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When it comes to credit cards, there are so many different options available that it can be overwhelming. Two popular choices are travel rewards cards and cash back cards. In this article, we will compare the two and help you decide which one is right for you.
Travel Rewards Credit Cards
Travel rewards credit cards offer points or miles for every dollar spent using the card. These points can be redeemed for travel-related expenses such as flights, hotels, rental cars, and more. Some travel rewards cards also offer perks such as airport lounge access, free checked bag, and priority boarding.
One of the key benefits of travel rewards cards is the ability to earn more points or miles on travel-related purchases. If you frequently travel for business or pleasure, a travel rewards card may be a good fit for you. However, if you rarely travel, you may not earn enough rewards to make up for the annual fee that many travel rewards cards charge.
Cash Back Credit Cards
Cash back credit cards offer a percentage of every purchase back in the form of cash. For example, a card may offer 1% cash back on all purchases, or higher percentages for certain categories such as groceries or gas. Some cash back cards also offer sign-up bonuses and other incentives.
One of the key benefits of cash back cards is the flexibility in how you can use the rewards. Unlike travel rewards points, cash back can be used for anything, including paying off your credit card balance. Cash back cards also tend to have lower annual fees compared to travel rewards cards.
Which One Is Right for You?
The choice between a travel rewards card and a cash back card ultimately depends on your spending habits and priorities. If you frequently travel and can take advantage of the perks and rewards offered by a travel rewards card, it may be the better choice. However, if you prefer the flexibility of cash back and don’t want to pay a high annual fee, a cash back card may be the way to go.
FAQs
| Question | Answer |
|---|---|
| Do travel rewards cards have annual fees? | Many travel rewards cards do have annual fees, which can range from $95 to $550 or more. However, some cards offer no annual fee for the first year or waive the fee altogether for certain cardholders. |
| Can I use cash back rewards to pay off my credit card balance? | Yes, cash back rewards can be used to pay off your credit card balance, or they can be redeemed for statement credits or deposited into a bank account. |
| Do cash back cards have sign-up bonuses? | Yes, many cash back cards offer sign-up bonuses for new cardholders who meet certain spending requirements during the first few months after opening the account. |
Now that you have a better understanding of the differences between travel rewards cards and cash back cards, you can make an informed decision on which one is right for you. Happy earning!