Which is better: points or cashback?

Cashback is better for simplicity and flexibility. Points are better if you are willing to learn how to maximize transfer partners to book luxury travel for outsized value.

How much is a travel point worth?

It varies. If redeemed for statement credits, points are usually worth 1 cent each. If transferred to airline partners for business class flights, they can be worth 2 to 5 cents each.

Can I convert points to cashback?

Often yes, but usually at a suboptimal rate (e.g., 0.6 to 1 cent per point). If your primary goal is cash, it's better to get a dedicated cashback card.

Points vs Cashback for Travelers

The math on which saves more.

The Great Debate

When choosing a credit card from our travel credit card comparison, one of the first decisions you'll face is whether to earn points or cashback. Both have their merits, but the right choice depends on your travel style, how much time you want to spend managing rewards, and your financial goals.

The Case for Cashback

Cashback is the king of simplicity. You spend money, you get a percentage back, and you can use that cash for anything: rent, groceries, or travel.

Pros of Cashback

Ultimate Flexibility: Cash is accepted everywhere.
Zero Learning Curve: No need to study award charts or transfer ratios.
No Devaluations: A dollar is a dollar. Airlines frequently devalue their point systems, making your hard-earned points worth less overnight.

The Math: If you spend $30,000 a year on a flat 2% cashback card, you earn $600. Simple.

The Case for Travel Points

Travel points (like Chase Ultimate Rewards or Amex Membership Rewards) require more effort but offer significantly higher upside, especially for international travel.

Pros of Points

Outsized Value: Transferring points to airline partners can yield 2-5 cents per point, especially on international business or first-class flights.
Travel Perks: Point-earning cards often come with better built-in benefits like airport lounge access and travel insurance.

The Math: If you earn 60,000 points on a card and redeem them for a business class flight that would have cost $3,000, you are getting 5 cents per point. That same spend on a cashback card might have only yielded $600.

Which Should You Choose?

Choose Cashback if you travel infrequently, prefer budget airlines or Airbnbs (where points are harder to use effectively), and want a low-maintenance setup.

Choose Points if you fly internationally at least once a year, enjoy staying in traditional hotel chains, and are willing to put in a little effort to maximize transfer partners.

If you're ready to start earning points, check out our guides to the best travel cards in the US or the best travel cards in Canada.