Credit cards are not just a convenient way to pay for your purchases, but also a smart way to earn rewards and save money. However, not all credit cards are created equal. Depending on your spending habits and preferences, you may benefit more from a best cashback credit card or a best credit card for reward points. In this article, we will explain the difference between cashback and reward points, their benefits and drawbacks, and how to choose the best credit card for your needs. We will also list the top 3 credit cards that offer great cashback offers and reward points, available on Bajaj Markets.
What are Cashback Credit Cards?
Cashback credit cards are cards that give you a percentage of your spending back as cash rewards. The cashback rate can vary depending on the card, the category of spending, and the amount of spending. For example, some cards may offer a flat-rate cashback of 1.5% on all purchases, while others may offer higher cashback rates on specific categories such as groceries, dining, or travel. Some cards may also have tiered or bonus cashback rates based on your spending level or frequency.
The cashback rewards can be redeemed in various ways, such as statement credits, bank transfers, gift cards, or charitable donations. Some cards may also allow you to use your cashback rewards to pay for purchases on partner websites or apps.
Benefits of Cashback Credit Cards
Cashback credit cards are simple and straightforward to use. You don’t have to worry about complex points systems, redemption options, or expiration dates. You just earn cash rewards on your purchases and use them as you please.
Cashback credit cards are flexible and versatile. You can use your cash rewards for anything you want, whether it’s paying off your credit card bill, saving for a rainy day, or splurging on something you love.
Cashback credit cards are usually low-maintenance and low-cost. Most of the top cashback credit cards do not charge an annual fee or have high interest rates. You can also avoid paying interest by paying off your balance in full every month.
Drawbacks of Cashback Credit Cards
Cashback credit cards may not offer the highest value for your spending. Compared to reward points credit cards, cashback credit cards may have lower earning rates and fewer redemption options. You may not be able to maximise your rewards by transferring them to travel partners or redeeming them for high-value items.
Cashback credit cards may have caps or limits on your earning potential. Some cards may have maximum cashback amounts per month, quarter, or year. Some cards may also require you to activate or register for certain categories or offers to earn higher cashback rates.
Cashback credit cards may not suit your lifestyle or preferences. If you are a frequent traveller or loyal to a specific brand, you may benefit more from a reward points credit card that offers perks and discounts related to your interests.
What are Reward Point Credit Cards?
Reward point credit cards are cards that give you points for every rupee you spend on your purchases. The points can be redeemed for various rewards such as travel, merchandise, vouchers, or experiences. The value of each point can vary depending on the card, the redemption option, and the availability of the reward.
There are different types of reward points credit cards, such as co-branded cards, airline cards, hotel cards, or general travel cards. Co-branded cards are affiliated with a specific brand or retailer and offer rewards and benefits related to that partner. Airline cards and hotel cards are linked to a specific airline or hotel loyalty program and allow you to earn and redeem points within that program. General travel cards are not tied to any specific partner and offer more flexibility and variety in earning and redeeming points.
Benefits of Reward Points Credit Cards
Reward points credit cards offer the opportunity to get more value for your spending. By choosing the right redemption option, you can get more than ?1 worth of value for each point you earn. For example, you can transfer your points to airline or hotel partners and book flights or stays at discounted rates or during peak seasons.
Reward points credit cards offer more choices and variety in rewards. You can choose from a wide range of rewards such as flights, hotels, car rentals, gift cards, merchandise, experiences, or even cashback. You can also mix and match different rewards to suit your needs and preferences.
Reward points credit cards offer perks and benefits related to your interests. If you are a frequent traveller or a loyal customer of a specific brand or retailer, you can enjoy benefits such as free checked bags, priority boarding, lounge access, room upgrades, discounts, or exclusive offers.
Drawbacks of Reward Points Credit Cards
Reward points credit cards can be complicated and confusing to use. You have to keep track of different points systems, redemption options, expiration dates, fees, and restrictions. You also have to do some research and planning to find the best value for your points and avoid wasting them.
Reward points credit cards can be inflexible and restrictive. You may not be able to use your points for anything you want, especially if they are tied to a specific partner or program. You may also face limited availability, blackout dates, or high surcharges when redeeming your points for travel rewards.
Reward points credit cards can be high-maintenance and high-cost. Most of the top reward points credit cards charge an annual fee or have high interest rates. You may also have to pay additional fees or taxes when redeeming your points for certain rewards.
How to Choose the Best Credit Card for Your Needs
There is no one-size-fits-all answer to this question, as different credit cards suit different people and situations. However, here are some factors to consider when choosing between a cashback credit card and a reward points credit card:
Your spending habits: How much do you spend on your credit card every month? What categories do you spend the most on? How often do you pay off your balance in full? These factors can affect how much rewards you can earn and how much interest you can avoid.
Your reward preferences: What kind of rewards do you value the most? Do you prefer cash back or travel rewards? Do you like having more options or more simplicity? Do you have a specific goal or dream in mind? These factors can affect how satisfied you are with your rewards and how motivated you are to use your card.
Your lifestyle and interests: How often do you travel or shop online? Do you have a favourite brand or retailer that you frequent? Do you enjoy perks and benefits related to your hobbies or passions? These factors can affect how relevant and useful your rewards and benefits are to you.
Based on these factors, you can narrow down your choices and compare different credit cards based on their features, benefits, fees, and reviews. You can also use online tools such as calculators, simulators, or comparison websites to help you find the best credit card for your needs.
Some of the Credit Cards that Offer Great Cashback Offers and Reward Points on Bajaj Markets
Bajaj Markets is a one-stop solution for instant loans, insurance, credit cards, and investments. You can also check your CIBIL score for free, track expenses, and calculate EMIs with their app. On Bajaj Markets, you can find different types of credit cards from partner issuers such as Axis Bank, RBL Bank, SBI Card, ICICI Bank, and DBS Bank. Here are some of the best cashback credit cards and reward points credit cards that are available on Bajaj Markets:
Bajaj Finserv RBL Bank Platinum Choice SuperCard
5% cashback on down payments made at Bajaj Finserv partner stores
2.5% cashback on grocery spending
2.5% cashback on utility bill payments
2.5% cashback on movie tickets
1% cashback on all other spends
Welcome bonus of 10,000 reward points
Annual fee of Rs. 999
Axis Bank My Zone Credit Card
5% cashback on grocery spending (up to Rs. 250 per month)
2% cashback on utility bill payments
1% cashback on all other spends
Welcome bonus of 5,000 reward points
Annual fee of Rs. 500
SBI Card PRIME
5% cashback on online shopping
2% cashback on grocery spending
1% cashback on all other spends
Welcome bonus of 4,000 reward points
Annual fee of Rs. 2999
In conclusion, both Cashback and Rewards Credit Cards offer unique benefits, and the right choice depends on your individual needs and preferences. By carefully considering your spending habits and goals, you can select the credit card that maximises your earnings while you spend.