There was a surprising twist when a personal finance newsletter called The Lean House Effect recently pitted credit card travel points against cashback for the title of best reward program.

Cashback won, but that’s not the twist. What really stands out is how much better cash back was than travel points. Ten travel and cashback reward cards were considered and monthly spending was set at an average $2,500. The benefits of cashback were apparent over a one-year span of time, but they really stand out over 10 years and longer.

Happy with the flights you’re getting with your travel card? The Lean House blog says you might be able to buy those same flights and more with the money you get from a cashback card.

The top card in the comparison is Roger World Elite MasterCard, which has no annual fee and offers 4 per cent unlimited cashback on purchases in a foreign currency (enough to more than offset the standard 2.5 per cent foreign currency fee on most credit cards), 2 per cent unlimited cash back on Rogers Communications products and 1.75 per cent on all other eligible purchases.

Now, for a complication. Great cashback cards don’t tend to stay that way. It’s standard procedure for a card issuer to introduce a new product with a generous cashback formula, and then make it less favourable after a period of time. The more a card stands out, the more likely it is that it will be reined in.

Don’t ignore the benefits of cashback reward cards on this basis. Just be prepared to switch to something new periodically when your once great card gets knocked down a notch.

The Globe and Mail, October 17, 2019