Should my first credit card receive cash back or travel rewards? – TBEN


Choosing your first credit card can be difficult. Annual fees, perks, and rewards earned on purchases are all factors in the decision. A card that pays miles or points can earn you amazing travel experiences, but on the other hand, cash back cards can have the same travel experiences – or whatever. Both types of cards have their strengths and weaknesses for new cardholders.

Are Cash Backs or Travel Rewards Better for Your First Credit Card? Here’s what to think about.

Reasons to choose a refund card

Cash back credit cards offer more flexibility and, in some cases, a lower price.

Cash can be used for anything – anytime

With a cash back credit card, your rewards are completely flexible. Use cash back to pay off debt, save for the future, or splurge on something special. The options are limitless, and you don’t have to spend your hard-earned rewards with a specific airline or hotel chain.

Plus, cash doesn’t expire. So there is no pressure to trade it in for a less than desirable purchase before it’s too late.

More freedom when traveling

If you decide to use your cash rewards to pay for travel, you can choose any airline or hotel you want – no loyalty required.

But when you opt for miles over cash back rewards, you may have to travel at a time that is not convenient for you, as only some flights have award seats. Worse, your airline or hotel might have blackout dates when you can’t use points or miles at all.

A credit card that offers cash back instead of points could mean you won’t have to stay in a hotel that is poorly located or doesn’t provide your favorite amenities. You can book anytime, anywhere and without having to worry about loyalty program restrictions.

Reduced annual fees

Reasons to choose a card that earns miles or points

Travel credit cards that earn points or miles are extremely popular because they allow travel that otherwise would not be possible. These cards allow the average person to book a luxury vacation and save money on fees, in addition to many perks such as access to the airport lounge or free checked baggage.

First-class travel at your fingertips

Sometimes using miles instead of cash back to book travel gives you more value. For example, a luxury flatbed in business class that costs thousands of dollars in cash could be had for a surprisingly affordable sum in points or miles. Earning enough cash back to pay for the same trip would take much longer.

Save money while traveling

These savings can add up if you are a frequent traveler.

Take advantage of many travel benefits

These benefits can add value to the cardholder even though they have an annual cost.

Questions to ask before getting your first credit card

Here are some questions you should be able to answer about the credit card you selected before clicking the “Apply” button:

  • What is the welcome bonus?

  • How much do you have to spend to earn the bonus?

  • Does the card earn cash back or travel rewards?

  • How much will you earn on your purchases?

  • Are there other benefits that matter to you and what is their personal value to you?

The bottom line

When determining whether cash backs or travel rewards are better for your first credit card, think about your immediate goals.

  • Do you need to build up your emergency fund or pay off your debts? A cash back credit card can help you reach those goals faster.

  • Do you want to travel, but are not sure you can afford the flight or hotel? Points and miles can significantly reduce the cost.

Your answers to these questions should indicate whether you should apply for travel rewards or cash back credit cards.

If you’re still having trouble, consider a card that offers the best of both worlds. A card like the Chase Sapphire Preferred® Card earns points that can be redeemed for cash or travel, while also giving you the option to convert points into travel rewards with airline or hotel partners for potentially higher value. It also includes great perks like primary rental car coverage, delayed baggage insurance, and trip cancellation protection.

How to Maximize Your Rewards

You want a travel credit card that prioritizes what’s important to you. Here are our choices for the best travel credit cards of 2021, including those that are best suited:



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