Travel Rewards Credit Cards Vs. Cash Back Cards
Travel Rewards Credit Cards Vs. Cash Back Cards
In the realm of credit card rewards, the debate between travel reward cards and cash-back cards has long been a topic of discussion. I have had many people tell me “But I get cash back on XYZ credit card when I shop here”. While a cash-back offer may be enticing, the cash-back rewards you earn often are less than the dollar value of the travel possibilities you can earn by travel hacking. Let's dive into the world of travel rewards and explore how travel reward credit cards are a better choice.
Earn More Value Back
By using travel reward credit cards for your everyday purchases, you accumulate points or miles that can be redeemed for flights, hotel stays, car rentals, and other travel-related expenses. With the right strategy, you can unlock incredible opportunities to explore the world at a fraction of the cost (or free). Last year my family and I spent 7 nights at an all-inclusive resort in Jamaica completely free, including airfare. The total cost of our trip would have been $7,104. Most people who use cash-back credit cards do not earn $7,000 in cash back in 1 year. The points needed for the all-inclusive trip to Jamaica did not even take me a year to earn. To learn more about our trip to Jamaica check "My Unforgettable FREE Journey to Hilton Rose Hall, Jamaica". We recently traveled to Disney World for $1,414 including airfare, hotel, and 7-day park hopper park tickets. For both our Jamaica trip and Disney trip, I used a combination of hotel credit cards and airline credit cards to earn airline miles and hotel points. Our trip to Disney World would have cost close to $10,000 if I paid cash. Earning over $7,500 in cash back from debit cards would have been hard. A co-branded credit card can be more valuable than a cash rewards card. Cashback cards offer a minimal percentage back on your purchases, while travel rewards cards offer a world of opportunity. There are many types of travel rewards cards, such as airline cards, hotel cards, and general travel cards. Each travel card has its own benefits, earning free travel for your everyday spending.
Generous Sign-Up Bonuses
One of the most appealing aspects of travel reward credit cards is their lucrative sign-up bonuses. These bonuses often come in the form of a substantial number of points or miles after you meet a minimum spending requirement within a specified timeframe on a new credit card. Compared to cash-back cards, these sign-up bonuses can significantly boost your rewards-earning potential from the beginning, providing an excellent incentive to make the switch. The sign-up bonuses earned with travel reward credit cards make it possible to quickly earn enough points for a wonderful vacation. To learn more about how to maximize your sign-up bonuses check out our post here. Many credit card rewards programs offer bonus points at certain types of stores, such as grocery stores. If you take advantage of these bonus categories and purchase gift cards at stores within the bonus categories, for stores you frequent that do not offer bonus points, you can get the most value for your credit card points. Each rewards program will offer various reward points and bonus points.
Valuable Travel Benefits
In addition to earning points or miles, many travel reward credit cards offer a plethora of valuable travel benefits. These may include travel insurance, access to airport lounges, statement credits for TSA PreCheck or Global Entry, complimentary upgrades, free checked bags, no foreign transaction fees, and statement credits for various purchases (food delivery, travel purchases, etc). Some travel rewards cards issue a statement credit for travel purchases. These perks can enhance your travel experience and provide added peace of mind during your journeys, making travel reward cards even more enticing. While some travel cards do have an annual fee, they are still the best value for credit card benefits.
Opportunities for Elite Status
Some travel reward credit cards provide opportunities to earn elite status with airlines or hotel chains based on your spending and credit card. Elite status comes with exclusive perks, such as priority boarding, complimentary upgrades, late checkout, bonus points, and more. By strategically leveraging your credit card spending, you can fast-track your way to elite status and enjoy VIP treatment whenever you travel. Depending on the type of card, many hotel partners offer elite status just for having a certain travel rewards card. To learn more about how to use your travel reward credit cards strategically check out our post "Travel Smart: Choosing Your First Travel Rewards Credit Card and Begin Travel Hacking"
Don’t Wait To Start Using Travel Reward Credit Cards
Many people have reasons to wait to start using travel reward credit cards. Whatever their reasons are… they are missing out on earning free travel for the expenses they are incurring right now. Your expenses this month, next month, and this year can earn you free travel if you just start using a travel reward credit card for your everyday spending. How many new cards and welcome bonuses are you missing out on during that time? Delaying switching to travel rewards cards, is delaying your free or low-cost vacations. Travel hacking can seem overwhelming at first, but it takes just one travel rewards card to get started. To learn how to start travel hacking check out our blog "Travel Hacking 101: The Ultimate Beginner's Guide to Getting Started".
While cash-back cards certainly have their merits, travel reward credit cards offer more value than the cash earned from cash-back credit cards. From maximizing your travel potential and enjoying generous sign-up bonuses to flexible redemption options and valuable travel benefits, the advantages of travel reward cards are undeniable. If you're ready to embark on unforgettable adventures while earning rewards along the way, it may be time to consider making the switch to a travel reward credit card. Unlock the world of travel rewards and let your credit card take you places you've only dreamed of.