Credit card Cashback and Rewards are perhaps the most widely used way cardholders earn rewards from everyday spending. They are different, and people do attract different preferences. Here’s a close look at each:
Credit card Cashback and Rewards
Cashback credit cards work by bringing back a percentage of the amount purchased as cash. This amount is usually credited to your account or is otherwise redeemable. For example, if a card gives you 2% cashback, you would get INR 2 for spending INR 100. Cashback is very easy and flexible because you can apply it, in most cases, as a statement credit, deposit directly to your bank account, or apply it toward purchases. This makes it an attractive alternative for someone in favor of simplicity and instant savings without accumulating points.
Most of the cashback cards feature tiered rates; often, they offer different cashback percentages on groceries, dining, or fuel.
Do You Know that over 60% of card users select their card based on rewards. Knowing the options will allow you to make the right financial choice.
Credit Cards Rewards Points: More Than Points
Rewards credit cards, in contrast, award points or miles for each rupee spent. The value of these points varies based on how and where they’re redeemed. Often, rewards cards are tied to travel programs, allowing you to redeem points for flights, hotels, or other travel experiences. Some rewards points can also be redeemed for merchandise, gift cards, or statement credits, but these options may offer less value compared to travel redemptions.
Rewards cards are ideal for people who travel frequently and can maximize the value of their points. However, rewards programs tend to be more complex than cashback, requiring a bit of research and planning to redeem points effectively.
Credit card Cashback and Rewards – Which is Best for You?
Its not a rocket science to understand that cashback is an actual money back. Rewards are basically offers you will get on the money you have already spent. There are ways to see what are the bouquet of items that are being provided by credit cards in form of rewards, and based on that information, you can make an informed choice.
The Paradox of Amit
Aamit was a working professional in Hyderabad and tech-savvy. He was torn between cashback and rewards. After taking one's all expenses into the account, he decided on a rewards card, which helped him amass the maximum through points. In this case, therefore, the card features relate to spending behavior.
Make the Right Choice
The cash back and rewards cards are reviewed based on your spending patterns and goals. And the right card can indeed boost your finance and enrich your lifestyle!
