NerdWallet's Smart Money Podcast
Points and Miles vs Cash Back: Pick a Credit Card That Matches Your Spending
16 Mar 2026
Transcript generated automatically by AI and may contain errors.
Chapter 1: How do you choose between airline credit cards and cash back options?
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Sean, what is your relationship like with credit cards these days?
It's the same relationship I've had for a while. I want to keep things simple and I want as much value as possible.
Okay, that's fair. I feel like right now we usually have a love-hate relationship, me and credit cards, but right now it's love. And that's because I have finally gotten around to using AirMiles. So thank you credit card companies for AirMiles. I recently bought a ticket to Barbados. Yay for me. I've also been using my $15 Uber Eats credit.
So you're getting all the value you can, yes?
I'm trying to get the value, and also I'm loving the lounge access. But if you ask me again next week, I might have a different response.
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Chapter 2: What are the different types of credit cards available?
Yeah, once those annual fees come due, we'll talk about it again.
Why you got to bring that up?
Well, today we're going to be chatting about what to do if you're not sure what kind of new credit card you want. Welcome to NerdWallet's Smart Money Podcast, where you send us your money questions and we answer them with the help of our genius nerds. I'm Sean Piles.
And I'm Elizabeth Aiola. Now, this episode's question comes from a listener whose name is Liz, like me. And they sent their question by text. So here's the question. Hi there. My name is Liz shopping for a new credit card. We are a family of four and can't decide between airline credit card versus other credit cards available. Would love your advice.
All right. I think Liz came to the perfect place because at this point, NerdWallet is basically synonymous with credit card shopping. I mean, we have loads of roundups. We have lots of reviews that are written unbiased by our talented team of writers here at NerdWallet. So to help us answer Liz's question, we are joined by one of those writers, dear friend of Smart Money, Sarah Rathner.
Welcome back to Smart Money, Sarah.
Hey, Sean and Elizabeth.
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Chapter 3: What are the pros and cons of airline credit cards?
I'm glad to be here. But before Sarah takes us off with all of her knowledge, we have a disclaimer for you all. And that's that we will talk about a few credit card companies that are nerd wallet partners in this episode. But, but, but, but that does not influence how we discuss them. Now, the benefits, terms and fees mentioned were accurate at the time of posting, but things can change.
And also some offers may have expired by the time you're listening. But for the latest details, follow the links in the episode description.
Thank you for that fabulous disclaimer, Elizabeth.
You're more than welcome. All right. So let's dig into the question, guys. We have a simple yet what I think is sometimes a difficult listener question here because you have to make decisions. And I hate making decisions personally. So I feel the listener. And when it comes to credit cards, so much goes into choosing the right one, right?
So it's good to put thought into what the best credit card is for your situation. Now, let's kick off the convo by discussing the different type of credit cards that are out there. There are many. I personally have a mix of travel credit cards and general rewards credit cards. So let's start off with those two, Sarah.
All right. Yeah. So when we think about travel credit cards, we tend to group them into two different buckets. The first is what we call co-branded credit cards. Those are the cards for airlines and hotels. They have the names of those airlines and hotels right on the card. So it's really obvious what kind of card you're carrying. And then we have what we call general travel rewards credit cards.
And those are cards that aren't tied to a specific airline or hotel, but they earn points and miles that you can apply toward different kinds of travel purchases. And yes, I realize my voice sounds horrible. It's February and I have yet another cold. I'm sorry.
I thought it was going to be like sexy raspy, Sarah.
I'm going to sing Smelly Cat by the end of this episode. Obviously, travel cards are just one kind of credit card you can choose from. NerdWallet has in-depth comparisons of cards for all different types of financial goals that you might have. And we'll link to those in today's show notes. But to name just a few of these other kinds of cards.
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Chapter 4: How can you effectively track annual fees for credit cards?
There are student credit cards and secured credit cards out there for those purposes. Secured credit cards can also serve anybody who is rebuilding their credit.
And if you want to save on interest on existing credit card debt or you're anticipating a really large purchase that you need to pay back over a long period of time, there are 0% interest cards for purchases or balance transfer cards that can be helpful if you're paying off debt.
