Cash Back vs. Travel: How to Choose Credit Card Rewards

For low-maintenance rewards, cash back is the way to go. For big-time travelers, travel rewards are ideal.
Claire Tsosie
By Claire Tsosie 
Edited by Erin Hurd

Many or all of the products featured here are from our partners who compensate us. This influences which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money.

Choosing a rewards credit card means picking a side in an ongoing debate: cash back or travel benefits?

Both have advantages. Cash back is flexible and easy to redeem. Points or miles dangle the possibility of a paid-for vacation and, sometimes, a higher reward value per dollar spent. Nowadays, some cards let you redeem rewards for cash or travel at the same value. But if you’re deciding between the two, it comes down to your lifestyle — and the effort you’re willing to put in.

Video preview image

Cash back

With a cash-back card, rewards come in dollars, not points or miles. You can redeem rewards for a credit on your statement and may also be able to redeem for gift cards, a check or a direct deposit to a bank account.

Easy redemptions, fewer perks

Because redeeming rewards takes no research or effort, this option is perfect for someone who wants a low-maintenance wallet. And, if you're looking to finance a large purchase, many cash-back cards come with a generous introductory 0% interest promotion.

Cash-back credit cards do come with some drawbacks, though. They lack the high-end perks you'll find on some travel cards and often charge foreign transaction fees, and sign-up bonuses tend to be more modest.

Choosing a card based on your spending

Since the main appeal of a cash-back card is earning money back for each purchase, you'll want to pick a card with bonus categories that match how you spend your money.

For instance, home chefs will do well with the Blue Cash Preferred® Card from American Express. It has a $0 intro annual fee for the first year, then $95. But, it earns a whopping 6% back on purchases at U.S. supermarkets. Terms apply (see rates and fees). Meanwhile, foodies who enjoy a night out might want to consider the Capital One SavorOne Cash Rewards Credit Card, which earns 3% back on dining and entertainment. Or, want the ultimate low-maintenance option? Choose a flat-rate credit card like the Wells Fargo Active Cash® Card, which earns 2% back on every purchase, no matter the category.

If these options don't quite fit what you're looking for, check out NerdWallet's best cash-back credit cards.


Travel credit cards give you rewards in the form of points, miles or some other rewards currency that doesn't have a set monetary value. Depending on the card, you can often redeem your points for merchandise, gift cards or cash back. But you'll typically get the most value out of your rewards when you redeem them for travel.

Outsized rewards through transfer partners

Many travel cards give you the option to transfer your rewards to specific airline and hotel rewards programs, which can give you even more bang for your buck, if you're willing to put in a little effort. A point can be worth more than 1 cent apiece in some circumstances.

Let's say you have the Capital One Venture Rewards Credit Card. You can use Capital One Miles earned on the card to book travel directly in the Capital One travel portal, usually for a value of 1 cent each. But transferring miles to travel partners could unlock a higher value.

For example, booking two nights at a Wyndham hotel in Newport, Rhode Island, for October 2022 costs $700.45 or 70,045 miles through the Capital One travel portal (as of May 2022). But in this case, transferring the miles to Wyndham rather than booking through Capital One could be a better move. By transferring Capital One Miles to Wyndham (1 Capital One Mile = 1 Wyndham point), you could book that same hotel for the same two nights for a total of just 30,000 points. That boosts the value of your miles to 2.3 cents each.

That's not a small difference if you're trying to decide between a 2% cash-back card like the Wells Fargo Active Cash® Card and the Capital One Venture Rewards Credit Card, which earns 2 miles per dollar on most purchases. If you spent $2,000 a month, you'd earn roughly the same amount back with both cards per year: $480 or 48,000 miles, respectively.

But if you were able to redeem all of your Capital One Miles at 2 cents apiece, your rewards value jumps from $480 to $960, effectively giving you 4% back on all purchases.

Extra perks

Most travel credit cards come with an annual fee. But in exchange, you're more likely to find a card with valuable perks like a statement credit to cover the cost of TSA PreCheck, airport lounge access, and automatic status with certain hotels and rental car companies.

Ready for a new credit card?
Create a NerdWallet account for insight on your credit score and personalized recommendations for the right card for you.

Which is better?

When you're picking a card, be realistic about how you're going to use it. Assuming you don't plan on carrying a balance and don't need to worry about interest rates, go for a card that offers a high rewards rate and redemption options that complement your lifestyle.

A travel card is an excellent choice if you travel frequently and can take full advantage of the side perks. A cash-back card, though, is usually less expensive and comes with more versatile rewards. For many, that makes it a clear winner.

What's next?

To view rates and fees of the Blue Cash Preferred® Card from American Express, see this page.

Find the right credit card for you.

Whether you want to pay less interest or earn more rewards, the right card's out there. Just answer a few questions and we'll narrow the search for you.

Get Started
Get more smart money moves – straight to your inbox
Sign up and we’ll send you Nerdy articles about the money topics that matter most to you along with other ways to help you get more from your money.