Cash Back vs. Travel Points: How To Choose Credit Card Rewards

Key takeaways

  • Money again bank cards are usually the higher selection if you wish to earn easy rewards in your common purchases.
  • A factors or miles card could also be a greater possibility should you journey typically or wish to begin incomes journey rewards in your purchases.
  • If neither possibility is the proper match, it could be price attempting out completely different bank card combos and rewards buildings to search out what works finest for you.

Rewards bank cards are available many types. Some supply money again, whereas others supply factors or miles, and there could be potential advantages and disadvantages to each choices. Should you’re questioning which sort of bank card rewards to decide on, it helps to grasp how these completely different card varieties work.

Money again playing cards supply money rewards as a proportion again in your purchases. These playing cards are sometimes straightforward to make use of and primarily characteristic money redemptions, although you might be able to select further choices. Playing cards that supply factors and miles usually have extra versatile redemption choices, although they’re typically most dear when redeemed for journey.

Used properly, factors and miles can go a protracted technique to serving to you save towards a coveted trip. However the kind of rewards bank card and rewards construction that’s finest for you in the end is determined by your spending habits and way of life. We examine money again versus journey rewards right here and description a few of the professionals and cons of various kinds of bank card rewards. This manner, you may select which sort of rewards construction is finest in your spending habits and way of life.

What to learn about money again rewards playing cards

Generally, money again is the higher selection for simplicity seekers hoping to earn uncomplicated rewards on on a regular basis purchases.

Money again bank cards supply a proportion of money again on every greenback you spend, with some playing cards providing a better charge in choose classes, like groceries or fuel. Some money again playing cards supply a flat 1.5 p.c to 2 p.c money again for each buy you make, whereas others supply increased bonus rewards — starting from 3 p.c to five p.c again — in fastened or rotating classes.

Redemption flexibility

A serious profit of money again playing cards is their flexibility on the subject of redeeming rewards. Relying on the money again card you join, you might be able to redeem your rewards for a verify within the mail, a direct deposit or an announcement credit score to your account. A few of the finest money again playing cards allow you to money in your rewards for reward playing cards, merchandise or journey rewards by your card’s journey portal, although the worth for these choices is commonly much less.

Redemption worth

Money again bank cards are usually a superb worth for customers who not often journey or favor to economize alongside the way in which, relatively than construct towards a future expertise. Money again rewards are usually price 1 cent every. For example, a 2 p.c money again card can yield you $2 for each $100 you spend.

Execs and cons

Take into account these benefits and downsides when evaluating money again playing cards to factors and miles bank cards:


  • Incomes and redeeming money rewards is straightforward and fast.
  • Money rewards worth tends to be easy and could be simpler to maximise.
  • There are numerous no-annual-fee money again playing cards to select from.
  • Money again bank cards might supply hefty welcome bonuses.


  • Most money again bank cards don’t include notable journey advantages (however you might be able to earn rewards on sure kinds of journey purchases).
  • Rewards worth for money again playing cards could be weaker when in comparison with the most effective journey bank cards.
  • You will have restricted redemption choices — or no redemption choices aside from assertion credit — relying on the cardboard you select.

What to learn about factors and miles playing cards

A factors or miles card will be the better option for many who journey typically or want to begin incomes journey rewards. Many kinds of rewards bank cards fall below the umbrella of “factors and miles” playing cards. These playing cards embrace airline bank cards that allow you to earn frequent flyer miles in a particular frequent flyer program, and likewise versatile rewards playing cards that allow you to redeem factors for journey in a couple of method.

Factors and miles playing cards additionally have a tendency to come back with helpful journey advantages like airport lounge entry, journey credit, utility payment credit for International Entry or TSA PreCheck or built-in journey insurance coverage advantages — though playing cards with the strongest advantages are likely to cost excessive annual charges.

Redemption flexibility

A few of the finest journey bank cards in the marketplace at this time supply robust flexibility on the subject of redeeming your rewards. If in case you have a journey bank card that earns Chase Final Rewards factors, for instance, you might be able to redeem your factors for money again, reward playing cards, assertion credit, merchandise, journey by the Chase Final Rewards portal and even 1:1 factors transfers to Chase airline and resort companions.

Redemption worth

Journey rewards are usually price greater than money again, and a few of the finest journey rewards currencies could be price as much as 2 cents every or extra. Nevertheless, your redemption worth is determined by the way you redeem your journey rewards.

For instance, should you money in versatile factors for an announcement credit score to your account, you might solely get 1 cent per level in worth. However should you switch your factors to a high-value journey companion, your factors might be boosted to 2 cents every or extra. You might also get greater than 1 cent per level in worth should you redeem your factors for journey by your issuer portal.

Execs and cons

Listed here are some common benefits and downsides of selecting a factors or miles card over a money again card:


  • Journey bank cards are likely to have increased annual charges than money again playing cards.
  • Factors and miles bank cards usually require extra effort than money again playing cards on the subject of monitoring your rewards and ensuring you’re getting the most effective worth out of them.
  • Airline bank cards and resort bank cards typically supply restricted redemption choices.

Which rewards are finest for you?

On the subject of money again versus factors, it comes all the way down to your spending habits and way of life. Should you don’t journey a lot or care about utilizing your rewards strategically towards lofty journey objectives, you’re finest fitted to money rewards.

It’s possible you’ll wish to go for a flat-rate money again card so that you don’t have to sustain with rotating bonus classes or activating your rewards. Irrespective of which sort of money again card you select, this transfer will profit you because of the sheer simplicity of incomes rewards. And also you’ll nonetheless get one thing again out of your bank card spending, even should you don’t get probably the most worth in your rewards.

Should you get a rush out of turning $500 price of bank card rewards into $750 or $1,000 price of journey, then you definately’re an ideal candidate for a card that provides rewards within the type of factors or miles. You’d profit from a journey card that offers you loads of choices for boosted factors or miles values and journey upgrades. Should you journey all year long and wish entry to advantages to make air journey extra snug, then an elite journey card could also be a good higher match.

The underside line

To find out whether or not a money again, factors or miles card is healthier for you, you’ll have to know what sort of cardholder you might be and what sort of rewards construction most carefully matches your spending habits and way of life.

Nevertheless it doesn’t essentially come down to picking between money again vs. rewards. It’s not unusual for cardholders to pair a couple of completely different bank cards to maximise their rewards, so attempting out completely different bank card combos and rewards buildings is also an possibility.

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