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With airline cards typically offering one mile for every dollar charged, it would take $25,000 to earn enough miles for a free flight. With a 2
percent cash back card, that same amount of spending would earn a $500 rebate, enough to purchase most domestic flights and without any of the hassles of trying to redeem miles. Additionally, you will be able to earn miles for the flight. (Reward tickets don't earn miles.) "Cash trumps free anything because you can do anything with it," says Tim Winship, publisher of FrequentFlier.com, an advice site for travelers. So instead of saving miles for that dream Hawaiian vacation, just get enough cash back to pay for it yourself. IS LOYALTY WORTH IT? Winship says there has been a gradual erosion of the value of these miles and points and that award ticket availability is getting harder to find. "I'm not saying loyalty programs are worthless. I'm saying they are worth less today than they were five years ago and will be worth less in five years," Winship says. Many of the hotel and airline cards also come with hefty annual fees, typically ranging from $50 to $100 but sometimes as high as $450. Those fees are only worth paying if you are charging a few thousand dollars each month. There is one exception: some hotel cards, such as the ones for Hyatt, Marriott and InterContinental Hotels
-- which includes Holiday Inn -- come with a free night at certain level hotels each year. The cost of the annual fee is often less than one night's hotel bill. Hotel points are also typically easier to redeem than airline miles. But be warned: all of these cards often charge with higher interest rates
-- some as high as 24.99 percent -- and are best only for those who pay off their monthly bills in full. "These cards are definitely not the way to go," Winship says, "if keeping your head above water is your first priority."
[Associated
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