A 2 Percent Cash Back Credit Card Alone Will Not Get You Free Travel

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A 2% Cash Back Credit Card Alone Will Not Get You Free Travel. See video below for more details.

If you are hoping that 2% cash back credit card will be your gateway to get free ????travel, you guessed wrong. Here’s ⬇️ why that 2% cash back credit card will not get you very far.

SAVE ????this post, as an example of why you might actually be paying more for travel with a 2% cash back credit card.

For example, if you spend $1,000 a month on groceries ????and takeout/dining at restaurants that is $12,000 a year. If you use a credit card, such as Amex Gold ($250 annual fee) that has 4x on these categories, (U.S. restaurants and restaurants) you will end up with 48,000 points in a year. You will also get credits that you can use for takeout. Thus, you will get a $120 credit for Uber/Eats, and $120 credit for Seamless, so the net cost of your credit card is $10 ($250 annual fee – $120 Uber – $120 Seamless).

Just for perspective Avianca (1:1 transfer partner on American Express) United domestic flights one way start at 7,500 points + taxes. Thus, you can essentially use your 48,000 points for 3 round trip flights, and pay for taxes. Amex is also known to have transfer bonuses on Avianca (such as, the current 15% transfer bonus), so you will actually be saving on points when you transfer them to Avianca. Taxes on Avianca usually start at $15.60 each way.

If you used a 2% credit card for your ????groceries, such as Citi Double Cash you will end up with 24,000 points in a year. If you do not have a travel credit card like Citi Premier or Citi Prestige, you cannot transfer your points to any travel transfer partners. Thus, this will be only in $240 in statement credit.

On a recent trip to New York to Savannah, I booked my flight a few days before departure. The cash price for the basic economy flight was $199 + $25 carry on fee ($224). Since I booked an award flight, my flight was only 7,500 points + $15.60 in taxes. I had a free carry on because I booked an award flight, so I saved $25.

Would you rather pay $15.60+ in taxes and have 3 round trip flights✈️ with points ? Or would you rather have only 1 free round trip flights with your credit card? Let me know your thoughts in the comments and feel free send this post to a friend if you find this helpful!

@pennywisetraveler

Most 2% #cashback #creditcards cannot transfer to travel partners. Portal/transfer partner redemptions start at 1.25% vs 1% for statement credit. #glt

♬ Money In The Grave – Drake

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