🤔 Why earn points instead of cash back?

Estimated read time: 4 minutes and 52 seconds

☀️ Good morning and welcome back to Daily Drop — the newsletter that thinks “dynamic pricing” should be punishable by international law.

We’ve got a fun one for you today:

• 🤔 Why earn points instead of cash back?

• 💔 JetBlue severs an airline partnership

• 🌎 Babbel’s best deal of the year!

• ✈️ Travel Trivia Reveal

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🤔 Why earn points instead of cash back?

Cash back is simple: You spend money, you get some of it back. These days, you can find plenty of no-fee cards that earn 2% cash back on everything. So why would anyone choose to earn points instead?

Because if you travel — even just once or twice a year — transferable points can unlock way more value than cash ever could.

Let’s say you spend $6,000 a year on a card like the [[ chase-sapphire-reserve.name ]], and earn just 1 point per dollar. That’s a low estimate, considering the card also earns:

• 8x on travel booked through Chase Travel^SM

• 4x on flights and hotels booked directly

• 3x on dining worldwide

…but we’ll keep it conservative and stick to 1x across the board, for now.

That $6,000 in spend earns you 6,000 Chase points.

Now imagine you transfer those points to Virgin Atlantic and use them to book a one-way flight in economy from the U.S. to Europe for 6,000 points + $109 in taxes/fees.

That same flight costs $318 in cash, meaning you’re getting $209 in value from those 6,000 points — or 3.5 cents per point.

With 2% cash back, that same spend would earn you just $120.

That’s 74% more value — even before factoring in the [[ chase-sapphire-reserve.casual-card-name ]]’s current welcome offer.

Afraid of high annual fees?

Fair. But for starters, the same example also works with the [[ chase-sapphire-preferred-card.name ]], which only has a $95 annual fee.

But there’s another option that’s even simpler…

The [[ capital-one-venture-rewards-credit-card.name ]] (which also has a $95 annual fee) earns 2x miles on everything with no need to track bonus categories — just flat, fuss-free rewards.

Let’s say you spend $22,500 in a year on all of your expenses together, and put them on a 2% cash-back card. You’d walk away with $450 at the end of the year — not a bad haul.

Instead, you could put that spend on the [[ capital-one-venture-rewards-credit-card.casual-card-name ]] and earn 45,000 Capital One miles, which you could transfer to Flying Blue and book this Air France business-class flight to Paris (CDG):

Cash price for that same flight? Over $4,200.

Even after subtracting the annual fee and paying taxes/fees on the flight, you’re STILL getting nearly 10x more value than if you earned straight cash back.

That’s not an exaggeration — that’s math. 🤷🏼‍♂️

Look, we get it — cash is flexible. But if you even occasionally book travel, points are powerful — and the difference in value can be huge.

The [[ chase-sapphire-reserve.casual-card-name ]] and [[ capital-one-venture-rewards-credit-card.casual-card-name ]] are just two of many that earn transferable points, so check out these lists to find a card that works for you:

• 👉 Explore cards that earn Chase points

• 👉 Explore cards that earn Capital One miles

• 👉 Explore cards that earn MR points

• 👉 Explore cards that earn ThankYou points

💔 JetBlue severs an airline partnership

Well, that was fast. JetBlue’s shiny new partnership with TAP Portugal — the one that let you earn and redeem points across the Atlantic — is officially getting the axe on September 30.

The partnership launched barely six months ago with eye-popping deals: think 19,000 points from the East Coast or West Coast to Portugal in economy or 59,000 points in business class.

Naturally, JetBlue pulled a “JetBlue” and devalued it within weeks, doubling some of those rates (I got the screenshot above when the partnership first launched).

And now, just like that, it’ll be over.

Here’s what the math looks like now:

To be honest, availability is already virtually nonexistent for TAP flights booked through JetBlue.

But here’s why that’s okay:

A nonstop TAP flight from the East Coast to Lisbon (LIS) could theoretically cost as few as 19,000 points. But lately, they’ve been closer to 40,000 JetBlue points in economy or 80,000 in business class.

Compare that to Aeroplan, which charges 35,000 points in economy or 60,000 in business class for the exact same nonstop TAP flight.

Oh, and Avianca LifeMiles undercuts both by charging just 32,500 miles in economy — with minimal taxes and fees.👇

Add in the fact that most banks don’t even transfer to JetBlue at a 1:1 ratio (while they do to Aeroplan and LifeMiles), and… yeah.

Bottom line: if you’ve got JetBlue points lying around and spot TAP availability before September 30, go ahead and lock it in — it’s not terrible.

If you’re VERY lucky, you might even see one of those 19,000-point awards pop up, too.

But for most people, your JetBlue points will stretch further elsewhere, such as:

• New JetBlue/Condor partnership

• Domestic U.S. flights

• International jaunts to Central America and the Caribbean

So, not exactly the end of the world, but definitely the end of a short-lived fling.

✈️ Travel Trivia Reveal

Yesterday, we posted a little trivia question in the newsletter and asked you to choose what you thought was the best airport for finding international flight deals.

Well, the correct answer is… New York (JFK)!

According to flight deal tracker Going, JFK is a freaking jackpot for international discounts, with average fares averaging 52% off.

Other airports that have pretty consistent deals include Orlando (MCO) and Newark (EWR), both averaging nearly 50% off international fares. 

Meanwhile, JFK, Boston Logan (BOS), and Los Angeles (LAX) also ranked highest for volume of deals, with more than six cheap international flights per week.

I meeeean, if you’re a Daily Drop Pro member, you already knew this to be true. 😎

The next time you’re planning a trip, it might pay to route your trip through one of these deal hubs and use one of those fancy-schmancy positioning flights.

Read more from the list here.

That’s all for today, folks… It’s always a bummer to see an airline partnership die. But if it had to be any of them, I’m glad it was this one.

See you tomorrow and have a wonderful day ❤️

6.9175° S, 107.6191° E

With contributions by Tiffany Eastham, McKay Moffitt, and Benji Stawski