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.
Advertiser disclosure
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.
Jennifer is a contributing writer to The Points Guy where she focuses on family travel. She is also the founder of Deals We Like where she helps her readers travel on a deal.
Credit card writer Danyal Ahmed is an avid traveler, averaging about 100,000 aeronautical miles per year. He regularly applies that knowledge and his expertise in credit cards to his role as a credit card writer at TPG.
also contributed to this story
January 27, 2025 • 7 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 note: This is a recurring post, regularly updated with new information and offers.
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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Quick summary
Cash-back cards offer straightforward rewards with flexible redemption options and no expiration once redeemed.
Travel rewards cards can provide higher value for travel-related redemptions and offer additional perks like elite status, lounge access and complimentary services.
Choosing between cash-back and travel rewards depends on your spending habits, travel frequency and personal preferences.
Combining both types of cards can help maximize rewards by tailoring card use to specific purchase categories.
What to consider
Cash-back rewards are simple to manage and redeem, while travel rewards may involve more complex redemption processes and potential restrictions.
Travel rewards value can fluctuate due to program changes, blackout dates or limited award availability.
Your optimal strategy may shift over time as your financial goals and travel plans evolve.
What you'll miss from the article
A detailed comparison of how to mix and match card types to maximize both cash-back and travel rewards for your unique situation.
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.
With high inflation and financial anxiety, you might wonder whether you should reconsider your credit card approach. Are cash-back credit cards worth it? Or should you have a travel credit card to earn points and miles?
There are pros and cons for each type of card, and you’ll find that there isn’t one perfect credit card approach for everyone. Your typical credit card purchases and financial goals will play large parts in helping you decide which option best fits your needs.
Check out these helpful insights as you decide which type of credit card makes the most sense for you.
When cash-back cards make sense
Cash-back credit cards are simple. There’s no guessing game involved, as the terms are pretty straightforward. Every time you swipe your card, you know exactly how much you’ll get back in return. It’s almost instant gratification.
You can decide what you want to do with the cash at any point — whether it’s putting it in your savings account or using it for a particular purchase.
If your goal is to earn rewards you want to put toward lessening travel expenses without sacrificing the flexibility that cash-back cards provide, you can separate the rewards you earn into a travel fund.
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Additionally, once you redeem your rewards for cash back, they don’t expire. Once they’re in your bank account, they’re yours to keep. There’s no need to worry about what happens if you stop using the credit card or even close it.
Two types of cash-back credit cards are available: ones that earn at a fixed rate and those that offer bonuses in specific categories. These options allow you to tailor your strategy so you get the best cash-back credit card for your needs.
If you’re looking to maximize your rewards, particularly for travel purposes, then a travel rewards credit card may be your better choice. A travel credit card allows you to earn points and miles to apply toward that once-in-a-lifetime trip. There are various options, from hotel-specific cards and airline-cobranded cards to flexible rewards cards.
You’ll often find that you can use your travel rewards at a significantly better value than if you opted for just cash back. With many 2% cash-back credit cards available, you’ll want to ensure you’re earning more than 2% in value for every purchase you make with a travel rewards credit card.
But aside from the points you earn, travel credit cards offer many other incentives. For starters, several airline and hotel credit cards offer opportunities to earn status with the respective airline or hotel. This is well worth using a travel credit card for many travelers, as those elite status perks are invaluable.
There’s one catch, though: Travel rewards credit cards require more work, so they’re not as simple as cash-back credit cards.
Until you go to redeem your rewards, the value of your rewards can be unknown. Additionally, sometimes loyalty and reward programs change their redemption and earning structures before you have the opportunity to redeem your points. Many reward programs are also subject to availability within a certain room type or cabin, so your redemption options may be limited.
Your options are not limited to a cash-back or travel rewards credit card. You may find that it makes more sense to have both a travel rewards card and a cash-back card (or perhaps several of each) in your wallet.
This will allow you to earn the most rewards on every purchase you make. Since each credit card awards a different amount of cash or rewards depending on the category type, you can pick the best card for each purchase.
This strategy requires you to pull out a different card based on your purchase, but with a little bit of effort, you’ll be on your way to traveling at deeply discounted rates.
Since each card offers different points on category purchases, using the card that will earn you the most rewards on that particular purchase will earn you premium travel in no time. And then, you can pool your earnings into a single account when you’re ready to maximize your ThankYou points.
In short, it depends. If you prefer instant rewards versus points and miles to use at some point in the future, then yes, a cash-back card is the way to go. Or, if you want to avoid worrying about award availability, capacity controls and blackout dates, then a cash-back card would suit you well.
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Remember, too, that a limited travel schedule in the future may make it harder to justify switching to a travel rewards card, as your earnings will just sit unused in your account.
There’s no definitive answer as to whether a cash-back credit card is worth it, as everyone is unique. Fortunately, your strategy now doesn’t have to be your strategy forever. You can always change up your credit card rewards approach when your situation changes.
But for now, determine your goals and how involved you want to be with your rewards to determine whether a cash-back credit card is worth it.
