Cash or Miles? & Up in the Air

I am sitting at the Burbank, Ca. airport right now waiting for my flight to Portland. Today I want to write a quick blog about miles versus cash.  As mentioned in the July 2nd blog, before any internet purchase I log into Evreward and see what is the point versus cash value.  There is a new site that I had not mentioned previously, Top Cash Back.  I love this site for Groupons ( a deal of the day website that features discounts at local establishments).  Top Cash Back give you 15.5% cash back for purchases at Groupon versus other reward sites (e.g. Ebates), which gives you  2 airline miles per dollar spent.  But what is best, miles or points? Anyone who claims to answer this question for you, without customizing the answer to your specific styles and goals, is probably giving you bad advice.  Some things you need to consider are, if you get cash back do you put it in your "travel fund" for use at a later date?  Do you need miles to "top off" an account to earn a free airline ticket?  Do you need miles to keep an account alive?  

Hypothetically, if I spent $2,000 on Groupons I would get $310 (15.5%) in cash back from Topcashback.  This could be enough to get a free airline ticket.  If I chose airline miles I would get 4000 airline miles (2 miles per dollar spent).  Since the great majority of airline miles are used for domestic coach award tickets, priced at 25,000 miles in most programs, a rule-of-thumb baseline for the value of a frequent flyer mile is the average price of a paid coach ticket (around $350 currently) divided by the required miles, giving us a nominal value of 1.4 cents each (Don't worry you don't need to be a math wizard). With the hypothetical $2000 spent at the Groupon site that equates to $56.00 worth of airline miles.  Knowing the average award ticket is 25,000 miles, the 4000 airline miles from the Groupon purchase is approximately 1/6 ticket.  In the above scenario $310 cash is definitely better than $56 dollars worth of airline miles.


You may be thinking why then would I ever take miles versus cash? For anyone who has had to travel at the last minute due to an emergency you know the price of tickets in itself could cause an emergency.  These are the type of trips I like to use my award tickets on.  Remember two weeks before flights is when award tickets open up on undersold flights.  Two weeks before the flight is also when prices tend to be highest.  Also, 15.5% return for Groupon is at the high end.  Most cash back rebates are in the 1-3% range.  Hope this short tutorial gets you  thinking about your options.

Finally, I want to show you how yesterday I earned cash back on a recent Groupon purchase (no I didn't take the miles).

Using a jet pack to propel myself around Newport Beach, California (company: Jetlevsouthwest)

See my entire flight by checking out my the Youtube video.  If you are in the Newport Beach Area of California area and think this looks like fun call JetLev at 888-553-6471 and tell them you were referred by "Traveling for Less" you will receive a $25 discount.