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Prepaid debit cards are plastic cards purchased by a consumer for a specific... ...more
That depends on how much flexibility you want with your rewards. In general, you will find that cash back cards will give you less overall, but rewards cards limit the number of ways you can redeem your perks. Therefore, it's up to the cardholder to decide which is more important.
Cash back cards provide a percentage of purchases back to the card owner. The rate varies vastly from company to company, generally around 5%, and is usually limited to purchases from certain approved retailers. In some cases, the card provides greater levels of incentive for favored retailers, often up to 20%. However, it is rare to find a card that will give cash back on all purchases made with it, and the percentage rate is usually 1 or 2%.
Rewards cards tend to provide more in a strict dollar-to-dollar comparison, but that dollar value can only be recouped in a specific way, such as airline miles, gift certificates, points, and gas rebates. To use frequent flier miles as an example, a common reward is 1 mile for each dollar spent on the card. If you used the card to purchase groceries every week (let's assume $100 per week), then you will have accumulated more than five thousand miles within a year. If we were to instead assume a cash back card that is providing 5%, then that would be $250 cash back throughout the year, or $5 each trip to the grocery store. Since airfare for a five thousand mile trip would almost certainly cost more than $250, the airline miles are by far the better value for someone who travels frequently.
If you want to get the best value for your purchases with a credit card, then choose a rewards card that provides something you are sure to use. If you prefer the freedom of having a little extra cash back from your purchases that you can use as you see fit, then go for the cash back card.
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