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When it comes to choosing a type of credit card, there are two main options you’ll typically encounter: cashback and travel rewards cards. Both offer great benefits, but deciding which one is better for you will depend on your individual spending habits and preferences. In this article, we’ll compare cashback vs travel cards and help you determine which one is the best fit for your lifestyle.
Cashback Cards
Cashback cards offer rewards in the form of cash back on your purchases. Typically, these rewards range from 1-6% cash back, depending on the card and the category of your purchase. For example, you may earn 2% cash back on all grocery purchases, or 5% cash back on gas purchases.
The main advantage of cashback cards is that the rewards are straightforward and easy to understand. You’ll receive cash back on every purchase you make, and there are typically no restrictions on how or when you can redeem your rewards. You can simply use the cash back to pay down your balance, request a check or deposit the cash into your bank account.
However, one downside to cashback cards is that they may not offer as high of a value in terms of rewards as travel cards. Additionally, if you’re someone who likes to travel, cashback cards may not be the best choice for you since they don’t typically offer travel-related perks.
Travel Cards
Travel cards, as the name suggests, offer rewards that can be used towards travel-related expenses. These rewards can include things like airline miles, hotel points or statement credits that can be used towards travel purchases.
The main advantage of travel cards is that they often offer greater rewards value than cashback cards. Additionally, they typically come with other travel-related perks, such as free checked bags, airport lounge access and travel insurance.
However, travel cards can be more complicated to understand and redeem. For example, you may need to use your rewards within a certain time frame or redeem them with specific travel partners. Additionally, travel cards may come with higher annual fees and interest rates than cashback cards.
Which One is Best for You?
Deciding between a cashback card and a travel card will ultimately depend on your individual spending habits and preferences. If you value simplicity and straightforward rewards, a cashback card may be the better choice. On the other hand, if you travel frequently and want to maximize your rewards value, a travel card may be the way to go.
It’s also worth noting that some credit cards offer a combination of both cashback and travel rewards, so you may not have to choose between the two. Ultimately, the best option for you will depend on your individual needs and financial goals.
FAQ
| Question | Answer |
|---|---|
| What is a cashback credit card? | A cashback credit card offers rewards in the form of cash back on your purchases. |
| What is a travel rewards credit card? | A travel rewards credit card offers rewards that can be used towards travel-related expenses, such as airline miles or hotel points. |
| Which type of credit card offers higher rewards value? | Travel cards typically offer greater rewards value than cashback cards. |
| Are there credit cards that offer both cashback and travel rewards? | Yes, some credit cards offer a combination of both cashback and travel rewards. |