Cash Back vs. Rewards Credit Cards

Ah, the sweet rewards of using credit!

Not only do you get contiguous satisfaction with the bargain now-pay later plastic, but now, many credit cards offer rewards and inducements for using their card to make purchases. You can get cash back, or gift cards, or ‘reward points’ that you can pass on wares or services from assorted merchants. There are also cards that allow you to denominate your ‘cash back’ points to a charity – sometimes called chemical attraction cards – and those that put option your cash back into a particular nest egg account for college.

Great deal, right? You pass your money and get something in return. The catch is, of course, that you’re paying interest and card fees to get your cash back rewards. But if you’re going to be using the credit card anyway, you might as well get something back out of it, right?

Most cash-back cards give you 1-2% cash back on most of your purchases. You’ll get a check at specified time periods for the amount of your ‘rewards cash’. You can cash the check and pass the money on anything you want.

Reward cards give you 1-5 reward points for every dollar that you pass at different merchants and types of merchants. Most wage you 5 reward points for purchases made at their ‘Merchant Thank You’ network, and for purchases made at gas stations, drug supplies and supermarkets. You’ll get 1 reward point for every dollar that you pass at other merchants. You can then deliver your reward points for peculiar points from the merchants that belong to the credit card’s merchant network.

Which is the better choice?

Each sort of credit card reward have its ain professionals and cons, and the better pick depends on what’s most of import to you.

Cash-back Rewards – Pros

Cash can be used anywhere, for any sort of purchase. Gives 1% - 2% cash back on all purchases.

Cash-back Rewards – Cons

Rewards points cards may give rewards of higher value, particularly for purchases at merchant webs stores, gas stations and supermarkets. Cash-back can only be used when a check is issued.

Rewards Points – Pros

Rewards points are often higher value than cash-back. If you utilize the credit card for purchases made within the merchant member network, you can get as much as 5% value back when you pass your reward points.

Reward points are available to utilize on a peal basis. Some card companies may necessitate you to collect a certain number of rewards points before redemptive them, but reward point rewards are often more than easily available than cash-back rewards. Reward points can be used for cash rewards in some circumstances.

Reward Points – Cons

Reward points can only be redeemed from peculiar merchants and/or on peculiar merchandise.

Whichever your choice, it do good sense to get something back when you take to utilize credit. If you’re A frequent credit card user, the rewards can certainly add up. Among the merchants that belong to assorted Merchant Member webs are such as well-known companies as airlines, Saks Fifth Avenue, Evelyn & Crabtree and Smarter Edge.