Cashback Vs Reward Point

When offered to select between paper money and credit card, the latter is the most preferred option. And why not, considering the benefits of credit cards such as easy of payment irrespective of the transaction amount, security features,,  and most importantly the two most important benefits i.e. reward point and cashback. Still many of us are confused which credit card to choose, reward point or cashback? However the most important criteria to be considered is your spending behaviour.

What is cash back

Depending on the specified spent amount, small percentage of cash back is credited in the account of the card holder and can be seen in the credit card statement.
However there are certain terms qualification criteria to avail this cash back. Some companies offer cash back only when the card is used for utility bills for electricity, telephone, buying movie tickets only in multiplexes. Some cards also carry monthly cap on cash back and annual charge and joining fee. In western countries like United States of America or United Kingdom companies also offer their customers air miles/points instead of cash reward. You must know how to deal with credit card dispute

Reward Points

On the other hand reward point is totally different in terms of the benefits offered. Card holder gets certain points depending on the amount spent in the form of coupons or vouchers. Usually 1 point is earned when spend is between Rs. 100-150. The points earned also depends on the type of card used – gold, platinum or privileged card.
And these points are redeemable only before a certain period and specific outlets to make purchase in the form of gift voucher, food coupons, merchandise vouchers etc. Most importantly these card do not have annual charge or joining fee.

So cash back are ideal for people who spend heavily whereas reward point should be opted by people who are careful spender. Also see credit card