Confused between travel credit cards and cashback credit cards as to which should you choose? Not to worry, we are here to help you out with it. In this article, we have covered everything about both types of credit cards that is there to know. But before you begin with it you need to clear your head by analyzing your needs and spending habits so that it becomes easier for you to choose from these two types of credit cards. Keep reading to kick start your research.
What are Cashback Credit Cards?
Cashback credit cards are those credit cards whose incentives revolve around the percentage of cashback of your expenditure. In more simpler terms, while you use your cashback credit card to make a purchase a certain percentage is reversed back to your account in the form of cashback rewards. The most popular cashback credit cards as of now are Amazon Pay ICICI Bank credit card, Axis Flipkart Credit Card, HSBC Cashback credit card, and so on.
Benefits of cashback credit cards:
Here are some of the reasons why you you should consider taking a cashback credit card:
Cashback credit cards are mostly entry-level credit cards that means either they are lifetime free credit card or have an affordable membership fees.
The cashback is directly credited to your account which means there is no hassle in the reward redemption.
Cashbacks never expire as compared to other types of rewards you earn on a credit card.
They are ideal to begin your credit journey with as you will get a hang of it and you will understand how a credit card works.
You can easily build your credit score with it.
Disadvantages of Cashback credit cards:
Here are some reasons indicating why a cashback credit card won’t be an ideal choice:
The rewards program on this type of credit card is limited.
You won’t be able to enjoy other benefits like travel benefits, insurance benefits, or entertainment benefits.
What are Travel Credit Cards?
A travel credit card is the one that allows you to cut down your travel expenses and thereby helps you to Airmiles or reward points depending on which type of travel credit card you have. There are co-branded travel credit cards and generic travel credit cards as well. You can choose the one as per your need and spending habit. Whenever you make a travel expense with a travel credit card you will earn either Airmiles or reward points. Some of the popular travel credit cards are Air India SBI Signature Credit Card, MakeMyTrip ICIC Bank Signature Credit Card, Yatra SBI Credit Card, etc.
Benefits of travel credit cards:
Here are some of the reasons why you should take a travel credit card:
A travel credit card comes between the rage of entry-level credit cards and super-premium credit cards, you can avail of a travel credit card as per your requirement.
You get a wide variety of benefits apart from the travel benefits on this type of credit card.
You get to enjoy sign-up bonuses and additional perks of the travel credit card.
Disadvantages of travel credit cards:
Here are the reasons why you should avoid taking a credit card:
If you truly want to enjoy the benefits of a travel credit card, then a travel credit card will cost you more than you planned to spend.
Higher chances of defaulting on credit card bill payments thereby leading to higher chances to fall into a debt trap.
Can either build your credit score or impact it negatively depending on your usage.
Bottom Line:
With a parting thought, we hope that from the above information you might have gotten an idea of travel credit cards and cashback credit cards and about their pros and cons. After identifying your needs and spending habits it must be clear which type of credit card matches them. Having the right credit card is the only way you can maximize the benefits of your credit card.
Additional Reading: Is It Good Or Bad To Pay Rent Using A Credit Card?