Transitioning from Points to Cashback
 

So I know there's a lot of noise being made over recent devaluations. Because of that, as quite a few people have mentioned, cash back cards are starting to look a lot more enticing for some. That leaves me with this question, what does the average cash back need to be on a card for someone here to really consider switching from something like the CSP/PRG to a card like the Arrival or BCP?

For me it would need to be somewhere between 2-3%, so the Arrival looks pretty good, but I'm curious to see input from others while I consider options.

Depends on how much MS you do and how many big signup bonus CCs are still out there for you (and of course how much you plan on flying)?

I'm not a big spender (less than 10K a month) and still have plenty of bonus CCs to go through so the question for me is still moot. And I fly internationally less than once a year, anyway.

I've switched most of my spending to the Marukai card recently for 3% CB on everything. Drawback is a notoriously low credit limits, but it works for me.

I need to buy a new car in the next year or so, so I'm not churning right now. I only MS about $4k a month, since VR and decent GCs are hard to find here (and even harder to liquidate, for GCs)

The issue I have with CB CCs is that the non-capped CB %s are not high enough to offset the value of points/miles, even after devaluations, and the capped amounts of 5% CB or whatever are too low to make good use out of them ($1500 a quarter on Freedom, $3k a quarter on some Citi cards, etc).

So I use both, but between regular spend and MS, once I blow through the capped bonus limits it's still about points and miles.

Yeah, that's the debate I'm dealing with myself. I'm not a big spender, and only MS through AP. There also aren't any VR in my area that I know of, so I don't do that.

Even with the $4k a month I'm manufacturing with AP, that's only ~50k points a year with the CSP after the 7% dividend. Compare that to just over $1,000 on the Arrival just doing AP at 2.2% cash back, not including regular spend.

While I know Hyatt just went under a devaluation, they are the only one I transfer my UR points to now, and I can still get 3.2c out of it, so I think I'm going to be sticking with my UR cards. I just need to get the Freedom and the Hyatt card and keep those three long term...at least for now.

I guess that leaves us here:

At what point does a mile in a fixed program (for the purposes of fixed program I mean Hyatt/UA/etc) lose enough value because of lack of flexibility that the CB cards will become attractive? What does the average CB have to be for a card? 3%?

That's a sweet card! I hadn't heard of it before.

Unfortunately "Must be a resident of the state of California, Nevada, Oregon or Washington" kills it for me. : (

I go heavy on both, but only the 2% Cap One and 2.2% Barclay Arrival. I use for other travel expenses not covered by normal points/miles. I look at it as my other travel expenses cost me ~1/2 price w the GC fees.

Have any trouble getting it accepted places? I'm thinking of applying for it ...

So far have only tried to use it where they specifically indicate JCB is accepted and have had no problems. Have heard it may be possible where Discover is indicated but haven't tried. It has never failed to work at CVS. ;)

It should in theory work anywhere Discover is accepted in the USA, Canada or Caribbean but a few merchants haven't updated the POS.

For me this is here now - CB cards (Arrival, maybe NFCU and Flexperks) work at 2%. I find these useful for (a) air redemptions where the needed availability of a fixed program is not there and (b) hotel programs.

On the first point, fixed programs are still worth it for premium cabins on flights where I am planning well in advance and can find availability. Even after devaluations, I think the CPM is well above 2 cents here. Cash back cards simply can't compete in this area, unless you have a really good targeted offer or high churns. However, I find the lack of availability to be more and more of an issue. So I use the 2% type ones for other airfare - expensive domestic, international economy, or to cover fuel surcharges on award tickets.

On hotels, more power to you if you can get good value - I have a hard time with this. Given the huge devaluations at Hilton and others, I don't even bother with hotel points anymore. Other than burning through my remaining pile of HH points, I use CB's for hotels. It also allows me to cover non-chain hotels, which I generally prefer. Maybe I need to find more Hyatt's.

I guess in summary if you can consistently beat 2.2c, keep that up - you are coming out ahead. I find these opportunities there but more limited, so I do both.

CPM is pure opinion when it comes to a premium seat. I don't use the cash cost of a premium seat like the credit card bloggers do to inflate CPM. Instead, I use a number that I would be barely wiling to pay with cash. That number is often pretty close to the Y fare, like with domestic transcontinental. Those recliner seats are not worth more than a few extra bucks to me. Lie flats are nice, but not enough for me to pin a value of 3+ CPM. If I had a bad back, I would value it higher. But I don't, so I sit in the back of the bus.

On another note, I would not stop churning for an auto loan. Just make sure you pay off the CC balance prior to the statement cut date so the CR looks pretty. If it was a mortgage, I would agree to quit the game for a while.

True CPM value is one of the hardest things to calculate, as it's not just route specific, but airline, aircraft, etc specific too. I'm saving my miles and points right now for a trip that I would never be able to afford otherwise, which I think everyone should do at least once.

The problem is for some routes like LAX-SYD (where you want to be) in F/J points are the only feasible option, as CB cards would take WAY too long to get to the amount needed. But for hotels in some locations, CB is the way to go. Unfortunately my spending keeps me to one or the other, at least for now.

As for churning, there are only three cards I need or am interested in getting in the near term. Delta if there is a 50k offer, Freedom, hopefully while there is the $200 offer, as that 20k points will help for a trip I'm planning, and the Hyatt card, for the two free nights to use with the rest of my UR points to help with the Hyatt stay I want. The Freedom will probably happen in January, since Chase doesn't like me right now, and the Amex will probably happen in April when I cancel my BGR. The Hyatt will happen in another year or so.

Another factor to consider is what you already have accumulated.

I'm pretty points / miles heavy right now, so I'm switching over to primarily cash back via the Arrival card. I need to burn the miles I already have rather than accumulate more.