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Cash Back Cards Vs Reward Cards

In recent days, most credit card companies offer cash back as well as reward points for credit card holders. When you have cash back and reward credit card, you get an opportunity to avail heavy discounts. Even you can donate the points that you earn from these cards to your favorite charity, school or organization. Some credit card companies even allow you to invest your cash back earnings into your savings account.

Apart from all these benefits, one thing, which you need to watch out in these cards is the interest rate, as they are a bit high than the standard credit cards that do not offer you any cash back reward credit points.

Major Differences:

A cash back credit card pays normally between one or two percent on your credit purchases. You will get the cash back rewards in several forms such as discounts on gas or furniture, a free or discounted check via e-mail or on your credit card account.

While in reward credit cards, you get rewards points only on your purchases. You usually earn a maximum of five points for every dollar you spend on your credit card. Nonetheless, with reward credit cards, you can earn points only when you make purchase through specific stores. If you buy from non-specified stores using reward credit cards, you either get less or zero reward points. After the accumulation of points to a certain limit, you may redeem such points for foodstuffs offered by stores in the specified list.

Cash back credit card companies offer you the privilege to make use of cash back credit cards at any locations or merchants you want. Nonetheless, cash back credit card companies pay only one or two percent on your total credit purchases. On the other hand, reward credit card companies pay nearly five percent on your credit purchases. However, the opportunities to earn points with reward credit cards are a bit limited in comparison with cash back credit cards.

It depends on you to go with cash back credit cards or reward credit cards. However, you have to weigh the benefits and drawbacks of both these credit card types. If you area frequent credit cards user, then you may accrue reward points fast by purchasing at specified stores.

In addition, you can accrue points with cash back credit cards to use them, wherever you desire to buy, but with lower payment compared to reward credit card. Here, you will not able to get the cash back very fast.


Before making any decision, ensure to do a thorough research. Ascertain the terms and conditions of a couple of reputed credit card companies and, compare their offerings and benefits.

Understand, if your credit card does not offer you reward points or cash back each time when you use it for purchasing something, you are missing out a great feature from your credit card. Therefore, wisely choose the best cash back credit card or reward credit card according to your spending habits and enjoy its cash back features or reward points.
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Article Added on Sunday, August 31, 2008
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