Choosing the Right Credit Card: Cash Back or Rewards Points

It’s hard to imagine any working-age individual who does not have at least one credit card these days. With a credit card, we can purchase goods or services at ease, pay for anything in installment plans—sometimes even interest-free, or even get an emergency cash advance if needed. Credit cards come with all the perks and special discounts. But most importantly, they give us the freedom to spend without the inconvenience of carrying a lot of cash everywhere we go, hence reducing the risk of cash loss and adding an extra layer of security to our spending.

But with so many credit cards on the market, how do you know which one to choose? Each credit card certainly has its own benefits and drawbacks. Some credit cards allow us to earn rewards points, which can be redeemed for free gifts and special privileges. Others offer loyalty rewards in form of cash back or rebates. To help you choose a credit card that is right for you, we compare the pros and cons of these two types of credit card below.

Key Features of Point Rewards Credit Cards and Cash Back Credit Cards

Points credit cards allow you to accumulate points from your spending, usually 1 point for every 25 baht charged to the card. The points you earned, for example, can then be exchanged with free gifts, or a 10% discount on your purchase when the points you redeem equals the price of the good or service that you’re buying. In some cases, you can also redeem 1,000 points for a 100-baht discount on your purchase.

Cash back credit cards allow you to earn cash credit back as a percentage of your spending to your credit card account. How much you earn depends on each card’s terms and conditions.

But can you earn both points AND cash back from just one credit card? Normally, you must choose between either of the two benefits as credit card companies don’t like to offer both points and cash back in one reward program. From time to time, however, members of points credit cards can take advantage of a special promotion, which allows them to opt for money cash back instead of points or to redeem points for a cash rebate for a limited time.

The Pros and Cons of Point Rewards Credit Cards

Point rewards cardmembers can easily earn points from spending, which they can redeem for a variety of promotional privileges, such as:

• Special discount at participating restaurants, department stores and shops, airlines, or even hospitals
• Goods or services at participating stores, especially restaurants and bakeries
• Cash rebate to offset their own credit card payment
• Cash donation to a charity or foundation of their choice

But what is the financial value of rewards points? Is it worth getting a credit card just to earn points? To answer that question, let’s take a look at KTC credit cards. KTC credit cards offer 1 KTC FOREVER point for every 25 Baht spent. When no special promotions are applied, every 1,000 KTC FOREVER points is equal to 100 Baht, or an equivalent of 0.4% cash back. Additionally, point rewards credit cards may from time to time offer special promotions, giving you more cashback through point redemption than cashback credit cards. Combining that with the wide variety of perks and privileges of point rewards credit cards, you can see why many people find them more appealing than cashback credit cards.

That’s not to say that there are no drawbacks. To be able to take full advantage of the points system, cardmembers must first accumulate enough points to qualify for the redemption or promotion. Sometimes the product or service they want to redeem demands more points than they have accumulated. With KTC credit cards, however, you never have to worry about not having enough points. KTC cardmembers are able to redeem just a fraction of their accumulated points for any treats at McDonald’s, for example.  No need to wait long to feel like that special someone anymore!

The validity of rewards points is another important element, but is often overlooked. Most people know that they have to spend before they earn points, but a few pay any attention to the expiration of points they already earned. This is what makes KTC credit cards really stand out. With KTC FOREVER points, you have a total peace of mind knowing that your credit card points will never expire! