Originally Posted by
broadwayblue
I've always preferred points. If you have the flexibility to plan your travel reasonably far in advance the awards are relatively easy to come by. I'd probably never pay $5,000 for a business class ticket to Europe, but the ~60k points it took to redeem a business class award was more valuable to me than the $1,200 I could have earned had I gone the cash back route. Had I taken the cash, it would have cost more than that to fly coach. For me points are a no-brainer, but as has been said many times, it's different for everybody.
I think that sums it up well, though I don't know where you get 2% cash back on most purchases (excepting the recently closed Schwab deal and specialized rebates on gas, groceries, etc.).
The better assuption is that most people will get 1% cashback so 30k in spending would net $300. In my case I am currently spending $30k on my Chase BA card which will yield approx. 38k BA miles plus a BA companion ticket. I am pretty sure the miles and cert. will be worth more to me than $300 but you never know until you try to redeem.
The real deals of course are for upgraded travel. We just spent 50k UA miles for a transcon F roundtrip. The same ticket quoted today retails for almost $2000 (or more depending on flight times). So the ROI is 4 cents per mile. Now of course we would never spend $2000 for an F ticket, but the alternative was $400 for an economy ticket. So essentially we are buying F for an extra $100 which you could never do with a cashback card. (And this made Mrs. B really happy, which is priceless!
As noted point cards have other benefits. For example with SPG you can do cash plus points and I have used that to pay $60 + 4k points for a room that would otherwise cost $300/night. Since I really can't afford to spend that much the alternative would probably be to stay in a lesser quality hotel as the cashback card would only yield $40 vs. 4k points on SPG Amex. So the points are getting me a "first class" room for $40.
Finally note that the mileage and point cards have a steady stream of bonus point deals, so the return is usually better than 1 point per $1 spent.
Addendum: After writing this I realized I had left out the downside of mileage programs, which is that you may find it impossible to redeem for peak dates at a good ROI. Over the past 3 years, we have never been able to redeem miles for saver awards to Cancun at Xmas (tried 4 airlines) nor to Orlando during spring break. By contrast $100k in spending would have yielded a cash rebate of $1000 that would have bought 2 coach tickets. So cashback might be a better option depending on your needs.