Credit Cards

Cashback vs Travel Cards

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  • Sep 16th, 2021 2:56 am
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[OP]
Jr. Member
Aug 7, 2012
135 posts
191 upvotes
Vancouver

Cashback vs Travel Cards

What are some pros and cons to some of these 2 cards?
With cashback you have to wait annually every time but for Travel cards do you have to redeem every year as well?
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Sr. Member
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Jul 20, 2017
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No. None of the travel cards I know of require you to redeem ever, in fact they prefer that you never do so the they can write off the points debt when you die/forget about em/close the account without redeeming.

They all never expire as long as the account remains in good standing.

Otherwise your questions is far too general to give a useful answer. You'll have to pick particular cards.

A general answer for cards like amex platinum or cobalt vs straight % cash back cards is that the obvious redemption for american express MR points - redeeming against travel you book yourself isn't enough to make them better than cash back cards alone usually. It's generally a 1 cpp (cent per point) afair. Where as if you transfer them to travel partners such as Aeroplan or Marriott, you can stretch those points which you'd otherwise only get 1 cent per point, up to 1.5cpp or 2+, or even in the very rare / complex case of getting them transferred to an airline with an expensive first class, over 10cpp. Not many good options for that exist in canada, but it is possible to also transfer your canadian membership rewards points to the US side, where they are plentiful options, if you also get a US amex that earns MR.

So yea with cash back, you can think about sign up bonuses worth $200, rarely $300-400. With points transferred to airlines and some good planning, people have gotten over $5,000 value on travel card sign up bonuses.

So yea, it's a far more challenging game ot play, but the rewards can be much sweeter.

that said, atm travel is all messed up and getting a good experience weather your points rich or not, is annoyingly frustrating.
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Jan 9, 2011
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Only some cash back cards make you wait a year for the payout. Amex SC and Scotia Momentum are two. Tangerine payout is monthly. Others (TD, Collabria) let you cash out anytime, usually a minimum amount. Brim lets you cash out any time with no minimum. So it varies.
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Feb 26, 2006
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Kiraly wrote: Only some cash back cards make you wait a year for the payout. Amex SC and Scotia Momentum are two. Tangerine payout is monthly. Others (TD, Collabria) let you cash out anytime, usually a minimum amount. Brim lets you cash out any time with no minimum. So it varies.
Annual cash out is a nice forced savings in my view
Jr. Member
Mar 25, 2015
136 posts
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Kiraly wrote: Others (TD, Collabria) let you cash out anytime, usually a minimum amount.
CIBC in same bucket with 25$ minimum, but can be redeemed immediately if product switching to non-cashback card. (not sure if offered always?)
Eleventeen wrote: They all never expire as long as the account remains in good standing.
It is correct for classic monthly cashback programs, but for point programs its not always correct. Aeroplan is being an exception as they specifically give perk of permanent points, but some programs like RBC Rewards points - they have straight expiration time of 3 whatever years, after which they will just poof. I wont be surprised if Scene, MR, MBNA, HSBC, Airmiles or any other programs have direct expiration timelines hidden deep in agreements. They're typically not permanent, and I wouldn't recommend to assume that by default.
Eleventeen wrote: that said, atm travel is all messed up and getting a good experience weather your points rich or not, is annoyingly frustrating.
Point game was never simple even before pandemic, so its subjective. The fact is that it does take solid time to learn on this, and its not for everyone (one of the reasons I don't)
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Aug 1, 2008
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BMO is 1$ mininum
Brim as no minimum
MBNA is 1200 pts for 50$ mininum
I feel the need... the need for speed.
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Jul 20, 2017
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dimon222 wrote: It is correct for classic monthly cashback programs, but for point programs its not always correct. Aeroplan is being an exception as they specifically give perk of permanent points, but some programs like RBC Rewards points - they have straight expiration time of 3 whatever years, after which they will just poof. I wont be surprised if Scene, MR, MBNA, HSBC, Airmiles or any other programs have direct expiration timelines hidden deep in agreements. They're typically not permanent, and I wouldn't recommend to assume that by default.
RBC are a bunch of crooks, everyone knows that. I have gotten 50+ credit cards, one from almost every major bank but purposely never RBC for many reasons. They exist to screw over their customers as hard as possible and hide the evidence.

