Credit Card Reward Points vs Cash Back:
Credit cards are not just for making payments; they also offer benefits like cash back and reward points. These benefits can help you save money or get discounts on purchases. But what exactly are cash back and reward points, and which one is better? Let’s understand the difference.
Cash back is a simple and direct benefit. When you spend using your credit card, a certain percentage of your spending comes back to you as cash. This amount is usually credited directly to your bank account or linked wallet. Sometimes, it is given as a voucher. The best part about cash back is that it does not have an expiry date, making it easy to use whenever you want.
Reward points work a little differently. When you make purchases with your credit card, you earn points instead of cash. The number of points depends on how much you spend. These points can be redeemed for vouchers, travel bookings, or gift cards. However, reward points often come with an expiry date. If you don’t use them in time, they can become worthless.
Both cash back and reward points have their own advantages. Cash back is straightforward and easy to use, while reward points can offer higher value if redeemed wisely for travel or shopping. However, points require careful tracking and planning to ensure they are not wasted.
Choosing the right credit card depends on your personal needs and spending habits. If you prefer simplicity and instant benefit, a cash back card is better. If you travel frequently or shop a lot, a rewards card might give you more value in the long run.
So there is no one-size-fits-all answer. Compare the benefits, limits, and terms of each card before making a decision. By understanding your spending patterns, you can choose the card that gives you the maximum advantage.
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