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The Points Guy believes that credit cards can transform lives, helping you leverage everyday spending for cash back or travel experiences that might otherwise be out of reach. That's why we publish a variety of editorial content and card comparisons: to help you find a great card to turn your goals into reality.
Our site may earn compensation when a customer clicks on a link, when an application is approved, or when an account is opened with our partners, and this may impact how or where these products appear. While we don't cover all available credit cards, our editorial team creates and maintains all of the analysis of these cards, and our content is not influenced nor subject to review by any credit card company, bank or partner prior to (or after) publication. Please view our advertising policy and product review methodology for more information.
Guides
Cash back vs. travel rewards: How to choose a credit card
Featured image by ANGUS MORDANT/BLOOMBERG/GETTY IMAGES
Emily Thompson specializes in beginner content as a credit cards editor. She taps into her prior experience as a high school English teacher to help others demystify credit scores and unlock experiences that credit card rewards can make possible.
March 7, 2025 • 14 min read
The cards we feature here are from partners who compensate us when you are approved through our site, and this may impact how or where these products appear. We don't cover all available credit cards, but our analysis, reviews, and opinions are entirely from our editorial team. Terms apply to the offers listed on this page. Please view our advertising policy and product review methodology for more information.Editorial disclaimer: Opinions expressed here are the author's alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.
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By commenting, you agree to our Community Guidelines to help create a positive space for conversation. The responses below are not provided or commissioned by the bank advertiser, our partners, or The Points Guy (“TPG”). They have not been reviewed, approved, or otherwise endorsed by any of these parties. All responses are submitted by individual contributors, and neither the bank advertiser, our partners, nor TPG are responsible for ensuring that all posts and/or questions are answered.
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Quick summary
The article compares travel rewards cards and cash-back cards, outlining the pros and cons of each type.
Travel rewards cards typically offer higher welcome bonuses and more valuable redemption options, especially for those willing to maximize points for travel.
Cash-back cards are praised for their simplicity, straightforward redemption, and ease of use, making them ideal for those who prefer minimal effort.
Choosing the right card depends on individual spending habits, goals and willingness to manage complex rewards programs.
What to consider
Travel rewards cards often require higher spending to unlock larger bonuses and may carry higher fees, but can deliver greater value for frequent travelers.
Cash-back cards generally offer lower bonuses with easier requirements and more options for avoiding fees, but may provide fewer perks.
Points and miles can be worth more than cash back when redeemed for travel, with values varying by program (e.g., some points valued at 2.05 cents each as of March 2025 per TPG's valuations).
What you'll miss from the article
A detailed breakdown of how to match card types to your spending profile and maximize the value of your rewards.
Generated by AI with support from our editorial team.
Comments
By commenting, you agree to our Community Guidelines to help create a positive space for conversation. The responses below are not provided or commissioned by the bank advertiser, our partners, or The Points Guy (“TPG”). They have not been reviewed, approved, or otherwise endorsed by any of these parties. All responses are submitted by individual contributors, and neither the bank advertiser, our partners, nor TPG are responsible for ensuring that all posts and/or questions are answered.
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If you’re new to credit card rewards, one of the first questions you’ll need to answer for yourself is: Should I get a card that earns travel rewards or a card that earns cash back?
Below, we’ll break down the pros and cons of different types of cards and their associated rewards programs. We’ll dive into things like rewards value, welcome offers, redemption, ease of use and perks. Considering these options will help you choose the best card for you.
The number of credit card options is both the best and most challenging part of choosing a card. Before we dig into what different cards offer, you’ll want to think about your own spending habits and goals.
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First, take a look at where your money is going right now. Are you renovating a home and spending a large portion of your money at home improvement stores? Maybe you’re traveling a lot for work or spending your weekends trying out all the new restaurants nearby. Whatever you’re doing, you can find a card that will maximize your rewards in your highest spending categories.
Then, determine what you would like to get out of your credit card rewards. Do you want to use points and miles to visit family over the holidays or book a dream vacation? Or are you hoping to help cover the cost of a large upcoming expense?
These answers are unique to you, and determining them upfront will help you decide which options will work best for you.
Generally, we designate credit cards as either travel rewards cards or cash-back cards. The names are pretty self-explanatory: They are cards that either earn travel rewards or simple cash back.
