In an earlier News and Notes article here, we discussed credit card rewards programs. The bottom line at that time was that generally, the best deals are cash back. Nobody has blackout dates on cash, you can use it in small increments, cash doesn't expire. And on a dollar-for-dollar basis, some of the most generous programs were cash programs (ie. when you come up with reasonable estimates for what points of various sorts are worth were you to buy with cash whatever those points got you).
Now, according to a Wall Street Journal article, a study has just quantified how infrequently folks can actually use those frequent flier miles to get "free" plane tickets:
From the article: A study testing the availability of free seats showed that Southwest Airlines Co. could fulfill 99.3% of requests for award seats requiring standard mileage levels, and Alaska Air Group Inc.'s (NYSE: ALK , news) Alaska Airlines offered choices on 75% of requests. US Airways Group Inc. could fulfil just 10.7%. Delta Air Lines Inc. was among the stingiest, too, with awards requiring the lowest mileage available for only 12.9% of requests made by IdeaWorks Co., a consulting firm.
In other words, as stingy as the actual value of the frequent flier miles really scale up, that's not necessarily the worst of it. Assuming you've accumulated enough of them, you're still unlikely to actually be able to use them on a flight you want on the most popular airlines.
And it's only going to get worse if and when more of the bigger airlines consolidate (such as the recently announced United and Continental merger) and they cut back on certain routes and try to get more efficient.
Here's a link to the Wall Street Journal article, hosted on Yahoo's Finance site: http://finance.yahoo.com/family-home/article/109543/the-road-to-redemption
We're still big fans of cash-back cards. Rewards are only worth something if they're rewards you are actually going to be able to use. It appears that the Schwab 2% cash-back card is no longer being issued, but Fidelity's still got a great cash-back card deal. Chase has replaced their old cash-back card with their new "Sapphire" card which is almost as good as the old deal. And American Express's "Blue Cash" card is worth looking at as well.
We'd love to hear from folks who have good credit card rebate programs, especially cash-back ones. Let us know how it's worked for you - have you gotten as much back as you'd hoped, have you had good customer service experiences, etc.