Is It Worth Having a Cash-Back Credit Card?
Wondering if it’s time to rethink your credit card strategy with all the financial stress and rising prices these days? You might be asking yourself: Are cash-back credit cards still a good deal, or should you switch to a travel rewards card to rack up points and miles?
The truth is, there's no one-size-fits-all answer here. The best card for you really depends on how you spend and what you’re aiming for financially. Let's break down the pros and cons of each type so you can figure out what’s best for you.
When Cash-Back Cards Are a Smart Choice
Cash-back cards are pretty straightforward. You swipe your card, and you know exactly how much you’re getting back. It’s that simple.
What’s nice about cash-back is the flexibility. You can stash those rewards in your savings, spend them on something fun, or even start a travel fund without committing to a travel rewards card. And once you’ve redeemed those rewards, they’re yours to keep—no worries about them expiring or losing value if you close the card.
There are two main types of cash-back cards: fixed-rate and category bonus. Depending on your spending habits, you can pick the one that gets you the most bang for your buck.
Why You Might Lean Toward a Travel Card
If you care about maximizing rewards, especially for travel, a travel rewards credit card might be your better bet. These cards let you earn points and miles that can go towards that dream vacation. Whether you’re loyal to a particular airline or hotel chain or prefer flexibility, there’s a card out there for you.
Travel rewards often give you better value than straight-up cash back, especially if you’re aiming for something like a luxury hotel stay or a first-class flight. Plus, travel cards often come with perks like elite status, free checked bags, complimentary breakfasts, and lounge access—things that can really upgrade your travel experience.
But, be careful: Travel rewards cards aren’t as straightforward as cash-back cards. The value of your points can fluctuate, and sometimes, just when you’re ready to cash in, the rules change or availability dries up. It takes a bit more effort to keep track of everything.
Why Not Both?
You don’t have to choose between cash-back and travel rewards. In fact, having both types of cards in your wallet can help you maximize rewards on every purchase. Each card usually has its own sweet spot—certain categories where it earns more points or cash back—so using the right card for each purchase can really add up.
For example, if you pair a cash-back card like the Chase Freedom Unlimited® with a travel card like the Chase Sapphire Preferred®, you can earn loads of points and then combine them into a single account for maximum value. The same goes for Citi’s lineup of cards, where you can mix and match for the best rewards.
Is It Time to Go with a Cash-Back Card?
So, should you ditch your travel rewards card for a cash-back card? It really depends on what you’re after. If you like the idea of instant rewards and don’t want to hassle with blackout dates or point redemptions, a cash-back card is probably the way to go. Plus, if your travel plans are up in the air, cash-back rewards won’t just sit there unused.
The Takeaway
There’s no right or wrong answer when it comes to picking a credit card. It all comes down to what works best for you right now. And remember, your strategy doesn’t have to be set in stone—you can always switch things up as your situation changes. For now, think about your goals and how much effort you want to put into managing your rewards to decide whether a cash-back or travel rewards card is your best bet.
