Cash Back vs. Rewards Credit Cards

Consumers today are given more options when it comes to credit cards. There are cash back credit cards that give away rebates or points equivalent to cash while some credit cards provide bonuses by means of rewards such as free travel, free gas, charity donations, etc. With all these choices, which credit card should you get? To answer this question objectively, let’s consider the advantage of both cash back credit cards as well as rewards credit cards.

Cash-back Credit Cards

An advantage of cash back credit cards over rewards credit cards is its flexibility. With a cash back card, you automatically earn a point or a rebate with any type of purchase you make on your card. Of course, the amount of rebate depends on the credit card issuer which can be from 1% to as much as 2% rebate. Despite the low rebate points of cash back credit cards, it gives the card holder the freedom to use the card in any store he prefers and still get points from all his purchases.

Rewards Credit Cards

Rewards credit cards generally give a higher percentage of points for its card holders. Most reward credit cards give as much as 5% from purchases. However, these rebate points are only limited if you make the purchase from a designated affiliate merchant.

For example, if you select a gas rewards credit card, you’re only entitled to get rebate points each time your refuel your car from affiliate gas stations. If you use your gas rewards credit card to purchase from other establishments, no points will be counted in your account.

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How to Compare Cash Back Credit Card Offers

Cash back credit cards are great because of it gives holders the chance to earn rewards from everyday purchases. But with the number of cash back offers in the market, which one should you choose?

Comparing different cash rebate credit cards can be confusing as credit cards may appear to be all the same at first glance. Still, if you take a closer look, you’ll see the differences and the advantages that each card have over the other. In this article, let’s pay more attention to specific cash back credit cards available today. We’ve also included some tips on how you can compare different credit cards with cash back rewards correctly:

Comparing Popular Cash Back Credit Cards

Discover® was the first credit card issuer who introduced cash backs to consumers. Since then, other credit card issuers followed suit with their own cash back offers. In the past years, cash back cards only offer 1% rebate but today, you can find credit cards with as much as 5% rebates offer.

For instance, the Citibank Dividend Rewards MasterCard® and the Blue Cash® Card from American Express® are enjoying huge popularity, particularly because both has a 5% cash back bonus offer on everyday purchases such as gasoline, drug store items, and groceries plus a 1% rebate on all other purchases. Nevertheless, comparing cash back credit cards should not solely be based upon the percentage of cash back rewards.

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