Originally Posted by
ZenFlyer
I have recently been pondering the same question, and came out on the side of miles. Which cards have you found that net 5% cashback? The only (U.S.) cards of which I am aware are either restricted to certain purchase categories or relatively low spending limits, or both. One could potentially get several different cards to maximize the number of categories earning 5%, but this would require a lot of coordination and work involving rotating quarterly categories -- ie, not simple at all —and I don’t think even then you could achieve 5% across the board.
there is this reddit thread
Reddit - Dive into anything
Originally Posted by
MM_someday
I think it really depends on the categories, your typical redemptions, and net expenses. What categories are your weak spots?
I have a setup with Amex Plat for flights (personal or company), AA Citi Exec for hotels on company dime, Chase preferred for personal hotels, rentals and dining (also has a 10% anniversary bonus), freedom flex for gas (Gas quarter) and general-use gift cards (Paypal quarter), Walmart Capital One card for Walmart groceries (pairs well with Amex Walmart+) and Chase Freedom Unlimited for the rest. I will eventually get the C1 Venture X (2%) to replace what freedom unlimited does now (1.5%) and allow me to transfer the Walmart card points to miles.
Valuing Amex MRs, Chase URs, C1 miles and AA miles at 1.5c, I'm getting at least a 7.5% on flights, 30%+ on hotels, 4.95% on dining, 7.5% on gas, 7.5% on groceries. The Vanilla gift cards also help with these miscellaneous expenses upto $1.5k per flex card that you have, buying them with Paypal at CVS effectively gives you 10.37% cashback on anything factoring in the $5.95 purchase fee per $500 gift card. Outside these, there's a floor of the C1 2 miles = 3% on pretty much everything else, except rent, where a Bilt Rewards can get you 1 mile or 1.5% back. There's also Citi Custom Cash for 5% on niche stuff to earn ThankYou points upto a limit. The annual fees of the above pay for themselves independent of the cashback with the other perks (at least the ones that actually matter to me, not the Peloton or Saks credit).
In every category except for dining, I don't think there's a cashback card that does better. Some folks value Amex, Chase and C1 points at 2c. Then there's the whole idea of churning which beats all of the above.
my current setup has 0 annual fees. the cashback cards im talking about generally have 0 AF. just amex, citi exec and venture x alone is 1,685 in AF. im not a big enough spender to justify that. i know you get other benefits with those cards as well, but they are generally not for me, defintely not enough to justify the AF.
also correct me if im wrong, but credit card points are valued more than actual airline because of flexibility, so i would compare against the value of airline miles, which are usually lower. but i agree that you can technically get more value of out miles. the issue here is flexibility and convenience. i cant put a value of that, but sometimes it certainly feels like the additional value i may get doesnt commensurate with my time and effort.