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Added October 19, 2010 from: Mike Killian
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 Mike Killian
Answered By Mike Killian:
Choosing between cash back credit cards or rewards points credit cards depends on which type of rewards you want. To choose a card based upon a promotional offer--whether cash back or rewards--might not be wise. The promotional material is good when picking between two similar cards but should never be the primary criteria in selection. It is much smarter to make your choice based upon cash back or rewards after the promotion is over.

You should also be aware that a card with any type reward, cash or otherwise, will normally have a higher purchase APR, which is how the credit card company makes up for what it's giving away in cash or rewards. Therefore, to best maximize any card offer, your return should be based on something you need or want. For example, if you fly a lot on American Airlines, you might be looking for a card that offers rewards specifically for American Airlines. On the other hand if you use your card mostly for food and groceries, your return should be based on cash back or rewards for grocery purchases. Regardless of what you choose, determine in advance the normal purchase APR and whether or not there is any annual fee. These two factors are critically important.

But perhaps your first question should be how your credit rating is. A poor credit rating negates nearly everything we have said whereas an excellent credit rating includes all we have said and allows so many more options. My suggestion is to first go to annualcreditreport.com and get a free copy of your credit report and insure it is as accurate as possible.

This question is about:  Cashback Credit Cards | Credit Card Rewards
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