Forget Travel Rewards. Here Are 3 Reasons a Cash Back Card Could Be Better for You

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Lots of people love the idea of travel rewards cards. It sounds amazing to travel for free, or close to it, by paying with points instead of cash. And if you always have a trip coming up, travel cards will live up to the hype.

But travel cards aren't right for everyone. It can be hard to figure out how to get the most out of them, and they're only valuable if you travel often. The best cash back cards, on the other hand, can work well for just about anyone.

If you're deciding between which type of card to get, keep reading to see why cash back could be the way to go.

1. Cash rewards are easier to use

One of the complaints I hear most often about travel cards is putting rewards to use. People read amazing stories about using points to fly in business class or stay at luxury hotels. Once they have a travel rewards card, they realize that's not as easy as it seems.

You can do it, but you'll need to learn the ins and outs of your card's travel rewards program first. These programs often include all kinds of ways to use your points. You may be able to use your points in the card issuer's travel portal or transfer them to various airline and hotel partners.

If that sounds exciting to you and you'd love to learn more, then travel rewards cards could be a good fit. If you'd rather not figure out when to use a travel portal and when to transfer points, you may want to stick with cash back cards.

In contrast to travel cards, cash back cards are as straightforward as it gets. When you want to use your cash back, you simply go to the rewards section of your account and redeem it. Card issuers typically give you the choice of getting cash back as a statement credit on your credit card bill or a deposit to your bank account.

2. You don't need to wait to redeem your cash back

Cash back can help you save money on a regular basis. Most of these credit cards deposit the cash back you've earned once per month, although there are a few that deposit it every day.

If you earn $50 of cash back in a month, you can use that as soon as it's deposited to your rewards balance. You could turn that into a $50 deposit to your bank account to build up your savings, or you could transfer it over to an investment account.

Travel rewards typically only save you money when you're going on a trip and have travel expenses. Between trips, they don't do you much good. This may not be a problem if you travel regularly. But it could be if you're only an occasional traveler or if you start dialing back your trips. That often happens to couples who have kids and don't travel as much as they did before.

3. Cash back cards have lower annual fees

There's a big cost difference between cash back cards and travel cards. Most cash back cards don't charge an annual fee, and the ones that do aren't too expensive (normally under $100). Cash back cards with annual fees tend to have higher cash back rates, too, which can make up for their cost.

You won't find many travel cards with no annual fee. There are a few, but they're light on benefits. Most travel cards charge anywhere from $95 to as much as $695.

To be fair, travel cards have benefits that can make up for their annual fees. For example, they often have spending credits that can save you money on certain types of expenses. But this also means you have more to manage to ensure you're getting your money's worth.

Travel cards and cash back cards both have their advantages. If you're looking for a card that's easy to use, that can save you money every month, and that doesn't charge an expensive annual fee, cash back is the better choice.

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