![]() Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. ![]() These benefits are typically hard to find with no annual fee cash back cards. If you take out a travel rewards card, you may also expect perks such as seat upgrades, free checked bags, priority boarding, access to airport lounges and travel insurance. Depending on the card you get, you might be able to transfer the reward points you earn to a partner airline or hotel loyalty program. Keep in mind that some of these offers require that you spend at least a predetermined amount within a given period. However, more often than not, reward points provide the best value when redeemed for travel through your card provider’s reward program.Ĭredit cards with points tend to come with better sign-up bonuses than cash back cards. Understanding how you can make the most of your reward points requires reviewing your card’s fine print in detail because the worth of points may vary based on redemption methods. For example, the Chase Sapphire Reserve Card comes with a $550 annual fee. To ensure you’re getting the most value for your money, you’ll need to determine if the points you earn offset the card’s annual fees. Most reward cards that offer a higher number of points per dollar come with annual fees. This convenient system simplifies the redemption process and ensures you don’t miss out on getting your cash back.Ĭredit cards with points might be worth it if you use them strategically. Some issuers of cash back credit cards let you set up automatic redemption by linking your bank account. The Citi Custom Cash℠ Card, on the other hand, provides 5% cash back on purchases of up to $500 in the top eligible spend category every billing cycle. For example, the Chase Freedom Unlimited credit card offers 5% cash back on travel that you purchase through Chase Ultimate Rewards and 3% cash back on dining. Getting a cash back card might also be worth your while if you opt for one that offers high cash back rates across categories in which you routinely spend. For example, while the Blue Cash Preferred® Card from American Express and the Savor Rewards Card from Capital One offer high cash back rates on category-based spending, both come with annual fees of $95 (waived for the first year with the Blue Cash Preferred Card). However, if you plan to get a cash back card with an annual fee, you need to determine if the money you stand to earn will offset the fee’s cost. Since you’re paying no annual fees, any cash back you earn is a financial win. You make purchases using the card and earn cash in return. If you sign up for a cash back card with no annual fees, getting it to work in your favor is simple. While reward cards with points tend to offer more value than cash back cards, getting one tends to be most beneficial if you’re a frequent traveler since card users typically receive this additional value by purchasing travel accommodations. Other ways to redeem reward points might include using them as statement credit, transferring them to airline or hotel loyalty programs, getting gift cards, shopping online or donating them to charity. That same amount of points is worth $70 if you use them to make purchases through and $60 when you use them to cover your card charges. ![]() For example, 10,000 Membership Rewards Points earned through the American Express® Gold Card are worth $100 when you use them to book flights through American Express Travel. ![]() On the other hand, reward points tend to offer the most value when you use them to make travel bookings through your card provider's or its partners’ reward programs. Several cash back cards also allow you to utilize your cash back to shop online and get gift cards. Most cash back cards let you use your cash back as statement credit or transfer it to your bank account. Redeeming cash back is fairly straightforward. However, if you spend the same $100 on a card that comes with 2x points on all purchases, the value of those 200 points may vary greatly depending on which card you have and how they are redeemed. For instance, a 2% cash back card offers $2 cash back for every $100 you spend. Cash back is not the same as reward points while the former translates into a corresponding dollar amount, the latter does not.
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