Annual Income

Occupation Type

Salaried Self Employed

Company Name

City

Other City

Personal Details

First Name

Last Name

Mobile Number

Email ID

Date of Birth

Credit Card Holder

Yes No

Credit Card provided by Please Select Aditya Birla Allahabad Bank Andhra Bank Axis Bank Bajaj Finserv Bandhan Bank Bank of Baroda Bank of India Bank of Maharastra Canara Bank Central Bank of India Citibank Corporation Bank Dena Bank DCB Bank Federal Bank HDFC Bank HSBC Bank ICICI Bank IDBI IndusInd Bank IDFC Bank Jammu and Kashmir Bank Karnataka Bank Karur Vysya Bank Kotak Bank Lakshmi Vilas Bank Nainital Bank Oriental Bank of Commerce Punjab and Sind Bank Punjab National Bank RBL SMFG India Credit Standard Chartered Bank State Bank of India/SBI Syndicate Bank Tata Capital UCO Bank United Bank of India Vijaya Bank Yes Bank Others

I authorize Wishfin.com & its partnering banks to contact me to explain the product & I Agree to Privacy policy and Terms and Conditions.

Explore Credit Cards

In the ever-evolving landscape of personal finance, choosing the right credit card can significantly impact your financial strategy. Cashback credit cards and rewards point credit cards represent two distinct approaches to earning benefits on your everyday spending, each with its unique advantages. Cashback cards offer straightforward value with easy to understand redemption options, typically returning a percentage of your purchases directly to you as statement credits or deposits to your bank account. These cards often feature low or no annual fees and attractive introductory 0% APR offers, making them ideal for practical spenders seeking simplicity and immediate value. In contrast, rewards credit cards typically earn points or miles that can be redeemed for travel experiences, merchandise, or other benefits, often providing greater potential value for frequent travelers through premium perks like airport lounge access, travel insurance, and higher-value redemption options when used strategically. As we explore these two credit card categories, you'll discover which option aligns best with your spending habits, lifestyle preferences, and financial goals. After you choose which card type is most suitable for you, go on to check your CIBIL score for free  on Wishfin before you apply for the credit card. 

Comparing the Features of Cashback and Rewards Point Credit Cards

In the table given below, you can spot all the major differences between a reward point and a Cashback. After going through the table you can clear all your doubts.

Feature	Cashback Credit Cards	Rewards Point Credit Cards
Basic Concept	Return a percentage of purchases as cash	Earn points/miles on purchases for various redemptions
Redemption Process	Simple; automatic statement credit or direct deposit	May require navigating reward portals; sometimes complex
Value Proposition	Typically 0.75% to 5% of purchase amount	Value varies; can be worth more when redeemed strategically
Annual Fees	Generally lower (Rs. 499-Rs. 1,000)	Often higher (Rs. 1,000-Rs.10,000+)
Best For	Everyday expenses like groceries, utilities, fuel	Travel, premium experiences, brand-specific purchases
Additional Benefits	Limited premium perks	Often include lounge access, insurance, concierge services
Reward Flexibility	High; cash can be used for anything	Moderate; depends on redemption options
Expiration	Cashback typically doesn't expire	Points may expire if not redeemed within a timeframe
Complexity	Low; straightforward to understand	Medium to high; may require strategy to maximize
Milestone Benefits	Usually modest (e.g., e-vouchers)	Often more substantial (e.g., hotel stays, flight tickets)

Cashback Credit Cards: Advantages and Limitations

Advantages:

• Rewards are straightforward: No roundabout point systems; you get a clear percentage back on your purchases.

• Flexibility: Cashback can be used for anything, including clearing off your balance. 

• Best for everyday expenses: Great for utility bills, groceries, and fuel.

• Lower annual fees: Annual fees are often lower, and this makes it economical for people who spend moderately.

Limitations:

1. Lower earning potential: Cashback rates may be lesser compared to reward points in specialized categories. 

2. Limited bonuses: Cashback cards often lack premium perks like travel benefits. 

3. Capped rewards: Many cashback cards limit the amount of cashback you can earn monthly (e.g., Rs. 5,000).

Popular Cashback Credit Cards in India

Cashback SBI Card

• 5% cashback on online spends

• 1% cashback on offline transactions

• Annual fee: Rs. 999 (Waived if annual spends for last year > = Rs. 2,00,000)

Axis Bank Cashback Credit Card

• Up to 7% cashback on online spends (tiered structure)

• 0.75% cashback on offline and travel spends

• Annual fee: Rs. 1,000 (Waived on spends greater than 4 lakhs annually)

Rewards Point Credit Cards: Advantages and Limitations

 

Advantages:

• Flexible options for redeeming: Points can be used for shopping, gift cards, travel, or exclusive experiences.

