Credit card rewards: Take the cash

Rubber band around rolled up money

Cash-back rewards, air miles, hotel deals and discounts at certain stores are just a few of the perks credit card issuers offer hoping to attract your business.

But what’s the best rewards program? Should you opt for cash rebates? Or set your sights on a free plane ticket?

We say take the cash.

Here’s why:

Many who once enjoyed free trips courtesy of credit card miles have found cashing in those miles has become a nightmare.

That’s because point redemption levels are a moving target. And in some cases the redemption level is double or triple what it was when the program started, making it tougher to redeem.

Then there are blackout dates, restricted flights and expiration dates on miles that make cashing in accrued miles quite a challenge. Not to mention frustrating.

On the flip side, cash-back cards like the new American Express Blue cards and Citi Dividend Platinum Select Mastercard offer appealing cash-back rates. Blue Preferred touts up to 6% (depending on the type of purchase) and Citi Dividend offers up to 5% (depending on the type of purchase).

There’s also tricky language buried in some travel card’s fine print. For instance, if you carry the Miles by Discover Card and make two consecutive late payments, you could forfeit your accrued miles.

And don’t forget the obvious benefit to cash-back cards.

You can use the cash anywhere, anytime, instead of having to cash in miles on specific airlines at specific times.

However, credit cards that offer mile rewards aren’t necessarily all bad. If you’re a frequent flier of a particular airline, a mileage-earning travel card just might be for you.

Bottom line: Before you apply, make sure to weigh all the options. Don’t be lured solely by the thought of a free ticket that you might not ever earn or use.

Compare the best rewards credit cards in our extensive database.

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