Points and miles are one of the best ways to get traveling for a large discount or even at no cost. However, cash back is a great secondary currency to points and miles. Many points and miles enthusiasts forget about cash back because they are so focused on reducing the cost of hotels and airfare. That is especially true for those who collect transferrable points. This post explains why you should earn cash back in addition to points and miles.

I still suggest earning one type of transferrable points as a primary currency. Any of the major programs can provide lots of value, depending on what you want to redeem points for. Personally, I earn Chase Ultimate Rewards (UR) points as my primary currency. But I also have two cash back cards that I use for certain purchases.



Believe it or not, cash back is the most flexible travel currencies out there. That’s because you can use it for anything! Oftentimes, travelers come across expenses that cannot be paid for with points or miles. These expenses are “unusual” in that regard. But that’s where redeeming cash rewards comes into play. You can redeem cash back for anything from hot air balloon tours to local commuter transit.

Furthermore, the flexibility of cash back is why I do not recommend cards that earn “travel cash back”, like the Discover It Miles. These cards earn cash rewards that can only be used for “travel purchases” (such as airfare, hotels, and cruises) as opposed to anything you want. Such limitations with redeeming can be avoided by choosing the right cards and currencies.

Flexibility and value are also reduced for those who earn airline and/or hotel points from co-branded cards. Co-branded cards are usually (not always) terrible options for earning because you are locked into one airline or hotel’s points. Plus, you can be earning much more value from a card that earns more flexible rewards.


Objectivity & Fixed Value

The value of points and miles is often changing and usually subjective. There is no set value for transferrable points, airline miles, or hotel points. That’s because the value of these points depends on the individual (your mileage may vary), thereby making value a subjective matter.

The Points Guy posts what they believe to be the values of different points and miles each month. And they even go as far as putting the values on their home page. But all they are doing is creating “false objectivity” through numbers. However, those who have cash rewards do not have to worry about such values because every cent earned is worth one cent – an objective measure.

Furthermore, cash rewards are a nice alternative in terms of redemption options, especially compared to certain transferrable points. For example, American Express is notorious for giving Membership Rewards (MR) earning cardholders a plethora of redemption options. But the catch is that all their non-travel redemption options are worth less than 1 cent per point (CPP). Cash back cards do not have this problem because there are only so many ways to directly redeem cash.


You’re Either Starting Out or Rebuilding

Many people start off by earning cash back out of necessity. When you’re starting out or rebuilding, you probably do not have the credit scores or history to acquire points and miles cards. But you do have a few cash back cards to start out with. Plus, many beginners are grateful to earn any type of rewards in the short term, despite wanting to travel in the long term.

After a few years and some excellent credit history, you can eventually get some points and miles cards. And some of your cash back cards might even come with you while you travel. Nonetheless, they will still build your credit history and remain as a foundation because most cash back cards have no annual fee.

I had two cash back cards during my first two years of having credit cards. At that time, I used my Discover It and my old Chase Freedom for everything. I earned rewards quickly especially when I spent within the rotating categories. And I built my credit history so I can eventually get more cards. I was happy just to have my two cards because I knew they would eventually lead to earning even more.


Final Draw

Cash back can be an interesting alternative for travelers. Those who want a flexible secondary currency and one that has a fixed value should look into a cash back card. Plus, those who are starting out or rebuilding their credit history will have a better chance at getting approved for a cash back card than a travel card.