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However, some cards offer more flexibility and allow users to choose how they redeem their rewards. Cards that earn transferable points, such as American Express Membership Rewards or Chase Ultimate Rewards, allow the cardholder a variety of options for redeeming the points they earn. While some redemptions are more valuable than others (more on that below), it can be nice to have the option to change your redemption strategy in case your goals change in the future.
What you earn on credit card spending is essential, but nothing beats a card’s welcome bonus when it comes to accumulating rewards quickly. The first few months of card ownership are potentially the most valuable since these bonuses can be worth hundreds or even thousands of dollars.
Travel rewards cards almost always offer higher welcome bonuses than cash-back cards. For example, with The Platinum Card® from American Express , find out your offer and see if you are eligible for as high as 175,000 Membership Rewards Points after spending $12,000 on purchases within the first six months of cardmembership. Welcome offers vary and you may not be eligible for an offer which are worth up to $3,500 (according to TPG's March 2025 valuations).
However, a higher bonus on a travel rewards card usually comes with a higher spending requirement. In order to earn the bonus on the Amex Platinum, for instance, you’ll need to spend $12,000 in the first six months of membership.
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Cash-back cards, on the other hand, generally offer a much lower bonus but also require a much lower spend in order to receive it. For example, the Capital One Quicksilver Cash Rewards Credit Card provides a one-time $200 bonus, but it only requires you to spend $500 on purchases within the first three months of opening your account to unlock the bonus.
When you consider a card’s reward categories, it’s helpful to identify where you spend the majority of your money.
While it makes sense that most travel rewards cards earn the most on travel purchases, you can find both travel rewards and cash-back card options that will reward you for everyday spending at places like supermarkets and gas stations.
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For example, the Chase Sapphire Reserve® is a travel rewards card. You’ll earn at least 3 points per dollar on travel purchases (after using the $300 annual travel credit). Apart from travel, though, the card also earns 3 points per dollar on dining and 5 points per dollar on Lyft rides (through Sept. 30, 2027). Since TPG's March 2025 valuations place Chase Ultimate Rewards points at a value of 2.05 cents each, you’ll effectively earn a value of 6.15 cents per dollar spent on travel and dining, as well as a very lucrative return of 10.25 cents per dollar spent on Lyft rides.
But if travel isn’t a big spending category for you or if you want to earn your rewards in cash back, there are some excellent cash-back cards with different reward category options.
The Blue Cash Preferred® Card from American Express gives you 6% cash back at U.S. supermarkets (on up to $6,000 per calendar year in purchases, then 1%) and 6% cash back on select U.S. streaming services (with no cap), 3% cash back at U.S. gas stations and transit, while giving 1% back on other purchases. That means for every dollar you spend at U.S. supermarkets (up to $6,000 each calendar year), you’ll earn 6 cents that can be applied to a statement credit. You'll receive cash back in the form of Reward Dollars that you can redeem as a statement credit and at Amazon.com checkout. The card also features a $0 introductory annual fee for the first year and is $95 each year thereafter (see ).
An important element to consider as you make your credit card decision is whether a card has an annual fee and, if so, whether it is worthwhile to pay.
Travel rewards cards have a reputation for carrying higher annual fees, and sometimes for a good reason. Many premium travel rewards cards have annual fees of $350 or more. The welcome bonuses and perks of these cards generally offset the cost of the annual fee, but the cost itself may not be something you want to pay right now if you’re on a tighter budget.
The good news is that plenty of lower and no annual fee travel rewards cards are available.
The Chase Sapphire Preferred® Card (see rates and fees), for example, has an annual fee of only $95 and still comes with a welcome bonus of 75,000 Ultimate Rewards points after you spend $5,000 on purchases in the first three months of account opening. It also still earns you 2 points per dollar on travel, 3 points per dollar on dining, and 5 points per dollar on Lyft rides (through Sept. 30, 2027). Since the March 2025 TPG valuation is 2.05 cents per point, that’s a lot of value for a relatively low annual fee.
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Furthermore, the Capital One VentureOne Rewards Credit Card has no annual fee and offers 20,000 bonus miles after spending $500 on purchases in the first three months from account opening. You also earn 1.25 miles per dollar on every purchase.
While the perks aren’t as abundant as the perks of cards with higher fees, these cards, along with other low and no-annual-fee travel cards, are a great way to earn travel rewards with lower out-of-pocket costs.
