Cashback or Rewards Points: Nowadays, people's expenses are rapidly increasing. To find relief, people are adopting smart strategies and are increasingly looking for cashback or reward points. Indeed, credit cards have become a smart way to save money on everyday expenses like online shopping, groceries, travel, and dining. For most people, the biggest benefit from these cards comes through cashback and reward points. Both offer savings, but they work differently. If you choose the right option based on your spending, you can save significantly each month. Let's explain the difference between cashback and reward points and which one is best.

What is cashback?

The meaning of cashback is simple: you spend and get a portion of that back. For example, if a card offers 5% cashback, you'll get 5% back for every 100 you spend. This cashback is often adjusted on your credit card statement or added to your bank account or wallet, reducing your bill.

When is cashback good?

Cashback cards are most beneficial for areas like daily groceries, petrol/diesel, online shopping, food ordering, and making payments for electricity, water, and phone bills. The value is immediately and clearly visible.

What are Reward Points?

When you spend with a credit card, you earn reward points. These points can be redeemed for various purposes, such as flight tickets, hotel bookings, shopping vouchers, gift items, and sometimes even to reduce your card bill.

Reward points don't provide a direct refund like cashback; instead, points accumulate on your purchases, which you can redeem later as needed. These points can help you earn benefits you might not want to pay out-of-pocket, such as airport lounge access, premium products, etc.

Which is better: cashback or reward points?

The answer depends on your lifestyle and spending habits. Cashback is good if you want direct, immediate, and guaranteed savings. Reward points are a good option if you travel frequently and want to save on flights, hotels, or premium products.

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