Cash Back vs. Rewards Credit Cards

Ah, the sweet rewards of using credit!

Not only do you get immediate gratification with the buy now-pay later plastic, but now, many credit cards offer rewards and incentives for using their card to make purchases. You can get cash back, or gift cards, or 'reward points' that you can spend on merchandise or services from various merchants. There are also cards that allow you to designate your 'cash back' points to a charity ? sometimes called affinity cards ? and those that put your cash back into a special savings account for college.

Great deal, right? You spend 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 periods for the amount of your 'rewards cash'. You can cash the check and spend the money on anything you want.

Reward cards give you 1-5 reward points for every dollar that you spend at different merchants and types of merchants. Most pay you 5 reward points for purchases made at their 'Merchant Thank You' network, and for purchases made at gas stations, drug stores and supermarkets. You'll get 1 reward point for every dollar that you spend at other merchants. You can then redeem your reward points for particular items from the merchants that belong to the credit card's merchant network.

Which is the better choice?

Each kind of credit card reward has its own pros and cons, and the better choice depends on what's most important to you.

Cash-back Rewards ? Pros

Cash can be used anywhere, for any kind 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 networks 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 use the credit card for purchases made within the merchant member network, you can get as much as 5% value back when you spend your reward points.

Reward points are available to use on a rolling basis. Some card companies may require you to accumulate a certain number of rewards points before redeeming them, but reward point rewards are often more 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 particular merchants and/or on particular merchandise.

Whichever your choice, it makes good sense to get something back when you choose to use credit. If you're a frequent credit card user, the rewards can certainly add up. Among the merchants that belong to various Merchant Member networks are such well-known companies as airlines, Saks Fifth Avenue, Evelyn & Crabtree and Smarter Edge.

Joseph Kenny is the webmaster of the credit card comparison sites Credit Cards Info and also Credit Cards 121

---

Have You Checked Your Permanent Record Lately?

As a young student I feared getting bad grades because... Read More

Credit Cards - A Blessing or a Curse?

Owning a credit card can be quite an advantage. Whether... Read More

Credit Cards - Why Prepay?

With prepaid credit cards, you get the practicality of plastic... Read More

Small Business Credit Cards

So what do you look for when applying for a... Read More

Credit Help for Real Estate Financing: Five Categories of Your Credit Score

1. Payment History -- 35%The number of accounts paid as... Read More

Bad Credit Loans For Those Who Seek Alternatives for New or Old Car

You can still save money on a Bad Credit Loan... Read More

3 Free Credit Reports For You

If you were to tell someone that they can have... Read More

Credit Suicide

Few things influence the home buying process more than your... Read More

Useful Tips On Avoiding Credit and Charge Card Fraud

Credit and charge card fraud costs cardholders and issuers hundreds... Read More

5 Steps You Can Take to Get Paid!

There are always some companies that have past due invoices... Read More

Stop Struggling Because Of Poor Credit And Improve Credit Rating Now

Did you apply for a personal loan only to be... Read More

What Should I Do If I?ve Become a Victim of Identity Theft?

Identity thieves take advantage of everyday opportunities to discover your... Read More

Opting For A Credit Card? Check Out Certain Terms

You've just received a "pre-approved" credit card offer in your... Read More

Credit Reports Inside and Out

The Credit Report is like your scorecard in the lending... Read More

Credit Traps Snag Consumers

Nearly 20 years ago I worked for a small consumer... Read More

Identity Theft - Dont Think You Are Immune

As identity theft becomes more prevalent, the need to regularly... Read More

How Does a Creditor Determine Whether to Grant You Credit?

Credit 101How does a creditor determine whether to grant you... Read More

Identity Theft ? How Can You Prevent It Happening to You?

The nightmare of identity theft strikes an estimated 750,000 people... Read More

Good Credit Is Not A Good Reason To Borrow More Money After Youve Achieved Financial Freedom

The most important thing for you to remember is that... Read More

Fixing A Credit Report

Fixing a credit report starts with seeing what's on it.... Read More

What Are the Most Common Ways to Commit Identity Theft or Fraud?

It's the number one source of consumer complaints at the... Read More

Choosing The Credit Card That Is Right For You

Credit cards represent an important part of our financial lives.... Read More

Credit Card Dirty Tricks

There are many of us that have been badly stung... Read More

Five Credit Card Billing Problems and How to Fix Them

It goes without saying that your first and best defense... Read More

Which Citi Mastercard Is Right For You?

You've decided to apply for a Citi MasterCard, but with... Read More

How to Evaluate and Raise Your Credit Score

Why do some people get offers for pre-approved credit cards... Read More

Free Credit Reports Now Available From the FTC

The Federal Trade Commission (FTC) has set up a new... Read More

Minimize your Risk for Identity Theft

Identity theft is the fastest growing crime in America. According... Read More

Credit Repair Scam - How To Avoid Being A Statistic?

A good credit history is critically important for the consumer.... Read More

Fair Credit Reporting Act: What You Should Know About It?

The Federal Fair Credit Reporting Act (FCRA) is designated to... Read More

Maximizing Credit Card Rewards

We spend money every single day on many different types... Read More

Credit Report Secrets: Do You Know What They Reveal?

If you've ever applied for a credit card or loan,... Read More

Credit Report ? How Your Credit Score is Determined

Most consumers are aware that they have something known as... Read More