With cash-back cards, you’ll find even more options if you want to avoid annual fees. Some of our favorite no annual fee cash back cards are the Citi Double Cash® Card (see ) and the Chase Freedom Unlimited® (see ). If you’re looking at a cash-back card that does carry an annual fee, though, make sure your earning potential makes the fee worth it. An annual fee on a cash-back card can quickly eat into the rewards you’ll earn with the card.
Big welcome bonuses and hefty annual fees tend to lead to valuable perks, which is a point in favor of points and miles cards. The Chase Sapphire Reserve, for instance, includes a $300 annual travel credit reimbursement and complimentary access to Priority Pass lounges.
Cash-back cards tend to have fewer benefits, but you should still be able to find a card that offers some industry-standard benefits, like:
Purchase protection: This covers your new purchases for a limited amount of time against damage or theft up to a certain amount per claim and per account.
Extended warranty: This extends the period of a U.S. manufacturer’s warranty (typically up to a year) on eligible warranties (typically up to three to five years).
Zero Liability: You won’t be held responsible for unauthorized charges made with your card or account information. Federal law generally limits your liability to $50.
While many travel rewards cards offer excellent bonus categories and perks, keeping up with everything takes effort. Especially if you end up with multiple cards, it's easy to get overwhelmed when figuring out which cards to use for different purchases to maximize your benefits. Then, once you have your points and miles in hand, you’ll need to figure out how you want to redeem them. If you’re willing and able to put some work into your strategy, you’ll be able to get some excellent value with these rewards.
However, not everyone wants or is able to put much energy into maximizing their credit card rewards. If that’s you, a cash-back card may be a better choice.
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If you’re looking for simplicity, cash-back cards are hard to beat. The most work you’ll likely have to put in for one is activating the quarterly 5% bonus categories (and keeping in mind the $1,500 combined spending cap each quarter) on the Chase Freedom Flex® (see ).
But if you don’t even want to deal with rotating categories, you can opt for a card like the Citi Double Cash Card, which pays 2% cash back (1% cash back on all purchases and another 1% back when you pay) on all purchases. Paying on time and in full (one of TPG’s 10 credit card commandments) means you’ll enjoy an almost effortless 2% cash-back reward on all purchases with this card. That’s a pretty good deal for everyday spending and very little effort.
Cash-back cards win again for simplicity on redemption since one cash-back percentage point equals 1 cent per dollar spent. But when it comes to value, points and miles cards almost always come out on top.
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When redeeming points and miles, 1 point or mile is almost always worth more than 1 cent. Furthermore, a point is often not a fixed-rate commodity. The value of currencies like Amex Membership Rewards, Chase Ultimate Rewards and Citi ThankYou points are hard to pin down since you can transfer these rewards to various travel partners and get much more value for a first-class flight.
There’s certainly a learning curve, but referencing our monthly valuations is an excellent way to see if you’re getting a good deal, especially if you’re considering traveling soon.
Generally speaking, it’s better to redeem your points for travel. You’ll likely get more value from a travel redemption than cash back for the same number of points. It’s best to aim to get at least 1.5 cents value from each point.
It depends. It’s hard to beat the simplicity of a cash-back redemption since most cards offer this redemption in the form of a statement credit.
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However, gift card redemptions are sometimes offered at a higher value than cash back. If you can find a good deal on a gift card you’ll use, a gift card redemption may make sense.
Is there a downside to cash back?
Cash back is great if cash flow is what you want or need right now. They're also great if you don’t have the energy to keep up with a more complex credit card strategy. However, you’ll generally get more value for travel redemptions using a rewards credit card rather than a cash back card.
However, some airlines have poorly valued miles, so cash back can be better in some cases.
Bottom Line
If your top priority is getting the most value out of a credit card — no matter the blood, sweat and tears required — you should get a travel rewards card, and maybe a premium one at that. You’ll get far more value out of one of these cards from the bonus, the points, the perks and the redemption options than you’ll get from a cash-back card.
But not everyone has the time or inclination to put this much effort into tracking spending and returns. This is where cash-back cards come in. There’s nothing wrong with either perspective.
The only major misstep you can take — if you pay your credit cards off every month — is not to take advantage of the free money issuers will throw at you in the form of welcome offers.
