Choosing the Right Credit Card – Cash Backs vs. Other Reward Credit Cards

Some credit cards give away rewards in the form of free travel, rebates and gift certificates. Other credit cards reward their cardholders in the form of cash. If you’re planning on applying for a credit card, what is right for you- a cash back credit card or a reward credit card?

Cash Back Credit Cards

A cash back credit card usually gives a point or double points for every dollar spent on the card. This means, you get a point regardless of where you spend your card on- whether it’s for your groceries, for car rentals, for dining out, for shopping, etc. Each time you use cash back credit card, your points accumulate until you garnered enough number points to claim the cash.

Some cash back credit cards give their clients the option to choose whether they want their reward in check or a gift certificate from a selected merchant. Usually, cash back points are given away by a minimum cash amount depending on the credit card issuer.

For instance, if you’ve earned points that amount to as low as $25, you can already claim your check. Because cash back credit cards give away points on all types of purchases, these credit cards are recommended for those who use their card for different purposes. This way, they can earn points at a faster rate.

Other Reward Credit Cards

Compared to cash back credit cards, reward credit cards generally give away bigger points. However, earning these points are only limited to selected merchants depending on what type of reward credit card you have.

Examples of reward credit cards are hotel rewards, travel rewards and gas rewards credit cards - just to name the most popular ones. Thus, if you choose a gas rewards credit card, you can get as much as 5% of rebate every time you use the card for your gasoline purchases or car maintenance expenses on selected stations.

On the other hand, if you have a hotel rewards credit card, you will be entitled to earn your reward points every time you use the card for hotel accommodations, hotel purchases, car rentals, etc. In other words, reward credit cards require its card holders to patronize certain affiliate shops or companies in order to gain points.

If you often use your credit card for a particular type of expense- such as travel, refueling, or hotels- then a reward credit card can be your better option. However, it is important for you to make sure that the reward credit card you’ll be signing up for have affiliations with your preferred stores or establishments. Furthermore, each reward credit card has its own conditions with regards to collecting and claiming rewards.

Whether you choose a cash back reward credit card or a reward credit card, what’s important that you do understand your rights and obligations before signing up for the card. Read and understand each statement included in the contract. This will also help you in comparing which credit card issuer offers the best deals.


More Rewards:

Cash Reward Credit Cards

Points Rewards Credit Cards

Travel Rewards Credit Cards