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Travel or cash back credit card: Which Should You Choose?

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    Travel or Cash Back Credit cards are both quite famous among the credit card categories. A cashback credit card is ideal if you're searching for a straightforward, profitable credit card. A travel rewards card is your best option if you want to travel with less money.

    Let us discuss the distinct points of Travel or cashback credit cards to help you decide which one you should choose:

    What are they?

    Travel Credit card: As the name suggests, a travel credit card is the one that provides travel-related rewards on purchases made and the amount spent using the card. You can apply for travel credit cards for earning rewards that are directed towards travel-related savings.

    Cash Back Credit Card: A cashback credit card is the one that gives you a certain sum of your money back that is spent while making purchases with the card. The majority of cashback rewards schemes are basic. Instead of points, you'll earn a portion of your money back. The percentage varies categorically as per the bank’s policy.

    Rewards earned:

    Travel Credit Card: The rewards earned on a travel credit card are in the form of air miles or reward points that can be converted into travel-related savings.

    Cash Back Card:  The reward points are called cash points, each cash point holds a certain money weightage and on reaching the minimum threshold, you can successfully redeem your cash rewards earned.

    Pros:

    Travel Credit Card: Below given are the many benefits of a Travel Credit Card:

    • Welcome Bonus: Travel cards offer a considerable welcome bonus which often covers the joining fee of the card and can be redeemed on your next travel-related spending.
    • Insurance: You get many travel insurance and covers with Travel Credit Cards such as air accident cover, overseas hospitalization cover, baggage insurance, etc.
    • Zero lost card liability: Many Travel Credit Cards provide the benefits of zero lost card liability if a lost card is reported within 24 hours of such mishap.
    • Lounge Access: You can get many domestic and international lounge access every year with top credit cards. Lounges are much more comfortable than common waiting areas.
    • Dining Benefits: A travel credit card also covers dinings benefits and discounts at designated restaurants across the globe.
    • Hotel stays discounts: With a travel credit card, you can get hotel stay discounts and complimentary night stays at participating restaurants across the world.
    • Air Miles: Air miles are a form of reward that can be earned on spending made with a travel credit card. Air Miles can be used to get subsequent air ticket discounts.

    Cash Back Card:  A Cash Back Card has the following benefits:

    • Joining Bonus: Cash Back Credit Cards offer considerable joining bonuses as cash points which can further be used while redeeming the cashback.
    • Simplicity: The best feature of a cashback credit card is its simplicity to use. A cashback card is pretty straightforward to operate.
    • The variety available: A cashback credit card is of three types: Flat rate, tiered cashback card, and Rotating cashback. Users can choose among the available types as per their needs and suitability.
    • Low fees: Most Cash Back Credit Cards have little to no fees and APRs which makes them cost-effective & Pocket-friendly.
    • Real-money rewards: One of the major benefits of a cashback credit card is the fact that the rewards can be earned in the form of real money.

    Cons:

    Travel Credit Card: Despite having a lot of benefits, a travel credit card may have the following drawbacks:

    • Higher fees: Travel credit cards provide premium benefits and hence they are comparatively expensive and have higher joining and renewal fees.
    • Complex: Travel credit cards provide a huge number of benefits and deals with their partnered brands making it a little difficult for the cardholder to grasp every offer easily.
    • Does not cover all expenses: Even though it provides several advantages, still a travel credit card does not cover all travel-related expenses.

    Cash Back Card: A Cash Back Credit Card has the following downfalls:

    • Withdrawal Limits: On every Cash Back Credit card there is a minimum withdrawal limit that is required to redeem the cash points.
    • Fewer Benefits: A cashback credit card offers cash points and accelerated cash rewards, but that is pretty much all it does. It does not have a wide range of benefits like a travel credit card.
    • Earning Caps: You cannot endlessly earn cash points on your purchases, with cashback credit cards there is an earning cap on how much cashback can be earned during a defined period.
    • Expiration period: The Cashpoints earned with a cashback credit card expires within 2-3 years (as per the bank’s policy). If you do not reach the minimum withdrawal threshold before the expiration date, all the points go to waste.

    Best cards available:

    Travel Credit Card: Some of the top Travel credit cards available are:

    • Citi PremierMiles Credit Card
    • HDFC Regalia Credit Card
    • IRCTC SBI Card Premier

    Cash Back Card: Some of the top Cashback cards are:

    • HSBC Cashback Credit Card
    • Citibank Cashback Credit Card
    • Paytm SBI SELECT Credit Card