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Added October 30, 2012 from: Joe Taylor Jr.
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Answered By Joe Taylor Jr.:

From a strictly percentage-based basis, most airline credit cards typically offer much more valuable rewards than most cash back credit cards. However, to really unlock that value, you've got to maintain loyalty to a single airline and you've got to be flexible with how you redeem your rewards.

Let's say you fly for business once per month from Atlanta to Seattle. You'll earn 7,800 miles on your card from your airfare alone each year. Spend another $1,500 per month on the same card, and you've got enough miles to make your next flight free. That's $1,000 in savings on the card in just one year, not counting your signup bonus.

The same $21,900 in annual spending on a cash back credit card with a 2 percent rebate would net you just $438 in savings. Judging by the rebate alone, you're slightly better off with the cash back card. When you factor in those free bag checks, the airline credit card saves you the most money.

The math works out the same with most airline credit cards: the more you fly, the more you save. However, if you live in a highly competitive market served by rival carriers, pledging allegiance to a single brand might not always be the best deal. Your free travel comes at a price if you have to pay more to fly your preferred airline.

In that case, a flexible travel rewards card could offer the biggest bargains.

Of course, if you rarely fly, you won't trigger the multipliers and the bonus perks that make airline credit cards so valuable. Cash back credit cards might be the better solution for you, if that's the case. Always compare offers first to find the rewards credit card that gives you the biggest list of benefits for your current lifestyle and spending patterns.

This question is about:  Cashback Credit Cards
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