Cash Back or Points
Reward cards are a growing in popularity. There are hundreds of different cards out there with some pretty outstanding offers, but you can’t just jump right into one. You need to make a calculated decision and see which one is going to work the best for you. The biggest choice you have to make is between cash back card or a point’s card. It’s actually a hard decision to make, but here we are going to break it down with some pros and cons.
Since cash back cards sound like such a great idea let’s talk about those first. These types of cards offer allow you to earn a percentage on everything you spend. Your normal cash back amount ranges anywhere from 1% to 5% cash back. I always like to start with the bad news first so we’ll talk about the cons.
One thing you need to watch out for is the fact that on most cards only pays out their rewards once a year. These cards also seem to be less targeted toward your own personal interests. Sometimes if your rewards are tier-based the terms may be hard to understand or follow. You might not receive higher incentives on specific products or services.
But there is always some good news with the bad. These types of rewards tend to have a lot less limitations and are usually much easier to acquire your bounty. The biggest selling point with these are the fact that your earn actual cash back! You get money in your pocket or a credit on your next bill instead of selecting a gift that you may not need or would not have purchased if you had the cash instead.
But what about points reward cards? They can’t be all that bad and the rumor out there is that you can actually earn more with rewards cards. But is that true? With a reward card you earn a specific amount of points for every dollar you spend. You might also earn miles. The most common two types of non-cash back cards are reward points cards and airline mile cards. You can earn points for what you spend and even earn extra points at specific locations. With these types of cards you can redeem your points for travel, gifts or merchandise.
But what are the strings attached to this type of card. One of the big ones are most of your points can only be redeemed for products or services. Some of your points may expire after a specific amount of time. Another handicap is that you can only redeem your points at specific locations. Some cards only allow you to earn a certain amount of points.
But what’s the good news now? You can earn extra discounts and bonuses at partner locations and special merchants. One of the best perks is that once you build up a certain amount of points, you can redeem them at any time. Another great thing about this type of card is that it is targeted toward your specific interests. With these points you can redeem them for items of your choice.
The bottom line is that only you can choose which card is better for you. There are a lot of different types of cards and everyone has their own preference, but hopefully these tips have given you just a little more information to help you make an educated decision.