For most, cash-back cards are bet­ter than air­line miles

Lodi News-Sentinel - - PANORAMA:WEEKENDER - By Ge­orge Ho­bica

If you use an air­line credit card, such as the Amer­i­can Air­lines Aad­van­tage Master­Card, might I sug­gest a cash­back card in­stead? Air­line cards award one mile or point per dol­lar you spend, and that’s great if you’re a big spender: af­ter charg­ing $25,000 you might earn enough miles for a free round-trip do­mes­tic flight. But most peo­ple don’t charge enough, or quickly enough, to earn a flight award, and those tick­ets come with un­pleas­ant re­stric­tions and fees that most peo­ple only learn about when it’s too late.

The best cash-back cards, in con­trast, re­fund 2% on ev­ery­thing you buy with them, so even if you spend $12,000 you’ll get back $240, or enough for a free non­stop flight from L.A. to New York when there’s a fare sale. Even bet­ter, some of these cards of­fer cash sign-up bonuses, and, un­like air­line-af­fil­i­ated cards, all of which have hefty an­nual fees, most cash-back cards have none.

But the big­gest rea­son to switch to cash-back might be all the rules you un­wit­tingly agree to abide by, and fees you agree to pay, when you join a fre­quent­flyer pro­gram.

Not all pro­grams are alike, but con­sider some of their li­a­bil­i­ties when com­pared to cash: miles may ex­pire if there’s no ac­tiv­ity in your ac­count, while cash may be spent un­til it’s gone; miles may be sub­ject to ca­pac­ity con­trols, while cash can be splurged on any flight with an empty seat; and miles may be de­val­ued when­ever the air­line in­creases, on a whim, the num­ber needed to fly “free,” while cash is sub­ject only to in­fla­tion, lately around 2 per­cent.

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