If you’re still using a cash back credit card and you want to travel,
you are wasting your hard earned money.
This is proof of why travel points are way,
way, way more valuable than redeeming them for cash back.
In my previous video
I just showed how you can book a 6 thousand dollar round trip
business class flight using Amex points
for just 60 thousand in each direction.
If I wanted to redeem 120,000 points for cash back with Amex,
they’re only gonna give me 720 dollars.
The second option to redeem this is through Amex Travel
and we can see they’re charging 55,480 points
for this round trip ticket.
That’s about fifty five hundred dollars.
This is equivalent to getting one cent per point,
which is the same rate that you get for cash back
with a cash back card. You’re getting one cent per point,
but when you have travel points
that you can actually transfer those out to different airlines
to get better deals.
So we can see this exact same ticket on British Airways website,
it’s 77,250 points plus $232 each direction.
Now there’s a transfer bonus going on from Amex to British Airways,
so you really only need 60,000 points.
Let’s do the math to compare apples to apples.
How many cents per point we’re getting with this redemption?
So we use our starting value here
5,559
and we wanna subtract the taxes because that’s coming out of our price.
So it’s gonna Be minus 2 32 for one direction,
minus 2 32 for the other. This gives us the cash price we’re looking at.
Now we divide this by how many points we need.
We’re looking at this round trip.
So 120,000 points.
That gives us a value of basically just over ￠4 per point.
So what does this mean?
Let’s say you had 10,000 points being evaluated at point
at ￠4 per point. That would give you $400.
Versus if this was cash back,
you would get $100. But basically,
you can get double, triple,
quadruple the value using travel points versus cash back.
Obviously, some people don’t care about travel.
Then cash back could be great for you.
But if you are trying to redeem your points for travel rewards,
stop getting cash back cards.
So many of you will say, I only want a card that has no fee.
But most of the no fee cards,
you can’t transfer points out in this way
where you’re getting maximum value.
So it is so, so,
so worth it to pay the 95 bucks
or whatever the low fee is to be able to redeem your points this way.