The best credit cards in India not only offer credit facilities to customers but also give them attractive offers like credit card reward points and cash-back on credit card expenditure. These reward points and cash back make credit cards even more enticing for people.
Not all credit cards have all types of benefits. Every credit card has a specific set of benefits, which may confuse customers to choose the right credit card with the appropriate reward benefits. Here is everything you need to know about cash-back credit cards and credit card reward points.
What is a Credit Card Cash Back
Cash-back credit cards offer cash back to cardholders as a percentage of credit card spending. There are different credit card spending categories, and cardholders get more cash back in certain categories over others.
Redemption Flexibility of Cash Back Credit Cards
Cardholders enjoy high redemption flexibility on cash-back credit cards when they set out to redeem their cash back. There are different ways in which cardholders can redeem cash-back rewards. They can get a cheque in the mail or request a statement credit. Cardholders may also get gift cards, gift items, and travel rewards on their credit card cash back. Here are some pros and cons of cash-back credit cards.
Pros of Cash Back Credit Cards
- Cash-back credit cards are easier and quicker to redeem than other rewards like points.
- The reward value of a cash-back credit card is easier to understand than other kinds of rewards.
- Credit card issuers offer several cash-back credit cards that do not come with an annual fee, reducing the credit card cost for the cardholder.
- Credit card issuers may offer attractive welcome bonuses and offers to new customers.
Cons of Cash Back Credit Cards
- Cash-back credit cards do not have any significant travel bonuses and may not prove to be beneficial for cardholders who travel frequently.
- Cash-back credit cards may offer lesser value to customers than other credit cards offering reward points.
- Not all cash-back credit cards come with a flexible redemption option, and the cardholder may have limited options to redeem his cash-back benefits.
What are Credit Card Reward Points
Credit card reward points are points and bonuses a cardholder earns on his credit card spending. These rewards and points are of various kinds: travel reward points, redeemable on air tickets and airport lounges, movie reward points for movie ticket bookings, reward points for shopping, restaurants, hotel bookings, etc.
Redemption Flexibility of Credit Card Reward Points
Credit card reward points offer high redemption flexibility to cardholders. Additionally, they also offer a high redemption value. There are multiple options to redeem your credit card reward points. You can choose the option that suits you the most; for example, a frequent traveller may opt for a credit card that offers higher rewards on travel, while a movie buff can opt for a credit card that offers great discounts and offers on movie ticket bookings.
Pros of Credit Card Reward Points
- Frequent travellers can get more value on their travel credit cards than cash-back credit cards.
- If a cardholder redeems his reward points prudently, he can upgrade his air travel and hotel room reservations using the reward points.
- Several credit card reward points offer travel insurance and airport lounge access on domestic and international travel.
- Credit cards with reward points offer high welcome points and gifts to new cardholders.
Cons of Credit Card Reward Points
Credit cards offering reward points may have a high annual fee for cardholders. You need to carefully understand the charges and terms of usage of a credit card and not apply to it simply by the reward points it offers.
The air tickets, merchandise, and hotel reservation options on reward points-based credit cards are limited. You may not find the hotel, merchandise, or airline of your choice to redeem your points.
If you want to keep your benefits simple, you can opt for a cash-back credit card but if you want to enjoy frills and perks on your credit card, opt for a credit card with reward points.
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