Should I apply for a Cash Back, Airline, or Travel Rewards Credit Card?

Finding the right credit card can be overwhelming. There’s a plethora of options available ranging from cask back, to sign-on bonuses, to low interest rates.
The most popular choices for consumers looking to get the most bang for their buck are cash back, airline miles and travel rewards credit cards. Each has their own purpose and each can serve the consumer if utilized well. Here’s some tips for determining which type of rewards card would be best suited for you.

Cash Back Credit Cards
Cash back credit cards adverts abound aplenty, and are typically the easiest to understand. Their methodology is quite simple: Make a purchase, earn a percentage of that purchase in ‘cash back.’ For example, if you spend $100 in a month with a 2% cash back bonus, you’ve earned $2 cash back.
These types of credit cards are best utilized by individuals who use credit for the majority of the purchases and pay off the card each month. This allows the consumer to maximize their cashback rewards.
The drawback of cashback rewards cards is that the ‘cash’ is typically given as a statement credit, and may take a couple of billing cycles to kick-in. In the example above, instead of paying the $100 bill, with the $2 cash back, your statement would only be $98.

Airline Rewards Credit Cards
Airline Miles are also another popular credit card rewards program. For each purchase, the consumer is rewarded with points (or miles) than can then be redeemed for future flights. This type of rewards card is recommended for individuals that travel on the same airline often and is popular among businessmen and businesswomen. Certain airlines, like Delta, offer priority boarding or Delta Lounge access in their terminals for cardmembers, easing some of the headaches that come with travel.
However, if you’re the type of traveler that doesn’t stick to one airline, or don’t fly often, airline miles can go to waste. There’s also the possibility that popular destinations and travel dates are blacked out because the airlines can make more money by selling full priced tickets during these times.

Travel Rewards Credit Cards
Obviously, this type of credit card is for those that like to travel. The best travel rewards credit cards often a variety of means for earning points as well as options to redeem those points. Options for redemption can include cheap flights, upgraded flights, upgraded hotel accommodations, and not foreign transaction fees to name a few.
Similarly, to cash back rewards cards, travel rewards credit cards are best utilized by individuals who make the majority of their purchases via credit and can pay off their statement each month.

The Verdict
Before choosing a rewards card, take into consideration your spending habits and your lifestyle. Remember to read the fine print about blackout dates or expiration dates on rewards points. Ultimately, make the decision that has the most flexibility and can be tailored to your goals.

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