No, You Didn’t Travel for Free With Those Points and Miles

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The fact is that points and miles don’t give you free travel. They give you an alternative way to extract some value from the charges you make on your credit card.

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You could have opted for cash or cash equivalents, but you opted for a travel experience instead. I applaud the decision, but that does not make it free!

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It’s true that most credit card companies reward their users by giving some percentage back to the cardholder when the card is used to pay for things.

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Didn’t Travel for Free With Those Points and Miles

I’ve talked about how money is fungible, and the same is true of credit card rewards.

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What we should be doing is comparing the “free” travel we got by using a credit card to what we could have had instead.

Businesses that accept credit cards pay a fee to the credit card issuers in the range of 2% to 4%. Let’s say it’s 3% on average.

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