Miles or Cash Back?

[Jatindrj]

I have a VentureOne card that was my go to card that has about 750 miles on it. A couple of months ago I got my BCE card and have been using that a lot more. Im wondering if I should stick to the BCE or if I should use my Venture more. Are miles or cashback better in the long run? Also, I am talking about purchases for things that fall under the 1% category. Things I could get 2 or 3% CB i would obviously use my BCE for. I dont go on many trips (once, MAYBE twice a year) but even so, are the miles useful when applying to a trip? Or would it be better to save the extra cash?

[ajh5408]

The primary concern with miles is that redeeming them for anything other than travel expenses (like gift cards or cash) generally results in a poor (less than 1:1) ratio. If you find yourself booking a hotel (or flight/rental car) at least once or twice a year, you can take advantage of what is effectively 1.25% cash back with the VentureOne, making its rewards superior for categories that fall into BCE's 1% tier. That said, AMEX is generally regarded (by many, including myself) as offering superior purchase protections to VISA, or at least making it easier to actually use them. So, just remember to weigh that .25% cashback against the value of easier service if you intend to use any of the benefits provided by your BCE... If not, yes, the miles are technically more valuable for purchases other than those at supermarkets, gas stations, and department stores.

[distantarray]

it all depends on the card itself

like a no annual fee Venture card is 1.25% but a cash back card would be better with Capital One since it gets you 1.5% cash back. If you got the annual fee version of Venture card for 2% it would take you a 10k a year + spending on the single card to make it worth while to offset the annual fee.

with a BCE depends on if your spending a lot on groceries and gas  2% and 3% categories makes it lucrative if your an average Joe in terms of income.  So if your spending $200 a month on groceries, $200 month on gas, and only $400 a month on other categories that'll only pull you around $14 in returns each month on the BCE,  but a Venture with no annual fee with 1.25% would only add upto $10 in returns each month.

You just have to do the math if you use the BCE for groceries and gas + venture card for everything else that would return a total of $15 making it best of both worlds. Personally I just made a DCU account to get my free fico scores each month, and whenever I get cash back I redeem it for statement credit and deposit that into my vacation fund lol.  Then I calculate that into my Chase points to see how much I have saved.  I'm stashing my Citi Forward card so when I want to take a vacation I'll apply for the Citi Premier so I can get 1.33% off all my points for travel.

[distantarray]

I separate all my cards for a reason for maximum benefits

Chase Sapphire for hotel and travel (everything else card) 1.34% for everything else (7% annual bonus + 25% for travel)

Chase Freedom to feed my Sapphire card Ultimate reward points at 5points each, then use the travel bonus for a total of 6.25% 

BCP for Gas + Groceries at  3% and 6%

Citi Forward restaurants + movies + amazon at 5% 

Since Chase Freedom generally has 5% gas 6months out of the year I don't see a point of a gas card for my spending habits. since 6.25% (with Sapphire travel) and BCP 3% everywhere else I get almost 4.7% + with my annual gas spending I'll save a whopping $10 if I get a good gas card like PenFED at 5%

So my cards cover

Gas, hotel, travel, groceries, movies, restaurants, amazon + categories. I have most things covered since I don't travel too much, but I'm thinking of getting a Citi Premier once I've built up enough Thank you points to get 1.33% on travel. also a US Bank Cash+ for billpay and another category.

[HiLine]

If you travel at all, Capital One's miles are worth the same as cash. 

[martinkk]

I actually just did a PC from VentureOne to Cash Rewards so that I would receive cash bak instead of miles. My hubby won't fly so we always end up driving.

[espnjunkie]

Capital One's miles aren't really miles per se, they are cash back that can be redeemed for travel. Assuming 1% cash back vs 1 mile per dollar I would rather have airline miles (or MR/UR points) because you can often get better return from purchasing a flight with miles.

For example a 25,000 point round trip domestic flight may well cost 350.00 or so to buy, netting you an additional 100.00 in benefits.

