It’s Your Choice: Cash Rebate or Reward Point Cards

ADVERTISING DISCLOSURE

ADVERTISING DISCLOSURE:
Credit-Land.com is an independent, advertising-supported web site. Credit-Land.com receives compensation from most credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. Credit-Land.com has not reviewed all available credit card offers in the marketplace.

Credit Card Applications » Research » Guides » Travel with Credit Cards » It’s Your Choice: Cash Rebate or Reward Point Cards

It’s Your Choice: Cash Rebate or Reward Point Cards


Updated: December 26, 2012

The content is accurate at the time of publication and is subject to change.
Despite the credit card hype, the truth is that there are very few credit card holders who actually understand the rewards programs offered by their credit card. While these programs encourage people to keep using their card, people do not realize that there are differences to each reward programs which may not apply to their needs (and preferences). At present, there are 2 ways to redeem credit card rewards through rebates (or cash backs) and through reward points which can be used to "purchase" merchandise or gift cards, free hotel accommodations, and many others. If you want to apply for a credit card and you have to choose between either a reward point credit card or cash rebate credit card, mull over the pros and cons of both. Reward Points Credit Cards With this kind of credit card, you earn points for every dollar's worth of purchase. You can have 1-5 points easily that can be redeemable for a variety of rewards. The more dollars you spend - the more points you gain and the greater the prize you can redeem. The advantages of a reward points card include: • Stores that accredit your reward point credit card allow you to earn extra bonuses and will give you discounts on items purchased. • Points accumulated over time can be redeemed anytime during the program period. • Cash back may have less value offers than reward point cards. Here are the disadvantages of this type of card: • Rewards are dependent on your accumulated points. You have a specified number of points (hence a certain level of expenditure) before you can redeem for a reward. • Points expire. Cash Reward Credit Cards Cash reward credit cards offer at least 1-5% returns on your actual expenses you incurred using your card. If you regularly pay your bills on time and in full, you can also get a higher discount for every product you purchase with your card. Advantages: • You don't need to earn a specific number of points. It's directly received as cash. • Since it is in cash, it is easier to use and you can purchase anything you want and cash is recognizable anywhere and doesn't lose its value • Cash rewards won't expire. • Cash rewards have no annual fees. • Cash reward credit cards have lower interest rates. Disadvantages: • Cash rewards are awarded in a form of a check or have it saved in your savings account. You can't have it in your pocket right away. • Reward points credit card have higher payout offers than cash reward credit cards. Cash reward credit cards or rewards points credit cards are beneficial for you as a user. If you have to choose which among the two cards you should have, you can ask yourself a few questions before applying for one. Questions like: Can you redeem your rewards on an incremental basis? Will you automatically receive your cash reward or redeem your reward? Is there a limit to how much you can earn from your cash rewards? Is the interest rate more costly than the value of your reward? Will your rewards expire? These are just some questions which can guide you in your selection process. Be sure you choose a card that fit your needs.

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.
Add to Favorites:
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.

Other Travel with Credit Cards Research:

Related Research:

Autumn 2018: Best Rewards Credit Cards for Thanksgiving Shopping

Autumn 2018: Best Rewards Credit Cards for Thanksgiving Shopping

Posted: November 8, 2018

Thanksgiving is coming, and whether you are hosting a meal or coming as a guest, your spendings are going to accumulate faster than you can notice. A holiday feast is a costly matter – each year Americans spend around $50 on a Thanksgiving ... Continue reading
The Best Credit Card for Earning Cash: Discover it® Cash Back

The Best Credit Card for Earning Cash: Discover it® Cash Back

Posted: November 2, 2018

You’ll have hundreds of dollars in your pocket in no time because you’ll earn money back on every purchase you make with this card. There are no restrictions on the amount of cash back you can get, and Discover even matches every penny you ... Continue reading
Top 5 Cards for Travel from Our Partners: Autumn 2018 – Expert’s Choice

Top 5 Cards for Travel from Our Partners: Autumn 2018 – Expert’s Choice

Posted: October 10, 2018

Nights are drawing out, the wind is colder every day and you already feel the lightest breath of winter on your face - autumn is here. Holidays are over, kids are back to school and all you are left with are hefty holiday bills that you ... Continue reading
You've successfully subscribed!

Please specify the following:All these fields are optional

Your Credit History
Themes you are interested in:

By providing this information you help us make our news letters more useful and informative. Thank you!