Major purchase on credit card - do I want miles or cash back?

Parent Cafe
1

<p>So I will be making several purchases soon that will total about $8,000. I am trying to figure out which credit card I should charge these purchases to. (We do have the money in our savings account to pay off the balance in full, when we get the statement.) </p>

<p>I am deciding between the Capital One Mastercard - which offers one percent cash back plus a 50 percent bonus - and the Delta American Express - which offers one mile for every dollar. </p>

<p>The tricky part is figuring out how much miles on Delta are worth. D does fly Delta to and from college; the tickets are usually about $400 or 37,500 miles (every now and then I can get a ticket for 25,000 miles but usually those dates/times don’t work).</p>

<p>ANy thoughts about which card I should use? To me, it seems pretty much a wash, but maybe I am missing soemthing.</p>

2

<p>It is pretty easy. You need to spend $37,500 to collect $400 in Tickets. Cap1 card gives you 1.5%. For $37,500 you will get a kick back of $562.5.</p>

<p>On the other hand if you can get ticket for 25,000 miles or $25,000 spend, your Cap1 card gives you $375 in kickback.</p>

<p>If it was me, I would go with Cap1.</p>

3

<p>Check the small print on the cash back - a lot of them have a maximum, which we found to our chagrin. Discover for example caps out at $800 of charges to calculate the cash back. So you would not get the benefit of the $8000 charge.</p>

4

<p>In our family, we use cards for almost every purchase. One person uses the cash back card and the spouse uses the airline card. Exception is the mileage person uses a cash back card for 5% back on gas purchases (AAA).
The mileage plan we like is Alaska Airlines, which can go cross country for 12,500 miles. Or you can use some miles, some cash. Bonus offers for sign up.
The cash back card spouse uses is Chase, which gives 1% back always, 5% cash back on airline tickets, groceries, gas etc on a quarterly rotating basis. Sign up bonus. No maximum. (Another family member uses Citi cash back card which also has no maximum.)
I’ve seen other offers, probably better, but changing credit cards is no fun. We’ve been able to stay in the air (college across the country) and enjoyed rebate cash with our particular mix of cards.
Have you done a search of cash back credit card offers? (I think Money magazine or others may have a spread sheet for comparison.)
Depending on your flight location needs, compare the different airline mileage plans and do a search on customer feedback. They vary. And who knows, some day you might want to travel outside the U.S. on airline miles, so the partner airlines might be important.</p>

5

<p>I put absolutely everything on a credit card that gives me miles. I would have put my kids’ tuition on there if there hadn’t been an upcharge of 3.5% which made it not worth it.</p>

6

<p>Go for cash back. I had a Delta AmEx and racked up 200k+ miles and have yet to book a ticket with it, however I have tried many times. Seats on the flights I wanted were not available. </p>

<p>A rule of thumb for airmiles is they are worth 1.5 cents, so you should calculate the price of the ticket and only use miles if it’s cheaper. I figure I will blow my Delta account (I have 500k+) on a big international family vacation when I can be flexible with travel dates.</p>

<p>My favorite cash back card is the Costco AmEx. There’s no annual fee to Costco members and you get 2-3% back on all Costco charges, including gas, and 1-2% on other charges.</p>

7

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<p>So each mile is worth $0.011 to $0.016, but only for use in buying Delta Airlines flights when there are award seats available.</p>

<p>Does not seem especially attractive compared to $0.01 to $0.015 in cash.</p>

8

<p>I gave up on all my milage accounts, as I can’t make the reservation I wanted when I wanted. My UA milage were all expired, the last time I tried, you need double miles to go from SF to Denver and its just not worth my efforts. Besides, they used to let you change flights, not any more, yo have to pay to change or to cancel.</p>

<p>I’ll take the cash and run.</p>

9

<p>go with the cash back! most of the airlines charge you 75$ booking fee to use your frequent flier miles, plus 10$ security charge.</p>

10

<p>Cash back. Who knows what the rules will be when you want to use the miles.</p>

11

<p>You don’t have to arrange flights through CapitalOne. After you purchase your tickets on any website, you apply for the rebate on the CapitalOne Rewards site. It’s easy. I have a Platinum card that gives me two miles for every dollar. $30,000 of purchases (60,000 miles) gets me a $600 ticket. We do the same thing as Birch’s family. We have always paid it off every month, so CapitalOne doesn’t make much on us.</p>

<p>I can also get cash back on the card, but that’s only a 1% return, so it’s not as good.</p>

12

<p>Since you have the money, ask for a 5% discount for paying cash. Or at least 3%.</p>

13

<p>We went to Costco Amex for business. Lots of my suppliers take it so my cash back averages about 1200 per year. capital one visa for business where Amex isn’t taken or for foreign travel. I am about to give up my American airlines card I have had since 1992. It is just too hard to use the miles and I would rather fly Southwest. Have a Capital one cash back for personal and just added a Marriott card in place of the American Airlines card.</p>