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When is a Cash-Back Credit Card Better Than a Travel Card

Finding the best credit card isn’t always easy. There are thousands of credit card options on the market, and, even if you’ve narrowed your choices down to a handful of cards, the final decision isn’t always clear.

For many people, rewards are the most important aspect of a credit card. Sometimes, the decision comes down to a card that offers cash-back rewards and a card with travel rewards. If you’re ever confronted with this dilemma, here are three reasons why cash (back) is king.

1. It’s simple

You can often get more rewards from a travel credit card, at least when it comes to the sign-up bonus.

However, “it can be confusing and takes more effort,” says Matthew Goldman, founder of Wallaby, an app that helps consumers maximize credit card rewards. He says, “That’s why 64% of Wallaby users say they prefer cash back as their favorite type of rewards.”

With travel credit cards, you have to learn the ins and outs of how to redeem your rewards. In some cases, it can be as straightforward as redeeming rewards for a statement credit on a travel purchase. Even then, however, you and the bank may disagree on what should be considered a travel purchase.

Ultimate simplicity is getting cold hard cash deposited into your checking account and using it however you want to use it.

2. It’s flexible

If you rack up rewards with an airline or hotel credit card, you’re generally restricted to using your points or miles with that loyalty program. Even with general travel cards like the Barclaycard Arrival Plus, you’ll generally get the best redemption rates by using your rewards to pay for travel.

“When the math is considered, the average consumer would have to do an ungodly amount of traveling to get more value out of their [travel] card,” says Trent Silver, CEO of Nerdster. If you’re only traveling once or twice a year, your rewards may sit in your account for a while before you can use them.

With cash back, on the other hand, you have ultimate flexibility. “If you desire to travel with your rewards, then use the cash back you received” to pay for travel, says Silver. But if you want to use the cash back to, say, buy a television or pay for home improvement instead, you can do that too.

3. The ongoing rewards are just as good, if not better

The best travel credit cards come with big sign-up bonuses, many of them worth more than $500 in free travel. However, these cards usually come with high annual fees, and their ongoing rewards rates are no better than what you could get with a good cash-back card.

For example, the Citi Double Cash and the Capital One Venture both offer the same ongoing rewards rate, but the Venture charges an annual fee. Of course, it also comes with a big sign-up bonus, but, over time, that annual fee will eat into your rewards value.

In other words, a travel card may provide more short-term value, but, in the long run, you may get more value out of a no-annual fee cash-back card.

Is a cash-back credit card right for you?

In the end, the right rewards program depends on your spending habits and your need for the rewards.

“The average consumer probably doesn’t … travel frequently enough to earn more on a travel card than the equivalent general amount of credit card spend on a cash back card,” says Kerri Moriarty, head of development at Cinch Financial, an app that helps you optimize your everyday finances. “You’re better off earning more on a cash back card and using the cash toward travel for your once or twice a year big vacation.”

Also, if you’re not a big spender, chances are you’ll never spend enough money to make up for a good travel credit card’s annual fee.

That said, if you do frequently travel, especially internationally, using a travel credit card could score you great flight options that would cost much more if you were to pay in cash.

Do your due diligence

Before picking a credit card, ask yourself what your most important priorities are when it comes to rewards. For example, if you want flexibility in redeeming your rewards, a cash-back credit card may be your best bet. The same is true if you probably wouldn’t spend enough on the card to make up for an annual fee.

If this is you, check out the top cash-back credit cards to find one that fits your spending habits the best.

If, however, you have a lot of travel plans in the future, know your way around loyalty programs, and have more than a few travel hacks up your sleeve, you may want to consider a travel credit card.

If you find yourself in this camp, shop around for the best travel credit card based on your travel plans and preferences.