[bs6054]

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@distantarray wrote:

Since Chase Freedom generally has 5% gas 6months out of the year I don't see a point of a gas card for my spending habits. since 6.25% (with Sapphire travel) and BCP 3% everywhere else I get almost 4.7% + with my annual gas spending I'll save a whopping $10 if I get a good gas card like PenFED at 5%

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One question is how much you spend on groceries.   I think PenFed Platinum Rewards has benefits in two cases:

1) BCP has a $75 annual fee.   Usual statement is that this is made up with just $1,250 in grocery spend, as 6% of that is $75.   But the Platinum Reward is giving 3% on groceries anyway, so, if you have both cards, the annual fee (on groceries) is only justified when you spend $2,500 or more,as 3% of that is $75.  (And same is true for BCP compared to BCE for spending under $6K) However, BCP covers department stores which Penfed doesn't, so you have to figure how much that is worth at 3% compared to 2% on BCE for free.

Of course, when 5% cards also cover groceries, the calculation is more complex, but generally they have a cap on payback.

2) And if you spend above the $6K cap, then the PenFed is good to get the extra 2% when groceries aren't covered by one of the rotating cards.

So it could be worth more than $10 in some situations apart from heavy gas usage.

[bs6054]

Like distantarray, I use several cards to maximise benefits, in my case

BCP (Groceries up to 6K)

Penfed Plat Rewards (Gas and groceries above 6K)

US Bank Cash Plus (Restaurants and bill pay, drug stores)

Chase Amazon (old, just for amazon, yes I know I could do better!)

Citi AA

Fidelity Amex (2% everywhere, Priceline Visa would probably be better)

Capital One (1.5% everywhere, where Amex is not accepted on certain foreign transactions)

While this maximizes rewards for my spending, it also makes for a very slow reward stream.  With BCP uncapped, I was getting around $125 per month back from just that, but with the cap starting, it will switch to Penfed at half the rate, and things like US Bank Cash Plus and Fidelity, with my spending, seem to take forever to reach critical thresholds ($100 for US Bank, 5,000 for Fidelity).

So have to think about opportunity costs as well as straight maximization.  Using one card, with less rewards in some instances, at least makes you feel like you are getting something every month!

[distantarray]

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@bs6054 wrote:

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@distantarray wrote:

Since Chase Freedom generally has 5% gas 6months out of the year I don't see a point of a gas card for my spending habits. since 6.25% (with Sapphire travel) and BCP 3% everywhere else I get almost 4.7% + with my annual gas spending I'll save a whopping $10 if I get a good gas card like PenFED at 5%

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One question is how much you spend on groceries.   I think PenFed Platinum Rewards has benefits in two cases:

1) BCP has a $75 annual fee.   Usual statement is that this is made up with just $1,250 in grocery spend, as 6% of that is $75.   But the Platinum Reward is giving 3% on groceries anyway, so, if you have both cards, the annual fee (on groceries) is only justified when you spend $2,500 or more,as 3% of that is $75.  (And same is true for BCP compared to BCE for spending under $6K) However, BCP covers department stores which Penfed doesn't, so you have to figure how much that is worth at 3% compared to 2% on BCE for free.

Of course, when 5% cards also cover groceries, the calculation is more complex, but generally they have a cap on payback.

2) And if you spend above the $6K cap, then the PenFed is good to get the extra 2% when groceries aren't covered by one of the rotating cards.

So it could be worth more than $10 in some situations apart from heavy gas usage.

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BCP's annual fees are offset by $25 average grocery spending a week so it's not too bad. I probably hit right about 5-6k in groceries a year, with extra for gas to keep around the cap.  Regardless remember PenFED is notoriously hard to get into, and would probably get denied lol. I was referrencing for gas purpose only doesn't really make sense for me personally.

Groceries wise we do most our groceries at Costco since there's one right down the street from us. We also have the Costco Amex true earnings card which is the best gas card hands down if you primarily use CostCo gas. (business version) 4% off already discounted gas, and all 4% at ANY stand alone gas station.