Cash back credit cards allow cardholders to put money toward their credit card statement, redeem for gift cards or cash equivalent prizes, or receive a physical check. Rewards programs are compiled of special offers and bonus points which can be redeemed for things other than cash: airline miles, gas cards, gift cards, hotel stays, and more.
When deciding if cash back or rewards is best for you, it's important to take a deep dive into your lifestyle and spending patterns to see which type of card will benefit you the most. Cash back cards can be viewed as a more practical reward– you see a physical return for the money you spend on your credit card. Cash back can usually be put right back toward your statement, or in some cases into other funds like your 401K, savings account or an IRA, so you don't have the opportunity to take your reward and splurge on another form of "present".
Rewards cards are geared to really treat yourself – your reward isn't cash, it's more like a "present" that you must use. For example, the Citi® Hilton HHonors™ Reserve Card touts an intro offer where cardholders who spend $2,500 in purchases within the first 4 months of account opening can earn 2 weekend night certificates each good for 1 weekend night stay at a Hilton hotel. While the reward is wonderful, there isn't a choice to put a hotel room into a savings account.
Don't get us wrong, rewards cards can also be very practical depending on your lifestyle. If you travel for business frequently, looking into rewards cards that offer flight and/or hotel benefits may be more lucrative for you. Doing your research about the card that best fits you will always be the best method for choosing which plastic to put in your pocket.