Cash Rewards Credit Cards Versus Travel Rewards Cards
Are you considering getting a new credit card? And are wondering whether you should go with a travel rewards card or a cash back rewards card? Then in this article we will compare and contrast the two. By the time you are finished reading you will be better able to make a decision, either to go with airline rewards card, travel rewards card or with a cash rewards credit card.
Fifteen years ago Frequent Flyer Miles programs got married with the rewards credit cards. This was just the beginning of the decades long race to gain attention and loyalty from a consumer. To entice the consumer to buy with the credit card while feeling generously rewarded for spending money.
While programs like that were modestly beneficial for the consumer, the difficulty of redeeming rewards was quite obvious. Sometimes, the miles earned through purchases would have to be quite numerous in order to redeem them for an actual reward 소액결제현금화. Other times, there were blackout dates for travel using frequent flyer miles. When you chose to use your points on merchandise, you were faced with limited, often overpriced selection.
So the consumer was lured into applying for rewards cards with the promise of easy, free money or rewards, and ended up tossing the reward points away, or purchasing stuff that they really didn’t need just because it was the best item from a limited size catalog.
Today, the lesson has been learned. The credit card companies have realized that giving money back is the best solution to the dilemma of how to best attract credit worthy consumers to apply for another line of credit and another card. You can apply for a card returning 1% cash back, 3% or 5% cash back and more on just about any purchase you make. There are extreme rewards up to 20% or more but these are usually time limited, or they are in effect with just select few merchants.
Cash back as a reward is highly convenient. It can be redeemed as a statement credit, or redeemed as a gift card, or to purchase household items.
The only obstacle with cash rewards cards is the cash back redemption policy, or cash back redeem amount. Some cards will have you wait as long as 120 days to gain access to your cash back, others will impose high payout thresholds, as high as $30 – $50! So you need to take this into account, and compare the payout threshold with your typical monthly spending. The last thing you want is to fall in the trap of purchasing more than you can afford because you were chasing your cash back.