• Greater potential: Reward points often have higher value when redeemed for premium or travel rewards. 

• Premium perks: Many cards provide travel insurance, lounge access, or concierge services.

• Milestone benefits: Substantial rewards for reaching spending thresholds.

Limitations:

• Complex systems: Understanding the rules of redemption and point values can be difficult to deal with.

• Expiring points: Some reward programs have dates of expiry for points if not redeemed in time.

• Category-specific benefits: Higher points may only be accrued in select categories, restricting flexibility.

• Higher annual fees: Often come with considerable fees that compensate for the benefits used.

Popular Rewards Credit Cards in India

Axis Bank Rewards Credit Cards

• 2 EDGE REWARD points on every Rs. 125 spent

• 10X reward points on apparel and departmental stores

• Complimentary lounge access and Swiggy discounts

• Annual fee: Rs. 500 (first year)

American Express Membership Rewards Credit Card

• Earn 1,000 bonus points for using a card 4 times on transactions of Rs. 1,500 +  monthly

• Additional 1,000 points for spending Rs. 20,000+ in a calendar month

• Annual fee: Rs. 1,000 (first year), Rs. 4,500 (second year)

SBI Card ELITE

• 5X reward points on the categories of departmental stores, dining, and grocery spends.

• Milestone benefits including e-vouchers

• Premium travel and lifestyle benefits

How to Choose Between Cashback and Rewards Point Cards?

Your decision should be based on these considerations:

Evaluate your spending habits:

• For daily purchases (groceries, fuel, bills): A cashback card may be more aligned

• For frequent travelers or category-specific spenders: A rewards card could be more valuable.

Consider ease of redemption:

• If you want simplicity and direct savings: Opt for cashback

• If you enjoy maximizing rewards with strategic redemptions: Choose rewards

Assess annual fees vs. benefits:

• Calculate if the benefits outweigh the annual fee

• Analyze if you'll spend enough to be eligible for fee waivers

Additional perks:

• Consider if premium benefits like lounge access, insurance, or concierge services are important to you. 

Which card type to choose?

The choice between cashback and rewards credit cards depends entirely on your lifestyle, spending patterns, and preferences. As Mohan K, Founder of TechFini, explains: "Cashback cards offer a percentage of consumers spending back as cash, making them ideal for those who want a simple, straightforward benefit. On the other hand, rewards credit cards accumulate points for every spend, which can be redeemed for merchandise, gift cards, or even cashback.

For beginners and those who prefer simplicity and guaranteed savings, cashback cards offer a straightforward approach to credit card benefits. For frequent travelers, brand-loyal shoppers, or those who enjoy maximizing redemption value, rewards cards may provide greater overall value despite their complexity.

Remember to regularly evaluate your credit card choices as your spending habits and lifestyle evolve. The best credit card today may not be the best fit for you tomorrow, and many financial experts recommend having a strategic combination of both types to maximize benefits across all spending categories.

FREQUENTLY ASKED QUESTION

1. Do reward points expire on Indian credit cards?

Yes, many reward programs have expiration dates. Some cards offer points that expire after 1-3 years, while others advertise "unlimited reward points that do not expire." Always check the specific terms of your card.

2. Is a cashback credit card worth it if I don't always pay in full?

Cashback credit cards are most beneficial if you pay off your balance in full each month. If you carry a balance, the interest charges will typically outweigh any cashback benefits you receive.

3. What should I consider when selecting a rewards credit card?

Consider your spending patterns, redemption preferences, annual fees, and whether the card offers additional benefits like lounge access, insurance coverage, or milestone benefits that align with your lifestyle and travel habits.

4. How valuable are credit card reward points in India?

The value varies by card issuer. For example:

• HDFC Regalia Gold: 1 point = Rs. 0.65 against Gold Catalogue or Rs. 0.50 against travel bookings

• Some cards offer 1 point = Rs. 0.20 for statement credit

• Axis Bank cards typically offer 1 EDGE point = Rs. 0.20-0.25

5. Which type of credit card is better for beginners?

If you're new to credit cards, a cashback card is generally a better option as it's easier to understand. You shop as usual and receive cashback for your purchases with a constant value, unlike reward points which may have varying redemption values.