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Should I Get a Cash-Back or Travel Credit Card?

By Nathan Hamilton – May 6, 2017 at 8:59AM

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Find out which card type may make sense for you.

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Looking at overall averages, the answer to "what type of credit card should you get," may be simple to answer. No doubt cash is king and many cardholders prefer cash back to travel rewards. But we need to dive deeper to better understand budgeting habits to provide a better answer.

In the video segment below, The Motley Fool analysts Nathan Hamilton and Michael Douglass answer a user-submitted question about what type of credit card may be best to carry, cash-back or travel.

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Douglass: Dylan asks, "What's better, travel or cash-back credit cards?"

Hamilton: It depends on your personal situation. I would look at what your budget is. Get a card that fits the majority of your spending needs. For most people, it doesn't make sense to have several credit cards, each for a niche category that doesn't represent a predominant amount of our budget, because there's not much extra rewards you're going to get from something that's 5% of your budget. So, go to where you can earn the most rewards. If that is a cash-back card that offers 2% or 1.5%, if it's a travel card where you spend heavily on travel and you get three points per dollar, that makes sense in those scenarios. But, I wouldn't say any card is better for any person. It just depends upon what you're budgeting for.

Douglass: Yeah. And fortunately, again, a little shout-out for fool.com/creditcards, we have lists of both the best cash-back cards and the best travel cards. In fact, we have a list of best overall credit cards for 2017. Depending on your personal circumstance, they may or may not be great for you. Here's the thing, when you're looking for offers and you're looking at credit cards, the important thing to do online is do your research, get a lot of information. We've got a wealth of it at fool.com/creditcards. That can at least help you on your journey. We would never want you to use it as your only source. We don't believe in using anyone as your only source. You should look around and find a lot of different things online that work for you. But, it's a good starting point, it's certainly one that's worked for us.

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