An Example of Why Points are Better than Cash Back

Let me start with an important clarification: points are better than cash back if your goal is earning free (or nearly free) flights and hotel stays. If that’s not your thing, cash back is absolutely the better choice. But since you’re here, I’m guessing you want to learn how to make travel more affordable — so let’s dive in.

Here’s a real-world example of why points win.

Over the holidays, I bought my son a Lego Castle for $279.99. At the time, Lego was running a 20x Rakuten multiplier — they don’t always go that high, but they do offer strong rewards fairly often. That single purchase earned me 5,600 points. Because my Rakuten account is linked to BILT, Rakuten rewards transferred as points rather than cash-back, as you can see in my February account screenshot below.

5,600 points is remarkably close to the 6,000 points from my Virgin Atlantic Math example, so let’s use this to show you just how powerful points can be. (Worth noting: I also earned 2x points from my credit card on this purchase, making the 5,600 to 6,000 comparison fairly equal.)

Now let’s put those points to work.

Using Virgin Atlantic’s Award Seat Checker, I searched for a flight from Washington DC to London on Friday, May 1st. With the points from one Lego purchase, I could book that economy seat to Europe for just $161 in taxes and fees.

The same flight purchased with cash? $654.50.

Here’s how the math breaks down:

Cost per point = (Cash price − Taxes & fees on award booking) ÷ Points used ($654.50 − $161) = $493.50 in value ÷ 6,000 points = 0.082, or 8.2 cents per point.

Think of it this way — each point was worth about 8 cents toward this flight, compared to the 1 cent you’d get from cash-back. By choosing points over Rakuten’s ‘Big Fat Check’ — which would have yielded just $56.00 — I squeezed over 8x more value out of the same purchase. That’s not a rounding error. That’s the entire game. In the competition between points vs. cash back, points are the clear winner.

If you want help setting up Rakuten to earn points, see this post.