Credit Cards: Cashback vs. Rewards

What makes a credit card more rewarding? Is it getting your money back in the form of cashback or earning rewards points that you can use to redeem cash vouchers and other merchandise? Read on to find out more about how they measure up against each other.

Are cashback credit cards really all about the money?

What Is A Cashback Credit Card?

A cashback credit card is a credit card that offers you a rebate called 'cashback' by your issuing bank. Cashback (a.k.a. ‘cash back’) is an incentive offered by banks for their credit cards in order to get you to spend more using the card. You will be refunded a percentage of the amount that you spend into your credit card’s account.

For example, the OCBC 365 MasterCard offers 1% cashback for the first RM1,000 every month and 0.5% cashback for subsequent amounts above RM1,000 that you spend with the card.

This means you receive RM10 cashback for the first RM1,000 and 0.5% of whatever you else you spend on with the card. So with that in mind, it’s not wrong to think of a cashback credit card as a permanent discount on everything you spend on.

What Should I Look For In A Cashback Credit Card?

When choosing a cashback credit card, make sure to get one that rewards you most for the most frequent spending category you will be using it for. Some cards like the Hong Leong WISE Platinum let you choose the categories you get to enjoy its 10% cashback on. Others like the Shell-Citi Gold Card reward you for pumping petrol at Shell Stations or give you unlimited 1% cashback for online transactions like the OCBC Titanium MasterCard.

You can also refer to this list of cashback credit cards that we’ve picked out for you:

See also: How To Compare Cashback Credit Cards

What Is A Rewards Credit Card?

A rewards credit card is a credit card that earns you more rewards points from your issuing bank. Rewards points are another form of incentive offered by banks that are calculated based on the amount of money you spend with your credit cards. By collecting rewards points on all your transactions, you can redeem different types of products, such as electronics, furniture, shopping vouchers and other products or services offered by the bank.

What Should I Look For In A Rewards Credit Card?

Just like cashback credit cards, there are different tiers for the amount of rewards points that you can earn based on the spending category. So again, you should always choose a rewards credit card that gives you the most value based on your spending habits. And if you’re smart with your spending, you can continuously redeem points to get more value for your ringgit.

Check out these rewards credit cards that we’ve picked out based on the spending categories:

So which should I choose?

That depends on the type of spending you intend to use the credit card for and the type of incentive that fits you best! There are also different features that you also need to consider, such as the annual fees, airmiles conversion ratio and interest rates.

In some cases, a cardholder could prefer the Citi-Shell Gold Visa because they feel that the monthly income requirements are lower and that it is more convenient to get the cashback directly into their account. For those who prefer an Islamic credit card or feel that the monthly cap for amount of Shell fuel eligible for the cashback is too little, they may choose to use the Maybank Petronas Ikhwan Visa Gold Card-i.

Credit cards can be a very powerful tool to collect cashback or to earn rewards points on your spending. Check out CompareHero.my's credit card comparison tool to find yourself the best rewards or cashback credit card today!

By Julian M. Edwin

Julian is the Content Manager of CompareHero.my. He can usually be found reading up on the latest financial news, life hacks or money-saving tips.

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