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4 Reasons you Should Never Pay Cash for Travel!
There is a saying a sucker is born every day. While that is true it may be a little harsh for this instance. But I do believe that cash should (almost) never be used to book travel. I know that this may not be a popular sentiment with everyone’s point valuations and what not. I think with proper diversification you should rarely have the need to pay with cash.
Shawn did a nice piece a while back discussing why you should never pay with cash for anything. It is definitely worth a read and it ties in nicely with this piece.
4 Reasons to Book Travel with Points
Points are Constantly Decreasing in Value
Rarely do you see an article coming out where a rewards program is becoming more valuable. Wyndham Rewards may be one of the few examples of this happening recently. For the most part the longer you hold onto your miles or points the more likely you are to have it lose value.
Why hoard these miles and points waiting for the perfect redemption when they could be worth significantly less tomorrow? By the time you are ready to pull the trigger the redemption may not even be available any longer. We are no strangers to great redemptions disappearing during the middle of the night!
Make Your Money Work for You!
There is a very well known saying – make your money work for you. It means that you should invest and save your money and let it gain value while you sit back and do nothing.
This goes hand in hand with number one on the list. While miles and points almost never increase in value, money can. If you invest the money you would have spent on travel it can turn into more money. That is a beautiful thing!
Think of all of the people Wall Street that are paid huge salaries, what do they really do? They take $1 and pump it up and make it worth $2. They don’t create anything or provide any service to make lives better etc. they turn money into more money! You just can’t do that with points. There are no dividend paying point currencies that I know of.
Miles and Points are Easier to Accrue
Cash sign up bonuses are available and some are for a nice chunk of change…like the Bank of America Premium Rewards card’s $500 bonus. Even with a few good ones out there cash bonuses are less abundant than points and miles bonuses and they are usually for smaller amounts.
$500 cash bonuses are about as good as it gets, besides that $1000 offer from Capital One. Travel rewards credit cards offer multiple sign up bonuses for more than 50,000 miles or points. American Express has several themselves and they are only one credit card provider.
Needless to say there are countless large miles and points bonuses on the market. They are more plentiful and they are offered by more banks than cash bonuses are. Since they are more plentiful, and have larger bonuses, that makes them easier to accrue and replace than cash.
Flexible Points Make Bad Redemptions Impossible
The increase of flexible points currencies on the market makes bad redemptions a thing of the past. Add in travel purchase eraser cards, like the Capital One Venture card, and you can handle all types of travel costs. With those two options you should never be stuck redeeming points at a bad value.
If that $200 Hyatt hotel is asking for 15,000 points then book it through the Ultimate rewards portal instead for 13,333 using the Chase Sapphire Reserve card. If the Delta flight you want is only $250 but they want 20,000 Delta Skymiles use your American Express Business Platinum cards points option for 18,518 Membership Reward points instead of transferring 20,000 of them to Delta Skymiles. Say the hotel you have your eye on is an independent hotel, you can book it through the ThankYou portal with you Citi Premier card at 1.25 cents per point.
I think you get the idea. If you are diversified enough then you can use points for almost any redemption. The one lone exception is Airbnb (which you can use a Barclay Arrival+ or a Capital One card for).
You should be able to get at least 1.25 cents for every redemption out there when using flexible points. That is worth more than the 1 cent per point value that most offer for cash redemptions, if they offer that option at all.
I am a person who always uses points to book my travel. I use miles, points, bank portals, flexible points, and travel eraser credit cards to make that possible. Like they say CASH IS KING.
I can’t use miles and points to pay for my kids college. I can use them to save the money I would have spent on travel. That allows me to invest or save the money I would have otherwise spent, and lets my money go to work for me!
What do you think? Are there times when cash should be used or do you think there is a point that will fill any need?
Miles to Memories has partnered with CardRatings for our coverage of credit card products. Miles to Memories and CardRatings may receive a commission from card issuers.