• Aditya Bagaria

Points or cashback?


This is a double-edged sword. It truly depends on what your needs are. For example, a business might choose to go with cashback rather than frequent-flier rewards because high spending levels can generate enough rewards to reinvest it back in the business. For instance, if we take a medium-sized business with about $2,400,000 spent in one year for goods, then using the right credit card mix, the business could earn about $63,000 back. That’s a huge sum of money for any business – big or small. As the saying goes: cash is king! The money can be used for employee bonuses, equipment, or big purchases.

When considering cashback, it also depends on the type of spending your needs allow. Are you a family spending on household expenses? Or business spending on merchandise and material? For smaller spend amounts, appoints a credit-card may bring more value when you book your next vacation (especially during the holidays!).


When considering points, ALWAYS choose transferrable points. Always. There is one simple reason: flexibility. You are not tied to any specific airline or alliance. You can choose how to use the points: cash, hotel stays, or free flights. While cashback is a set rate of return, points can be redeemed in much higher values. For example, you could redeem for Cathay Pacific First Class (one ticket, one-way) from San Francisco to Hong Kong for 70,000 Alaska Airlines miles. With the credit-card bonus from the Alaska MileagePlan Credit Card and regular spending, this is easily achievable for a normal middle-class family like you and me.

Bottom line:

It truly depends on what your needs are. If you are a business, I would suggest going for a cashback card due to the ability to reinvest the rewards. If you are a family, either route is OK, but I would suggest going for a points-earning card because of the flexibility. Most likely, you will spend more on travel than your earned cashback will support. A points credit-card will likely make the travel free. In future posts, I will go over the best credit cards for either situation!