Aside from them, I know for a fact every point currency you named does not expire if the account is active (At worst "active" means you need to earn or redeem a point every year).

Lots of them tried, air miles for example made a big effort to expire peoples points, but the people complained and thus the canadian standard for any serious point currency is they never expire if the account is active.

Same goes for every airline currency in north america. There are a handful of non NA ones that still use some archaic rules and thus do expire, but no decent canadian company issues cards related to them.
The one semi exception to that is Cathay pacific asia miles, who did indeed expire miles on active accounts up until Jan 1, 2020.. they have changed these policy to match/exceed the good standard now (miles never expire as long as activity within 18 months), but not retroactively. Likewise the related credit card never solved this either unlike most.. Guess who issues there card.. RBC.

For currencies which do expire, I track them on awardwallet.com , it's great for that. Or if you have multiple accounts and thus may forget to use a particular account for a whole year.
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Jan 4, 2011
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dimon222 wrote: [snip]

...some programs like RBC Rewards points - they have straight expiration time of 3 whatever years, after which they will just poof. I wont be surprised if Scene, MR, MBNA, HSBC, Airmiles or any other programs have direct expiration timelines hidden deep in agreements. They're typically not permanent, and I wouldn't recommend to assume that by default.
Do you have a source for RBC Rewards expiry? I have held RBC Rewards points for longer than three years and they haven't expired. As far as I know, RBC Rewards do NOT expire as long as you hold an RBC Rewards earning credit card. The exception is RBC Rewards held at RBC Bank (in the U.S., as opposed to RBC Royal Bank in Canada). RBC Rewards held at RBC Bank do expire. But I don't think the conversation was about the U.S.

Similarly, Scene, HSBC, and Air Miles do not expire.
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Dec 2, 2002
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Generally the more difficult and complicated it is to use award points the more valuable they are. You could easily exchange aeroplan, avion, or MR points for a gift card and get a return of half a penny for every dollar spent. Or use those same points on a middle eastern carrier to fly first class and get a value of over 10 cents per dollar spent. The latter would take some work to find availability and legwork to book.

Right now, since travel isn’t the best experience and cash is king in the current economy. I’d recommend getting a cash back card that matches your spending habits until travel isn’t as painful as it is now.
Newbie
Mar 1, 2019
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BMO Rewards points can be redeemed for "investments" once you've accumulated 15,000 BMO points, but what "investments" really means is just getting some money into a BMO savings account. So BMO points can be converted to cash at the same value they could be used for booking travel through their site. I'm not sure how many other points programs also allow this.

Brim is one, but they make cashing out the points so easy people talk about it as if it's just a cashback card.
Deal Guru
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Jan 9, 2011
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Kenneth wrote: Or use those same points on a middle eastern carrier to fly first class and get a value of over 10 cents per dollar spent.
I disagree with those valuations on business and first class flights. They aren't based on what somebody would be willing to pay for an upgrade from coach to first class, they're based on what the insane cash price is that nobody would ever pay. Ignore the cash price and ask yourself what a business class upgrade is worth to you. Example: A flight to Europe I was looking at recently was 80,000 points for coach ($1,300 cash) or 140,000 points for business class ($5,300 cash.) It's really easy to just look at the cash valuations (1.6¢/pt vs 3.8¢/pt) and think that business class is better value. But for me, I'd pay for an upgrade to business class about the same as what I'd pay to visit the airport lounge. Definitely not $4,000. Maybe $100, $150 tops. So this "better value" business class redemption means I'm using an extra 60,000 points, worth probably $900 if I instead saved them to use on another flight. Yeah no thanks. Even if that $900 upgrade included a BJ from the flight attendant of my choice I still wouldn't do it.

