Consumer behavior is changing, and so are credit cards. Point-based reward programs are the hottest market trend now, but are they really better than cash back? This article will determine who takes the cake in a cash back vs. credit card points contest.

The debate between reward points and cash back is as old as credit cards themselves. While some users see more value in loyalty points and frequent flier miles, others stick to good old cash back. But the important question is, is one of them better than the other?

Let’s clear the air on this right away: both cash back and credit card points are phenomenal perks that you’ll want from any card you use. With that said, there’s no ‘right’ credit card works for all consumers. It all depends on what rewards you want and your spending habits. Here’s everything you need to know to decide which credit card rewards are right for you.

What are credit card points?

Credit card points, aka reward points, are a part of customer loyalty programs. These points are usually worth more than their ‘money equivalent’ and can be spent in many ways.

Common redemption options for credit card points include airline tickets, entertainment experiences, hotel, and restaurant bills, and retail purchase vouchers. Unlike cash back, credit card points don’t offer a fixed value. How much each point is worth depends on your loyalty tier.

For example, the ‘gold’ holders of a certain credit card can redeem each point for one cent (or other reward equivalents like airline miles), whereas the platinum members can redeem the same point for 1.75 – 2 cents. What tier you’re on in a credit card program entirely depends on your credit score and the kind of annual fees you’re willing to pay.

How do credit card points work?

One of the leading arguments against credit card points is that they are difficult to manage and expire frequently.

Unlike flat cash back, credit card points work according to different redemption policies that the card company decides and the businesses they choose to partner with.

Aside from the tier disparity, credit card points are usually not the same for two different redemption options either. One loyalty point on your card can be worth different sums of money/equivalent benefits depending on where you’re spending it.

Let’s understand this better with the help of an example. Restaurant X has a better, longer working partnership with your credit card company than restaurant Y.

This can cause your credit card points to be worth more in restaurant X than they would be in restaurant Y. Now apply this to all the different hotels, airlines, cinema halls, etc., that your card company partners with.

This is exactly what puts people off credit card points. While they are worth more in terms of their material value, managing them can get extremely confusing.

Difference between cash back and credit card points

Complicated redemption policies are just one of the many factors that differentiate cash back from credit card points. Other key points of difference between them include:

How you can earn them

Most credit card companies (not Vital) offer cashback rewards only on high-value transactions that fulfill specific criteria laid down by the offering company. They are also only available on purchases made at specific outlets of partnering retail or lifestyle establishments. On the other hand, credit card points are offered on almost all purchases above the prescribed limit.


When the term ‘flat’ is used to describe cash backs, it usually refers to the consistent rate offered on all eligible transactions. Their value, too, of course, remains constant irrespective of how you spend them. The rate at which credit card points are offered is always subject to company policy, the loyalty tier, and the transactions.

Validity period

Cash back is usually just credited to your bank account. How and when you choose to spend it is completely up to you. On the other hand, credit card points are only valid at certain participating retailers and are only valid until a certain period (which is decided by the card company).

Luckily, you’ll get cash rewards that don't expire with Vital Card, meaning you can hang on to your cash back and rewards points as long as you need. That eliminates the need to worry about the validity period for good.

Added benefits

While cash back is always an excellent perk, credit card points are more than just one-time rewards. They are usually a part of a larger loyalty program that entitles customers to several benefits at different partner businesses around the world.

The benefits can be anything from a free/discounted streaming subscription to exclusive member privileges at selected airlines and hotels. So, both rewards points and cash back are fantastic – but they vary in the benefits they offer.

Maximum limit

Most credit card companies have a maximum limit on the amount of cash back you can earn on each transaction. However, at Vital, we don’t limit this. You can earn 1.5% cash back on all spending with no limit.

On the other hand, credit card points are purely based on the transaction amount and the business at which it is carried out. There might, however, be a limit on the redemption of these points.

What’s right for you?

Now that you know the pros and cons of each reward, how do you decide what’s best for you?

Ultimately, there are plenty of benefits that come along with both credit card points and cash back rewards. The best way to go is finding a card that offers both in the form of forever rewards. That’s where Vital Card comes in.

Some rewards need to be redeemed within a certain period to avoid becoming invalid. Imagine accumulating points for an entire year only to discover that the company you planned to spend your points with has ended their partnership with your credit card company. That’s why you’ll always want to opt for forever rewards – card perks that don’t expire.

It is also good to check the list of partnering businesses before finalizing a credit card company. For example, if you spend most of your money on Amazon, it’s better to get a credit card with more credit card reward points for shopping on Amazon than one partnered with Walmart.

Your credit company will also have different value-based programs that entitle you to different benefits. A ‘frequent flier’ program, for example, might offer you more points on airline ticket purchases as opposed to another one that compensates for retail purchases better. You should choose a program and a subscription tier based on your spending habits.

While the points may seem extremely lucrative and incentivizing, we don’t recommend overspending just to earn a specific reward. Credit card reward points are not worth the debt you rack up to reach the following credit card rewards tier. It is always recommended to tailor your choice of rewards program based on your most frequent purchases and not vice versa.

Looking for a new card company?

While rewards programs are a great way to enjoy benefits on your credit card purchases, most companies are known for charging hefty annual fees for the subscription. This is where Vital edges out the competition.

With us, you can enjoy unlimited 1.5% cash back on all spending and a wide range of exciting credit score rewards for absolutely no annual fee. You also have the opportunity to scale up your cash back rewards with recurring referrals.

You can unlock 2% cash back for 3 months following 5 successful referrals within a 3-month period. You’ll also have the chance to unlock 3% cash back for 3 months following 10 successful referrals within a 3-month period. Successful referrals are people you invite to Vital who go on to get approved for the card. Learn more about recurring referral rewards at Vital Card.

Unlike other programs, our referral program entitles you to an unlimited cash bonus. Every time we gain a patron, you make money, no questions asked. Backed by state-of-the-art data protection systems and a world-class customer service team, ours is the only credit card you’ll ever need.


Credit Card Points | WalletHub

The 3 Kinds of Credit Card Rewards Programs… | CNBC

7 Ways You Can Lose Credit Card Rewards Points... |

Vital Card blog posts are intended for informational purposes only and should not be considered financial or any other type of advice.