Credit Cards: Cash Back vs. Airline Miles

When you have good credit you can qualify for great incentives on credit cards. The two most popular rewards are cash back and airline miles. So which should you choose?

I don’t know a single person who doesn’t say, “I want to travel more.” So a travel card seems like a no brainer right?

Wrong.

When you accrue airline miles they just sit in your account. Airline miles cards also just promote more spending. When is the last time you took an inexpensive vacation? Never! Because there is no such thing. Travel by its very nature is expensive.

I’m not saying to never travel. What I’m saying is you want to travel on your own terms, not just because your miles were about to expire, or those were the only dates available when you went to use them.

So let’s look at a smarter way.

We use a cash back credit card and redeem our rewards check each month. Then we park that money in an Ally bank account where it makes roughly 1% in interest. Now our rewards are growing themselves, and we can still use that money to buy a plane ticket, should we choose to do so.