When it comes to using a credit card, one of the most exciting parts is earning rewards on your spending. But the big question many people have is — what’s better: cashback or reward points?
Both can help you save money, but they work differently. Let’s break it down in simple terms so you can choose what’s right for you.
A cashback credit card gives you a percentage of your spending back as money.
For example, if your card offers 2% cashback and you spend ₹10,000, you get ₹200 back — simple!
Benefits:
Example:
If you spend ₹20,000 a month and earn 1.5% cashback, you’ll save ₹300 every month — that’s ₹3,600 a year!
A reward points card gives you points instead of direct cash. You can later redeem them for gift vouchers, flight tickets, shopping discounts, or even statement credit.
Benefits:
Example:
If you earn 5 reward points per ₹100 and each point equals ₹0.25, then spending ₹10,000 earns ₹125 in value.
| Feature | Cashback Credit Cards | Reward Points Credit Cards |
|---|---|---|
|
Earning Type |
Instant money back |
Points collected on spends |
|
Ease of Use |
Very simple |
Requires tracking & redemption |
|
Best For |
Everyday spends |
Travel, shopping, lifestyle |
|
Value |
Fixed (clear % rate) |
Varies by how you redeem |
|
Expiry |
Usually no expiry |
Points may expire after a period |
It depends on how you spend and what you prefer:
In general, cashback cards give more predictable value, while reward points cards can offer higher returns — but only if you redeem them smartly.
Both cashback and reward points credit cards can help you save money — the right choice depends on your lifestyle and spending habits.
If you prefer simplicity, go for cashback.
If you enjoy maximizing benefits, choose reward points.
Either way, using your credit card smartly can turn everyday spending into real savings!