Now, if you tend to carry a balance in alternative to a 0% card, because those are limited time promotions that do eventually end, there are also credit cards that offer lower interest rates. Typically, credit unions offer these types of cards, so those are worth exploring too.
And so this is just to name the main kinds of credit cards you may encounter as you're making a decision as to what your next credit card will be.
But at the same time, there are so many other types of credit cards. Like you can walk into a Gap and they're going to say, hey, do you want this credit card? I used to work at Gap and had to shield these credit cards and felt guilty every time I did it. You should. There are also gas credit cards. So you can get a credit card from pretty much any company nowadays, it seems.
Yeah, what you're talking about we call store credit cards. So those are cards that are co-branded, there's that word again, for specific retailers. Those cards are interesting because they tend to be easier to qualify for at a variety of different credit score ranges.
So for many people, this could be one of the first credit cards they're able to get, but they notoriously charge high interest rates.
I like to think of them as debt traps. Because these companies just want you to be making them money off of the interest that you'd be paying them.
Absolutely. So you do want to be mindful of, you know, are you going to get a meaningful discount at a store that you spend a lot of money at? But are you also able to pay those bills in full and on time and avoid that high interest debt?
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Chapter 5: What should you consider when evaluating sign-up bonuses?
I don't know how old your children are. But if you're anything like me, you want to shed as much stuff at the checkout gate or right at the airport door as possible and not schlep many suitcases through the airport along with your reluctant children. So I check bags. It's very easy to offset a card's annual fee just on bag fees alone.
And that's something we can continue talking about later of offsetting these fees. Another thing that you can get with airline cards is early boarding. Again, with kids, that could be really helpful. Sometimes they'll get you access to airport lounges, which can be really nice. You can get lots of free snacks before you board your flight. So it really depends on what a card offers.
And in addition, of course, to all of those extra perks, you also earn miles on the card. And those are miles that you can cash in later on for discounted travel. When you're buying four plane tickets, that means a lot.
Yeah, I recently got my first airline specific credit card. It's the Alaska Atmos card. I got this in August, I want to say. It's like you've been holding out on me. I know.
Because Sean's always talking, you know, things about me having many credit cards with fees. So how many credit cards with fees you got now, Sean?
I have two, but I'm about to cancel one of them because I don't like it anymore. But I'm actually really enjoying this Alaska credit card because of all the perks it has, like free check bags. You can get a companion fare where you're basically just paying taxes and fees and you can have someone fly with you essentially for free beyond those fees.
And beyond that, I like the airport lounge here at PDX for Alaska. It's very nice. I feel like I've really kind of elevated my travel game getting this airline specific credit card. Welcome to the other side. Thank you. And Sarah, this makes me wonder, too, how many credit cards do you have? Oh, God. I don't know. So you've lost count at this point?
I've lost count. I should also say I don't have any credit card debt, okay? Because it always sounds when you carry a lot of credit cards, it sounds like you're in over your head.
No.
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Chapter 6: How can you maximize rewards based on your spending habits?
That's right.
Yes. Okay, well, let's talk about the drawbacks to these travel credit cards because there are some, specifically the fees that you mentioned before, the annual fees.
Yeah, a lot of these cards charge annual fees. And we're starting to see triple digit annual fees out of some of these airline cards, $150 and up. Some cards are even several hundred dollars. And so obviously, the higher the fee, the more benefits you get. So it could be worth it to you to pay the fee if you take advantage of a lot of those valuable benefits.
But if you don't, then you're paying money for nothing. You might want to consider a lower fee version of the card or another card entirely. And it really just depends on how you handle a particular card. And that's an individual decision.
One that comes to mind here is the Chase Sapphire Reserve. They made a lot of changes to this card last year. The annual fee, what is it, around $800, Sarah? Is that correct? So you can make this card worth that amount, but you have to work a lot harder to get that value.
I think at this point, you basically need a spreadsheet to track all of the monthly benefits, the quarterly changes that might be happening to the card too, to make sure that you are getting around $800 worth back from what you're paying.
