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When it comes to choosing a rewards credit card, you may be torn between cash rewards or travel rewards. Both options have their advantages and disadvantages, and it ultimately comes down to your personal preference and lifestyle. In this article, we’ll explore the differences between cash rewards and travel rewards, and help you decide which one is right for you.
Cash Rewards
Cash rewards credit cards offer you the ability to earn cash back on your purchases. Typically, these cards offer a percentage of cash back on certain categories, such as gas, groceries, and dining. Some cash rewards cards offer a flat rate of cash back on all purchases. The cash back you earn can be redeemed for statement credits, bank deposits, or gift cards.
One advantage of cash rewards is their simplicity. You don’t have to worry about redeeming points or miles, and you can use the cash back you earn however you like. Cash rewards are also a good option if you don’t travel often or if you prefer to book your travel independently.
However, cash rewards may not offer as much value as travel rewards. Cash back percentages are typically lower than the value of points or miles, and cash back may not be as flexible as travel rewards. Additionally, some cash rewards cards may have annual fees or require you to spend a certain amount to earn rewards.
Travel Rewards
Travel rewards credit cards offer you the ability to earn points or miles on your purchases, which can be redeemed for travel-related expenses such as flights, hotels, and rental cars. Some travel rewards cards also offer additional perks such as airport lounge access, free checked bags, and travel insurance.
One advantage of travel rewards is their potential value. If you use your points or miles wisely, you can often get a higher value than cash back. Travel rewards are also a good option if you travel frequently or want to take advantage of airline or hotel loyalty programs.
However, travel rewards can be more complicated than cash rewards. You may have to deal with blackout dates, limited availability, and restrictions on which airlines or hotels you can book. Additionally, travel rewards cards may have annual fees or foreign transaction fees.
Which One Is Right for You?
Ultimately, the choice between cash rewards and travel rewards depends on your personal preferences and lifestyle. If you prefer simplicity and flexibility, cash rewards may be the best option for you. If you travel frequently and want to maximize your rewards, travel rewards may be the better choice. Whatever you choose, make sure to read the fine print and understand the rewards program before applying for a credit card.
FAQ
| Question | Answer |
| Do cash rewards expire? | It depends on the credit card. Some cash rewards expire after a certain amount of time, while others don’t. |
| Can I use travel rewards for non-travel expenses? | It depends on the credit card. Some travel rewards can be redeemed for statement credits or gift cards, while others can only be used for travel-related expenses. |
| Do I have to pay foreign transaction fees with cash rewards? | It depends on the credit card. Some cash rewards cards charge foreign transaction fees, while others don’t. |
| What’s the best way to maximize travel rewards? | Make sure to use your points or miles for high-value redemptions, such as business class flights or luxury hotels. Also, take advantage of airline or hotel loyalty programs to earn additional rewards. |