Airmiles or Cashback Credit Card: Which is Better?

Do really save money by using an Airmiles Credit Card or can you save more money using a Cashback Credit Card? I personally would vote for the later, but the American Exchange Blue Sky card is almost as good as cash.

Here's why.

The Blue Sky Card allows you to travel free of restrictions and blackout dates — fly on any airline, stay at any hotel, and sail on any cruise line. In my opinion, this is one of the best features that you have since most airmiles cards restrict you to a single airline.

The cardd has no annual fee which is so atypical of airline credit cards. You can find no annual fee cards for Delta and United, but they're hard to find. My United Mileage Plus Card has no annual fees and I'm very happy with it.

But I keep laughing at Chase which sends me pre-approved applications to upgrade to their United Platinum Business Card. In return for 30,000 miles, I get the honor of paying an annual fee of $75. Yeah right.
How much are your miles worth?

Miles that you earned through purchases or bonusus are worth one cent per mile. So for example, if you get an offer of 30,000 miles, it's worth $300 to you. The bank breaks even after 5 years (they wave the first year's annual fee) and starts making a nice profit of $75/year on each card holder thereafter.

Another way to look at it is that you get one mile for every dollar you spend. This is equavalent to 1% savings, the same savings you would have received using a cashback card.

The Blue Sky Card is a little better where you can receive discounts of up to $100 for every 7500 points you earn. This is the same as 1.33% cash back; however, you have to read the fine print, you can:

Use the points for any airline, any hotel, any cruise or any car rental - no blackout dates, advance purchase requirements, hotel room restrictions, or travel restrictions.

Although this is better than most airmiles cards, you are still restricted to the "travel industry." I still like my Discover card because your cash back is not restricted other than you can only take it in increments of $20. Plus if you sign up for the Jan - March 5% bonus, you can use your Discover Card as an Airmiles Card.