Yeah, and that's a thing to think about when you are considering any sort of rewards card, especially the travel cards. Because something that I've seen that's a bit of a trend is that these rewards programs are getting really complicated. Not just with general travel rewards credit cards, but also some airline cards, too.
They're doing the coupon book thing, that's what we've been calling it, where... A lot of the value that you get out of the card comes from these little statement credits that you can get throughout, you know, once a month, twice a year, once a year for very specific purchases, either with a specific retailer or it'll be like a hotel credit.
or a travel credit if you book through the credit card's travel portal, things like that. And so if you love a deal and you love shopping with a coupon and you're happy to keep track of what's available and it gives you that dopamine hit every time you get that $10 statement credit, and you're able to chip away meaningfully at your annual fee, great.
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Chapter 7: What are the risks of using store credit cards?
I will also call out these credit card companies. for giving us discounts and coupons, I put in quotes, to things that are expensive, more expensive than I would buy in my everyday life. So I'll give you a real life example. I'm going to this event called Trap Karaoke. I get two StubHub credits a year with my Chase card. So I was like, well, let me start using it, you know?
And I saw on StubHub the ticket for $150, which is the equivalent of the first credit for the year that you get. On the actual website for the event, do you want to guess how much the ticket was going for?
Less than $150.
$85. So you have to weigh out again, you know, yes, you're getting a restaurant credit or a hotel credit. But, you know, do you really want to pay that price? And would you really shop there or stay there anyway? So I think people should factor that into spending a lot of money to save a little bit of money.
on something you probably weren't going to buy anyway is not saving money. It's not.
It's being tricked by a company that wants you to spend money. Exactly.
Girl math. All right. Also, for anybody out there who wants to learn more about this, NerdWallet does do roundups of low and no annual fee cards for those who used to be like Sean and are not here for the annual fees. And we're going to link those in the episode description.
I don't know about you, but I can feel overwhelmed when I have like 20 different credit card options and factors to choose from. So how can Liz narrow this down and think through choosing the different types of credit cards? What's the most simple way for her to think through this?
Think about how you want to use any of the rewards you would earn. And also think about where most of your money is going because the ideal card rewards you the most where you spend the most money.
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Chapter 8: How can you avoid overspending while chasing credit card rewards?
And that's a much easier decision to make.
Absolutely. And then I'm thinking, I know we focus a lot on travel here, but as a family of four, what are some other factors that Liz should consider? I personally have an American Express Blue Cash Rewards card, and it gives me good rewards on groceries. As a family of two over here with a boy that eats a lot, I spend a lot on food.
You know, my kid eats a lot, too, and it's, like, shocking. God, and they just keep eating. Like, they keep having to eat multiple times a day. And it's like, God, they just keep. And then I have to feed myself. And it's just like, all I do is plan meals. And so maybe you might want to think about, how can I save money day to day? Things are expensive. Groceries are expensive.
Going out to eat is expensive. Maybe your credit card can be a way to get a little bit more value for every dollar you spend where you spend it. And so that's where you can look at cash back cards. You mentioned the American Express. There are two versions of that card, the Blue Cash Preferred and the Blue Cash Every Day.
Those types of cards earn rewards more on everyday spending, groceries, streaming service subscriptions. If you've got kids, you probably have a few of those. commuting expenses, so gas, sometimes public transit, and even other things like garage fares and tolls and things like that. So there are cards out there that are quite rewarding for those everyday purchases.
And that can be a really great way to get some money back on all the things you were going to purchase anyway.
For a long time, cashback was the only way I went with my credit cards because they're just simple. You can get a pretty good reward rate depending on which card you have and your spending categories. And there are some great cards that don't have annual fees. So check out the boxes for me. OK, well, we'll be back in a moment with more of this credit card conversation. Stay with us. All right.
So, Sarah, let's talk about how to cover the cost of annual fees. I think sinking funds could be a good tool here. What's your thought on that?
A big one is knowing when the annual fee is due, and that has to do with when you applied for the card and got it in the first place. It's going to be typically due right at the time you get that card. It'll be on your first statement. And then a year later, you're charged that fee again. So that's something to budget for.
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