Your Choice for 2021: Cash Back Or Travel Rewards?

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Credit Card Applications » Research » Guides » Travel with Credit Cards » Cash Back or Travel Rewards? Here’s How to Decide On The Right Card

Cash Back or Travel Rewards? Here’s How to Decide On The Right Card


Updated: October 25, 2021

The content is accurate at the time of publication and is subject to change.
CashBack or Travel Rewards

If you’re trying to find the perfect rewards credit card, you might feel like you’re drowning in options. There are just so many out there, and many of them look similar. This can make it tough to decide on a card. One thing people often struggle with is whether to go for a cash back credit card, or a travel rewards credit card. These are the two most common types of rewards credit cards, so understanding the differences between them, and the advantages of each kind, can go a long way to helping you determine which rewards card is the right one for you.

Once you know what type of card you’d like, you can choose from our recommendations listed below.

Cash back credit cards explained

A cash back credit card offers a pretty straightforward deal. Make a purchase, and get a set amount back per dollar spent. Usually this is a percentage, with 1% on every dollar being standard, and 6% per dollar being the biggest cash back offer in most cases. Some cards offer a standard amount back on all purchases in every spending category, while others offer more cash back in certain categories, like restaurants or supermarkets. Still others give bonus cash back in categories that shift each quarter, allowing you to maximize your rewards earning based on the season. For these rotating category cards, you’ll need to sign up each quarter in order to qualify for the extra cash back, which is usually 5%, and limited to the first $1,500 you spend each quarter. That means your maximum quarterly reward will be $75. But you’ll also continue to earn 1% back for every dollar spent in all categories, and that award is unlimited.

The advantage of travel rewards credit cards

A travel rewards card isn’t that different from a cash back credit card. But rather than earning points or cash back, you will generally earn miles that can be redeemed for a statement credit. This statement credit may be used toward travel purchases on your credit card, including gas, airfare, hotel charges, and train or bus fare. Usually, these cards give a bigger reward for travel purchases. If you choose a co-branded credit card, you’ll earn rewards for purchases at the specific airline or hotel the card is branded with, and you’ll be able to redeem your rewards there. Travel rewards cards won’t offer rotating categories; the rewards will be the same year round. For this reason, some people may find them easier to use. But the choice between a co-branded card and a straight travel rewards card can be tricky for some people. The advantage of a regular, non co-branded card is that you can redeem your rewards on any airline, any hotel brand, or any other travel expense – and there won’t be blackout dates or other restrictions on redemption.


Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
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Recommended Cards for Everyday Purchases
Excellent, Good Credit
Excellent, Good Credit
Earn 2% on every purchase with unlimited 1% cash back when you buy, plus an additional 1% as you pay for those purchases.
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Excellent, Good Credit
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Earn 10,000 American Airlines AAdvantage® bonus miles and receive a $50 statement credit after making $500 in purchases within the first 3 months of account opening
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