I did credit cards the wrong way for 15+ years, having one nearly maxed card and paying interest for the "privilege" of having debt. I started with balance transfer cards and used whatever cashback I got to help pay down debt, controlling my spending by budgeting. I got into maximizing cashback as I got out of debt, and after it was paid off I started transferring my cashback to a HYSA.
I have gotten into points over the past few years, primarily because P2 and I travel, aiming for 40-50 nights somewhere else every year. Because we travel a decent amount, including domestic and international, and much of this travel includes hotels, points have gone a long way for us.
I'm not on any team - I just want the highest rate of return. I know 2X MR is worth less than 5% cashback, based on my history of redeeming over 900k of MR, so I know a no annual fee cashback card will be the best in many categories: Amazon, Target, internet/streaming, utilities, entertainment, and electronics stores, as well as rotating categories at times.
But in several points categories, I regularly see higher than 5% return in the form of travel points, sometimes much higher, and some of these categories are common - dining, grocery, gas, travel, transit, etc. And certain points cards are good "sponges" for non-category, such as Amex Hilton Surpass for the certificate at $15k/year spend or FNBO Best Western Premium for 40k bonus points at $5k/12 cycles spend. My non-category ends up being Surpass/BW Premium until bonuses > Amex BBP for 2X MR > Amtrak for 1X at worst, with every Amtrak search I have ever done showing 2.8cpp return. If a 3% unicorn comes back I'd definitely go for it, but I'd never consider a 2% card when I can get 2.8% in Amtrak value at the very worst, and that's only when past hotel card bonuses + if Amex is not accepted + it is not a joint purchase (otherwise would use P2's Venture X).
So I find myself somewhere in the middle. I find that some people who are on a "team" feel the need to "prove" their system is better. There are some people on "team cashback" who talk about points in ways that make it clear they have never used points before, but they are experts in how bad points are. Then there are some "team points" people who inflate their return on flights that they would never pay for, doing things like basing awards rates on one-way paid rates to further inflate the cpp.
Neither extreme has been my experience - I think the reality is somewhere in the middle. This is a business - issuers are making tons of money off cashback cards and points cards. We've seen things like 3% cashback cards coming and going, 5% cards often having caps and/or rotating, and other nerfs to cashback. We've seen devaluations, credits being sliced up coupon-style with increased annual fees, restructured "benefits," and other nerfs to points/perks. Whether one is into cashback, points, or both, cards become stronger or weaker over time, and there is a benefit to analyzing one's system and making adjustments as desired.
Going back to travel, since P2 and I try to travel as much as we can, I end up coming across good points bookings naturally - it is easy to search for paid prices and then check the "Use Points" box (or similar) to see what the points rates are. I spend much more time searching paid rates than I do points options. And for MR, the point dot me service that is now included works very well. Sometimes I'll be able to use points for the airfare but pay for the lodging, other times we use points or certificates on hotels but pay for the airfare. And sometimes it's all points or all paid - it's whatever the best value is. For an upcoming trip, 2 of 3 nights are on points, 1 night paid; 2 train rides are on points, but a one-way return flight was only $94.
And that's the thing - sure, cash can be king, and when the best value booking is paid, we pay. People who use points also have the option of using cash. But if the best value booking is by points, and we have those points (or points that can be transferred), then that means there is an additional option available to us that is not available to people who only do cashback.
Now, if people do not travel, or their travel would not see good enough return, then yeah, a points card with an annual fee likely would not make sense. But if someone travels a decent amount, especially if this includes flights/hotels/trains/etc, then points cards likely would make sense. Whether someone should do cashback, points, or both comes down to a large number of factors that are different for every person/couple/family/business/etc.
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