Cash Back vs. Rewards Credit Cards

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Ah, the sweet rewards of using credit!

Not only do you get immediate gratification with the buy now-pay later plastic, but now, many credit cards offer rewards and incentives for using their card to make purchases. You can get cash back, or gift cards, or reward points that you can spend on merchandise or services from various merchants. There are also cards that allow you to designate your ‘cash back’ points to a charity sometimes called affinity cards and those that put your cash back into a special savings account for college.

Great deal, right? You spend your money and get something in return. The catch is, of course, that youre paying interest and card fees to get your cash back rewards. But if youre going to be using the credit card anyway, you might as well get something back out of it, right?

Most cash-back cards give you 1-2% cash back on most of your purchases. Youll get a check at specified periods for the amount of your rewards cash. You can cash the check and spend the money on anything you want.

Reward cards give you 1-5 reward points for every dollar that you spend at different merchants and types of merchants. Most pay...

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