Credit Card Rewards vs Cashback

Credit Card Rewards vs Cashback

Reward points and cashback are popular benefits provided by credit cards. However, cardholders often have questions about their functioning, which option is best, and how to make the most of these benefits. Nowadays, people choose their cards based on these extra benefits. Keep Reading to know more about when using or selecting a Rewards Credit Card or a Cashback Credit Card.

Cashback Credit Card

If you're new to getting a credit card, a cashback card might be the better choice. You shop as usual, and you'll get cashback for your purchases. Plus, with a cashback card, the value of the cashback you receive stays consistent, which is not applicable to a reward points card.

If you want a credit card that provides benefits for all your various expenses, cashback credit cards can be a great choice. They're simpler to understand, making them a preferred option, especially for newcomers to credit cards.

Suggest Read: Best Cashback Credit Cards 

Reward Point Credit Card

If you've been using a credit card for a while, understanding the points system and how credit card reward points work shouldn't be too hard. Many of these cards offer fantastic sign-up bonuses and extra perks like travel and lifestyle benefits. Additionally, the card provider might increase the value of the reward points in the future to help you get higher discounts.

A rewards points card is perfect for individuals seeking benefits tailored to specific types of spending, like travel or lifestyle. For example, if you travel frequently, a credit card that offers generous reward points on travel expenses could be the ideal choice for you.

Suggest Read: Best Rewards Credit Cards 

Is it better to go for a rewards credit card or a cashback credit card?

A rewards credit card gives you value-back through reward points, which you can redeem for vouchers, merchandise, or statement credit. On the other hand, a cashback credit card gives you cash credits directly into your card account or a linked wallet. Your choice between the two depends on your preferences.

Here are a few points about rewards and cashback credit cards that could help you decide which one is suitable for you:

Rewards Credit Card: 

  1. Value-back is provided in the form of direct cash credit.
  2. Cashback typically equals its monetary value.
  3. Cashback is deposited either into the card account or linked wallets.
  4. Cashback is directly credited and is often applied against your credit card dues.
  5. There are only a limited number of cashback credit cards available in India.
  6. Co-branded cashback credit cards offer a higher cashback rate when shopping with associated brands.

Cashback Credit Card: 

  1. Value-back is provided through reward points.
  2. One reward point does not necessarily equal one rupee; the monetary value of points is typically lower.
  3. Points are collected in the card account and often have an expiration date.
  4. Accumulated points can be used to obtain items from the rewards catalogue.
  5. Many credit cards in India operate on a reward points system.
  6. You can discover co-branded rewards credit cards that offer additional rewards when shopping with associated brands.


To choose the right credit card between rewards and cashback options, it's crucial to understand your spending habits first. The best card for you is the one that provides the most benefits for the type of spending you  do with a credit card.

When selecting a card, carefully examine the offers, benefits, and features, as well as the terms and conditions associated with the card. This thorough evaluation will help you make an informed decision that aligns with your spending habits and financial goals.

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