Why Cash Back Cards Are Always A Bad Idea For Road Warriors

Cash back cards are designed to keep things easy and simple. 

Reward points cards are great but frankly, for a busy road warrior, figuring out the points is often not worth the time you invest in them. Besides, many travelers earn so many miles and hotel points that they aren’t always able to use them anyways.

Hence, using cash rewards seems like a no brainer. You get a guaranteed money-back of around 2% on everything you spend―with the ease of nothing to keep track of, no fear that points will expire, and no need to spend hours researching how to redeem rewards.  

Cash back cards seem like the easiest solution. The question is…  

“Which cash back card should I get?”  

The answer is you don’t opt for a cash-back card. The cards offering the most lucrative cash back options are not marketed as “cash-back” cards at all. In fact, they are luxury rewards cards, which you can almost instantly convert to cash at a penny-per-point basis with much better ratios than the cards that market themselves as cash-back. 

Citi Prestige or Chase Sapphire Reserve are the best 2 options

For road warriors who fly a lot, the Citi Prestige offers the best value right now.  The card provides a 5% cashback on all ticket purchases made through any airline’s online site or travel agency. So for every purchase you make through Expedia, Orbitz, Travelocity, booking.com, and others, you get 5% back. 

Similarly, the Citi Prestige also offers a 5% back on dining, whether it be McDonald’s, a 3-star Michelin Star restaurant, or anything in between. You could also get a 3% back on any hotels (or cruises, if you buy any) but if you book and prepay your hotels, car rentals, or other services through an online travel agency (Expedia, Orbitz, Travelocity, booking.com, etc.), you get a 5% back. 

Not just that! 

You also get the extensive benefits of most premium cards such as lounge access, extended warranty on everything you buy, purchase protection, and access to the company’s concierge. 

If you find yourself looking for these rewards, the Citi Prestige has a dozen transfer partners to choose from in major global alliances such as the newcomer airlines from the Gulf (Emirates, Qatar, and Etihad) and major IHG hotel programs. It's like having the ability to buy miles from these airlines at a penny-per-mile! 

The Citi Prestige card comes at a USD 495 annual membership fee, but there’s a USD 250 credit applied to your card after your first airline ticket purchase, as well as a 4-night free hotel stay that you can avail twice a year.

If airline tickets are not a big part of your expenses and you prefer to book your cars and hotels directly through different online sites, the Chase Sapphire Reserve may be a better choice for you. 

This card offers 3% cashback points on everything you spend on airline tickets, hotels, car rentals, Uber/Lyft, trains, other public transportation, as well as dining. 

Unlike the Citi Prestige, the Chase Sapphire Reserve gives a 50% bonus when you redeem points through the Chase Travel Center or online portal. 

The good thing about this card? 

There are no service fees! 

Sometimes, the company adds categories for the 50% bonus redemptions like grocery stores. This represents a 4.5% return on your “travel spend dollars.” 

The Chase Sapphire Reserve card comes with a USD 550 annual fee, but USD 300 is rebated to you for any travel spending. You also get a Lyft Pink membership that offers a 15% discount on Lyft rides, as well as a USD 120 credit on annual Peloton memberships. 

Like Citi, Chase offers the same benefits on lounge memberships, purchase protection, and extended warranty on purchases. 

Chase’s customer service and website user experience is better than that of Citi.

Another card that always comes up as a contender when discussing Citi Prestige and Chase Sapphire Reserve is the American Express Personal Platinum. 

The AmEx Platinum is usually best for travelers who purchase a lot of airline tickets and also book and prepay their hotels amex travel website.

This card is also a good option for those who want to have an opportunity to visit the American Express Centurion lounges in cities like Houston, Dallas, and Hong Kong, as well as frequent flyers who want to visit the Delta Sky Clubs when they fly through Delta Airlines. 

The AmEx Platinum is beneficial for anyone who uses Uber a lot because the card allows users to secure up to USD 200 in Uber credits per year. 

However, in the context of cashback, AmEx Personаl Platinum falls short since it only gives two-thirds of a penny-per-point back. While the card may offer many benefits such as store credits and Uber benefits, it is not a good alternative for someone looking for the simplicity of a cashback card.