I get that there are people who find what they get on first and business class to be worth every penny of the extra tens of thousands of points they have to hand over. Good for them, whatever floats their boat. But not me, I consider it a scam trying to woo me with cheap trinkets and Canadian Tire pricing to cheat me out of massive amounts of points. Not biting.
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Nov 13, 2010
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Always the no-free cashback cards....

Can't ever justify paying annual fee for some travel card, as we fly long-haul, those cards are pretty useless for us economy pax.
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Kiraly wrote: I disagree with those valuations on business and first class flights. They aren't based on what somebody would be willing to pay for an upgrade from coach to first class, they're based on what the insane cash price is that nobody would ever pay. Ignore the cash price and ask yourself what a business class upgrade is worth to you. Example: A flight to Europe I was looking at recently was 80,000 points for coach ($1,300 cash) or 140,000 points for business class ($5,300 cash.) It's really easy to just look at the cash valuations (1.6¢/pt vs 3.8¢/pt) and think that business class is better value. But for me, I'd pay for an upgrade to business class about the same as what I'd pay to visit the airport lounge. Definitely not $4,000.

I get that there are people who find what they get on first and business class to be worth every penny of the extra tens of thousands of points they have to hand over. Good for them, whatever floats their boat. But not me, I consider it a scam trying to woo me with cheap trinkets and Canadian Tire pricing to cheat me out of massive amounts of points. Not biting.
Maybe I’m just getting old but I try to not to fly economy if the flight is over two hours (points or cash), but to each there own. I agree on the exaggeration of value though, some bloggers rave about there $30,000 flight that has half a dozen connections and booked last minute which no one in there right mind would do.

But for your $1,300 flight for 80,000 miles, assuming you had to earn those points (no signup bonus) and most of your spending is at the 1x categories you would have to spend $80,000 to get that ticket. If you had a SCP with its 2% cash back you could get the ticket with only $65,000 spending.
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Kenneth wrote: Maybe I’m just getting old but I try to not to fly economy if the flight is over two hours (points or cash), but to each there own. I agree on the exaggeration of value though, some bloggers rave about there $30,000 flight that has half a dozen connections and booked last minute which no one in there right mind would do.

But for your $1,300 flight for 80,000 miles, assuming you had to earn those points (no signup bonus) and most of your spending is at the 1x categories you would have to spend $80,000 to get that ticket. If you had a SCP with its 2% cash back you could get the ticket with only $65,000 spending.
Excellent points.
As for earning points through spending, that will never catch up with what can be earned through welcome bonuses when applying for new cards. And travel points cards almost always have the edge there. I got CIBC Aeroplan Visa Infinite a few months ago. First year free, and $1,500 spending to earn 51,500 Aeroplan points worth at least $750. I've never seen a cash back card's welcome bonus come close.
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apnayloags wrote: Always the no-free cashback cards....

Can't ever justify paying annual fee for some travel card, as we fly long-haul, those cards are pretty useless for us economy pax.
I'm guessing you mean no-fee. Don't dismiss credit cards just because they have annual fees. I too chose only no-fee cards until one day I sat down with a calculator and learned that saving the $99 annual fee meant I was missing out on not only more than $400 in extra cash back I could have been earning, but also on the included travel insurance that I had until then been paying out-of-pocket for. I now consider the annual fee on my Meridian Visa Infinite one of the best $99 I spend all year.
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Travel seems to be all pre-pandemic for us. We collected points, but didn't use them for travel. Whenever we flew across the Pacific or Atlantic it was premium economy and we paid out of pocket for our own tickets. No cross Canada trips anymore. With this seemingly never ending virus that's all ended.

Used to have a Scotiabank American Express Gold card and a TD Aeroplan Visa Infinite, but both long gone now. I don't miss either, to be honest with you.

We're not big monthly spenders on credit cards, so a Tangerine, MBNA Smart Cash Visa, and a couple of free BMO Air Miles Mastercards are all good enough. My original BMO card goes way back to the 80's when we needed one for the occasional rental car for vacation.

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