Inside the world of credit cards
Since the arrival of credit cards, it’s almost impossible to find someone who doesn’t use them. In a world where cards are so embedded in daily life, it can sometimes be hard to choose one among the vast array of options available on the market.
With this in mind, there is a lot of talk these days about rewards credit cards and miles cards. If you’re also feeling lost among so many options, keep reading this practical guide to understand which is the best choice!
Remember, understanding the differences between them is crucial, so you don’t end up choosing a card that doesn’t provide you with the maximum benefits!
What Are Rewards Credit Cards?
Rewards cards are the favorites at the moment. That’s because these cards give rewards for your spending. This means that the more you spend in the categories defined by your card, the more benefits you will earn.
These benefits are responsible for offering prizes like discounts and even cashback. These benefits are extremely welcome, especially because they allow you to make your money go further.
Among these benefits, the most known are cashback and miles.
Cashback Credit Cards: Is It Worth It?
How Cashback Works
Cashback works in a straightforward and intuitive way. It’s a percentage of your money that returns to you on specific purchases. Over time, this percentage can accumulate, allowing your money to grow, and potentially leading to much greater savings.
Who Should Choose Cashback?
If you have a high volume of everyday purchases and fixed expenses, this might be the ideal card for you. Depending on the credit card, some categories of spending are defined as higher-return categories.
Thus, you can accumulate significant cashback on expenses like gas, groceries, and other day-to-day purchases.
Cashback Pros and Cons
Cashback credit cards value your everyday spending the most. This means that with a rewards card, you can receive cashback and other benefits for purchases like gas, groceries, dining, clothing, and more! This is a great advantage.
However, this type of card has, for example, some category limitations. Therefore, it’s unlikely that you’ll earn cashback from all your purchases.
Miles Credit Cards: Ideal for Travel Lovers
How Miles Accumulation Works
Miles cards convert your daily spending into points, which can later be exchanged for airline tickets, hotel stays, class upgrades, and even exclusive experiences. The accumulation happens proportionally: for every dollar or real spent, you earn a specific amount of points or miles.
Another advantage is the partnerships with airlines. Many cards are part of loyalty programs like Delta SkyMiles, which broaden the redemption possibilities. Additionally, frequent promotions offer double or even triple miles for specific spending categories like travel and dining.
Who Should Opt for Miles?
Miles cards are ideal for people who travel frequently, either for work or leisure. They are also recommended for those willing to plan ahead, as the best ticket deals are usually available well in advance.
Furthermore, if you have fixed expenses that can be paid with the card, like utility bills or even grocery purchases, you can turn these expenses into miles without altering your monthly budget. It’s a strategic choice for those who want to travel more while spending less.
Miles Credit Cards Pros and Cons
Miles cards offer attractive benefits, such as the ability to accumulate points for free trips, class upgrades, and extra perks like access to VIP lounges and travel insurance.
However, it’s important to consider the downsides, such as generally high annual fees, the limited validity of miles, and restrictions on redemption availability, which may require more flexibility in planning. Despite this, for frequent travelers, the benefits can outweigh the challenges, making these cards an excellent choice.
Cashback or Miles: How to Choose?
To choose between miles and cashback, there are a few things to consider. First, it’s important to evaluate your lifestyle and spending habits to understand where your expenses are accumulating.
Also, it’s wise to compare the fees and benefits of each card to see which one will benefit your lifestyle the most.
Summarizing
Cashback and miles cards have their differences and particularities. It’s undeniable that both have numerous qualities. However, to find the best one for you, an analysis of your spending habits is necessary! Research the ideal card now and start earning rewards!
