[AnthonyMouse]

Airlines do regular promotions where you can buy miles for less than 2 cents per mile. If you get 2% cash back or pay with cash and get a 3% cash discount and can then buy miles for 1.2 cents/mile during the promotion, you're losing 0.8% or 1.8% respectively by using the card that gives you miles instead.

[handle584]

So do credit card companies run transfer bonuses. There are only a handful of airlines who sell pts < 2 cent per point during promo, like Avianca. Others, including the big three US carriers, seldom do this.

Also the big part of this game is sign up bonuses, like spending $5,000 and get 100,000 points instead of the 2% daily rate.

[satvikpendem]

Cash discounts only really exist for locally owned restaurants and other smaller retailers, not bigger ones like Macy's or Best Buy which have a flat price. So in most cases it is in fact the cash purchasers who are paying the 3% fee implicitly but getting no benefits back in the form of cash back or points.