book via ChaseTransferable points$1,983 22,489162,380-
Chase Sapphire Reserve - Southwest transferTransferable points$1,976 13,722162,380-
Capital One VentureCash for travel$1,969 33,734208,882-
U.S. Bank Altitude ReserveCash for travel$1,915 22,489142,787
U.S. Bank FlexPerks Gold American ExpressCash for travel$1,899 20,000122,798-
U.S. Bank FlexPerks Travel Rewards Visa SignatureCash for travel$1,865 20,000116,486-
Southwest Rapid Rewards PremierAirline miles$1,831 13,722142,441-
PNC Premier Traveler Visa SignatureCash for travel$1,817 33,734198,882-
Southwest Rapid Rewards PlusAirline miles$1,787 13,722133,441-
Discover it MilesCash for travel$1,687 33,734168,882X
Cash Back - 2%Cash back$1,687 33,734168,882X
Amex Everyday Preferred - Book via AmexTransferable points$1,680 33,734187,202-
Chase Sapphire Preferred - Book via ChaseTransferable points$1,663 26,987148,411-
First National Bank TraveElite American ExpressCash for travel$1,598 33,734160,008X
U.S. Bank FlexPerks Select+ American ExpressCash for travel$1,591 20,00094,441X
Amex Everyday - Delta transferTransferable points$1,521 27,871125,783X
American Express Premier Rewards Gold - Delta transferTransferable points$1,498 27,871139,639-
Merrill+ Credit CardCash for travel$1,475 25,000109,441X
Bank of America Travel RewardsCash for travel$1,465 33,734146,662X
Citi ThankYou Premier CardCash for travel$1,447 29,867145,124-
Wells Fargo PropelCash for travel$1,432 25,301114,238-
Starwood Preferred Guest American Express - Delta transferTransferable points$1,423 22,871109,441-
TD First Class Visa SignatureCash for travel$1,372 33,734137,380X
PenFed Platinum Rewards VisaCash for travel$1,335 33,734133,611X
Citi PrestigeCash for travel$1,294 25,364142,584-
Starwood Preferred Guest American Express - Book via SPGTransferable points$1,285 25,000109,441-
SunTrust Travel RewardsCash for travel$1,275 33,734127,584X
Wells Fargo Propel 365 American ExpressCash for travel$1,266 33,734126,778X
Wells Fargo RewardsCash for travel$1,265 22,48984,441X
Amex Everyday - Book via AmexTransferable points$1,257 33,734125,783X
Capital One Venture OneCash for travel$1,254 33,734125,551X
Gold Delta SkyMiles Credit CardAirline miles$1,254 27,871119,441-
Blue Sky from American ExpressCash for travel$1,225 25,30191,941X
Platinum Delta SkyMiles Credit CardAirline miles$1,222 27,871149,441-
American Express Premier Rewards Gold - Book via AmexTransferable points$1,205 33,734139,639-
United MileagePlus ExplorerAirline miles$1,110 42,613164,441-
Starwood Preferred Guest American Express - Alaska transferTransferable points$1,077 29,102109,441-
PenFed Premium Travel Rewards American ExpressCash for travel$1,043 33,734104,441X
Chase Sapphire Reserve - United transferTransferable points$1,016 37,339162,380-
Chase Sapphire Preferred - United transferTransferable points$98442,613148,411-
Alaska Airlines VisaAirline miles$90634,102114,441-
Cash Back - 1%Cash back$84433,73484,441X
Starwood Preferred Guest American Express - American transferTransferable points$73240,000109,441-
The Platinum Card from American Express - Book via AmexTransferable points$69333,734144,441-
Citi / AAdvantage Platinum SelectAirline miles$69347,017123,163-
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 CompareCards 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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