Which reward credit card is better? Points or Cash back?

Question

There are credit cards that offer points or cash back on purchases. Which one is better? I have good credit.

Answer 1

I like the chase freedom visa card because it lets you choose cash back or points and switch anytime. I get 3% cash back on the things that I buy the most. I signed up online and got a $50 bonus check.

Answer 2

It's an individual choice, but in my opinion cash is much better, unless the points work out to the equivalent of a 5% rebate or more.

With points, you just don't have as much choice. Cash is good everywhere!

With good credit, you might want to consider having more than one rewards card. I suggest checking out http://www.creditcardtuneup.com/ where you can enter how much you spend in different categories (gas, groceries, etc.) and how much you think you will spend on credit cards overall, and the site will compute which card or cards will give you the most cash back. (Note: I have no affiliation with the site).

Since some cards give big rebates on gas, others on different types of purchases, you might find that your particular spending profile is a good fit with a couple of cards, then you just use each card where you get the biggest payback. Good luck in your search.

Answer 3

Getting the right reward card that 'really' helps your cause is the first thing that should be kept in mind while going for a reward card. There is no point in taking a credit card with gas reward if you don't drive much. Similarly, if you rarely fly, an airline miles reward card will be worthless for you.

What are the limitations to reward program? Get clear about it. Ask the credit card agent or representative about store preferences, gas outlets to which the credit card is affiliated, airlines, blackout dates, travel restrictions, reward expiry, reward point accumulation and what is required to earn rewards. A reward credit card with lots of restrictions and difficult to redeem gift vouchers or reward points will only frustrate things on your end.

A reward program with balance transfer option with 0% intro APR is a good thing to have. It saves you money on high interest rates, and if used properly 0% intro APR credit card can be a good asset.

A good credit history helps you get a good credit card with excellent reward programs. Credit cards with reward programs have very low tolerance for repayment defaults. Generally, if a person defaults the 0% intro APR ceases instantly and a high regular APR takes its place. Similar things happen to other rewards. Check out a list of popular reward cards list at: http://www.credit-card-gallery.com/Reward_Card.html

Answer 4

You need to crunch the numbers to see what works best for you.

If a card offers points, how much do you have to spend to earn those points? Next determine what the points are worth by checking what you can redeem them for. If a reward item in their "store" costs 1000 points and you know it normally costs $100, then you know a point is worth about 10 cents. Another factor is whether you are interested in the stuff you can redeem the points for.

Once you do that calc, you see how accumulating points compares to getting the cash back. The advantage of cash back of course is that there is no calc to do and no hunting around looking for a reward item that you actually want.

Answer 5

Give me cash. I don't want to screw with points and deal with converting those points to certificates or whatever.