Cashback or Rewards Points Credit Card: Which Should You Get?

Applying for a credit card but don’t know for which type of credit card to go for whether cashback or reward points. Cashback credit cards are those which let you earn a percentage of your spending that is directly credited to your account. Whereas, in reward points credit card you earn reward points on your spending that are redeemable from a rewards portal. You will find a number of cashback credit cards in India and reward points credit cards too. Here is a tabular form of difference between the cashback credit cards and reward points credit cards to help you make an informed decision. 

Basis	Cashback Credit Cards	Reward points credit cards
Joining & renewal fee	Most cashback credit cards come with no joining and renewal fee or a low renewal fee.	Reward points credit cards come with a joining and renewal fee and some with no fees.
Welcome offers	Cashback credit cards usually do not have welcome offers but few offer the welcome benefits.	Reward points credit cards most of the time offer welcome benefits but on some, you do not get welcome offers.
Reward rate	In comparison to reward points credit cards, you get fewer range of rewards and benefits.	You get a wide range of rewards and benefits on this type of credit card.
Accelerated reward rate	You do not get accelerated rewards on this type of credit card. You only get a percentage of your spending.	With this type of credit card you get accelerated reward points on your spendings.
Convertible	Cashbacks can not be converted to reward points at the time of redemption.	Reward points can be converted to cash back at the time of redemption.
Validity Period	The validity period of cashbacks never expires.	Reward points have a validity period. You can only redeem reward points in the validity period and not after it expires.
Miles Conversion	Cashback credit cards do not offer cashback conversion into Airmiles.	You can easily convert your reward points into Airmiles with the reward points credit card.

Cashback credit cards: Cashback credit cards provide a limited percentage of rewards on your spendings. You can earn somewhere around 1%-6% cashback with these types of credit cards. You can check HSBC Cashback Credit Card and Axis Bank ACE Credit Card for the cashback credit cards as they provide pretty decent cashback and other benefits.

Also Read - How To Choose A Cashback Credit Card?

Reward Points credit cards: You earn pretty good incentives on the reward points credit cards. You also get to enjoy welcome benefits with this credit card. The two best rewards credit cards that you can consider are the Bank of Baroda Eterna Credit Card and Axis Bank Magnus Credit Card.

Bottom Line:

After analyzing both types of credit cards, it will be unfair to select one type of credit card. As you can go for any one of the two depending on your requirements and spending habits. If you know how to manage a credit card then both types can reap benefits to you. We hope that the above-given comparison between the cashback credit card and reward points credit card might have cleared your head as to which type of credit card you should go for. Keeping your credit card bills clear and not using the credit card beyond the provided credit limit will help you maintain a good standing account. 

Share your thoughts in the comment section as to which type of credit card you think one should go for!