Cashback Credit Card vs Points
Last Updated : June 15, 2021, 12:08 p.m.
Credit cards are one of the savings modes for many individuals. People use credit cards not only to get a high credit limit but also to earn cashbacks and points. The offers on the credit card help the individual to save a lot of extra bucks from the day-to-day expenses. You can earn cashback on various products and accumulate points using a credit card. You can later redeem those points on the official shopping website of your respective credit card . But many individuals are confused between the Cashback Credit Card and Points, which benefit can be more fruitful to them. So, you must understand the difference between these two benefits and see which one is easy to earn and which one saves more.
Comparison of Cashback Credit Card and Points
You must compare these two benefits in the table given below and see which feature of the credit card will save some extra money from your expenses.
| Basis of Difference | Cashback Credit Card | Points |
|---|---|---|
| Meaning | Most of the credit cards have cashback offers and if the majority of deals are available as cashback on that card, then that card is known as the cashback credit card. You will get a refund of a certain percentage on making a transaction depending upon the offer. | Points are accumulated on making a certain minimum transaction from your credit card. Points can be in the form of Reward Points, Air Miles Point, JP Miles Point, Club Vistara Points, and many others. They are redeemable on the brands from which they are earned and the points can be redeemable on the official website of the respective credit card. |
| Accrual | The cashbacks are of two types. Sometimes they are reflected immediately into the account and sometimes it takes 90 days to get reflected into the individual’s account. | The points are credited immediately as soon as you make the transaction. They accrue after an individual makes a minimum transaction. |
| Redemption | You cannot redeem the cashback because they are credited to your account directly. | The points are redeemable on the shopping website of the respective bank from where you can buy goods from various categories. |
| Offer | There is a fixed percentage of cashback for every offer available on the credit card. | The points are collected when the individual makes a minimum transaction according to the point offers and there is no fixed percentage for the points. |
| Example | Get 20% cashback on a minimum transaction of ₹5000. | Earn 3 Points on spending every ₹100 at grocery and departmental stores. |
How Cashback Credit Card and Points Works?
If you have a cashback offer of 20% on mobile phones with a minimum transaction of ₹5000 and you have bought a mobile phone worth ₹10000 then you will get a cashback of 20% that is ₹2000. You will pay ₹10000 at the time of making the transaction and the cashback will be credited immediately or sometimes after 90 days to your account. The number of days might differ according to the offers.
If any of your credit cards has an offer to earn 2 points on every ₹100 on mobile purchases and you have bought a mobile phone of ₹10000 then you are entitled to earn 200 points. These points are redeemable on the official reward point redemption website of your respective credit card.
Conclusion
You have seen the difference between the cashback credit card vs points and now you can figure out which benefit can be more fruitful. On the other hand, there are varieties of credit cards that have both offers and allow you to save some money on various transactions.