Originally Posted by
vapers
It's actually 2.27 % back for dollars since you get miles for the actual purchase too. Here is how it works:
100 dollar travel expense gets you 200 miles. You need to use 10000 miles to pay for the 100 dollars but then you get 1000 miles back.
So in effect, to pay for 100 dollar travel expense you use 10000-1000-200=8800 miles.
10000/8800=1.1364 cents value per Barclays "mile"
Since you get 2 miles per dollar spent, this makes the percentage back %2.273 for spending on Barclays card.
We're pretty far down the percentages - since credits are in $25/2500 mile increments, you have to spend quite a lot of money for it to matter - but you are double counting somewhere.
Suppose I spend $12,500 on the card, with enough in travel so redemption isn't an issue. I earn 25,000 miles. I can redeem those for $250 credit, and get 2500 additional miles bonus. I can redeem those 2500 for a $25 credit and 250 miles bonus. I've now earned $275/12,500=2.2% plus 250 miles. But I can't redeem those 250 miles. If I call it a day, I've earned 2.2%.
What if I spend more? E.g. If my total spending is $125,000 I get $2775 in credits and 250 miles. 2.22% plus 250 miles.
But I could spend more: $1,250,000 yields $27,775 = 2.222% plus 250 miles. Etc...
And, if I was somehow really overvalued that leftover and called that last 250 miles worth 5 cents each, I'd earn $12.50 more, so $27,785.5/1250000=2.223%, which we know is too high, since the 250 miles leftover are worth less than 5cents each.