Submitted by admin on Thu, 06/16/2011 - 03:26
A rebate credit card or a cash back credit card can be considered as a type of rewards card. However, it is a bit different from any other types of reward cards. In case of reward credit cards, your payments to the card issuer is refunded in kind. In case of other reward cards, the consumer will be rewarded through specific merchandise, points, miles, gift certificates, etc.
While choosing between a rebate credit card and a rewards credit card, here are few things which you should keep in mind:
- Requirements for cards: In order to reach the higher tier, you will have to make more purchases using your rebate cards. It is same with rewards card as well. In order to get to the next increment of points or miles, you will need to use it more. This will lead to unnecessary spending at times. If you don’t plan your purchases properly, it will lead to a financial crisis.
- Caps on the cards: In case of a rebate credit card, there will be a cap on earnings for the year which may keep the value of the cash you can get back at a low level. However, you could have earned more on similar purchases if you had gone for any other rewards card.
- Exclusions on cards: Whether it is a rebate card or a rewards card, there will be certain exclusions in both the cases. In addition to the exclusions, purchases from some of the stores or certain items may be excluded. If you purchase items from such shops or buy those excluded items, then you won’t be able to claim cash back or other rewards as associated with the cards.
- Redemption charges on cards: In case of travel reward cards, in order to claim/redeem your miles, you will have to pay a fee. Apart from that, there may be penalties for turning in miles close to the travel date. Sometimes, you can be even charged for deciding to not use the ticket or for involving an airline staff for your booking.
However, it has been noticed that you can get more value back in case of reward cards compared to that of a cash back card (rebate card).