The Case for Cash Back Credit Card Rewards

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Cash back is simple and convenient. Can you say that about your travel rewards?

Any credit card rewards expert is sure to tell you the key to maximizing your return is with a curated collection of points and miles cards. That's because smart travel redemption is the best way to optimize your per-point value.

As potentially profitable as a good travel rewards card can be, however, they're simply not for everyone. For one thing, if you don't travel much, you're highly unlikely to get good value out of your rewards. But being a homebody isn't the only reason to choose cash back credit card rewards over points or miles.

At the end of the day, your credit card rewards are only as valuable as they are useful. And cash back cards can show those points cards a thing or three about being useful. Let's take a look.

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Redeeming cash back is easy

Perhaps the most compelling reason to go with cash back cards is that their rewards are extremely easy to redeem. In most cases, you can simply redeem your cash back rewards directly into your bank account or as a statement credit to put toward your credit card bill.

Although some issuers will have minimum thresholds for redemption -- usually around $25 worth of cash back -- others allow you to redeem any amount. A number of issuers will even let you set up your cash back to redeem automatically at preset intervals, making it entirely hassle-free.

In contrast, rewards points usually need to be transferred to airline or hotel loyalty accounts for the best redemption values. As a matter of fact, redeeming your credit card points for cash is typically a poor option that provides less than $0.01 per point.

Cash back rewards are consistent in value

When you're working with travel rewards, the value you get for every point can vary significantly based on how you redeem them. Even if you transfer your rewards to the same airline, redeeming for a domestic flight versus an international flight could result in earning $0.01 per point instead of $0.04 per point or more.

In other words, if your travel rewards card earns 3x points per dollar on purchases, that could be the equivalent of 3% back on your purchases -- or more than four times that.

Cash back rewards, on the other hand, are consistent in value. Every time you redeem your cash back for a statement credit, you'll get the same return as you did before (barring any extreme policy changes from your issuer, which are exceedingly rare). So, if your cash back card earns 3% cash back at grocery stores, you'll always get that 3% value.

Rewards that turn into cash are as versatile as it gets

One of the biggest drawbacks to credit card points and miles is that your only real option for a quality return is to redeem them for travel. A few rewards programs will offer a flat $0.01 per point when you redeem for cash or gift cards, but those are the exception, not the rule. This severely limits the versatility of these rewards.

Cash back, however, is imminently versatile. Once you redeem your rewards into your bank account or as a statement credit, you can use it to buy just about anything. Want to use credit card rewards to pay your electric bill? Use your statement credit to cover the cost. Need to pay for those souvenirs on your next trip? Points and miles won't help you -- but cash back can.

Cash back cards can bridge category gaps

Another good reason to embrace a cash back rewards card or two is that you can often find cash back cards that provide bonus rewards in categories your points cards just don't.

For example, some of the best credit cards for streaming are cash back cards. If you spend a lot on streaming services each month, you could be losing out on value by using a points card that doesn't offer bonus rewards on those purchases.

So, even if you're not sold on cash back cards as your only strategy, they can be a worthwhile part of an overall maximization plan.

Keep it simple, silly

On the whole, humans are prone to overcomplicating things. But sometimes, the simple approach is the best one.

Sure, cash back rewards aren't necessarily going to give you the record-breaking redemptions that trend on social media. However, if you're looking for dependable, easy-to-use credit card rewards that don't take a spreadsheet to keep track of, then cash back is the way to go.

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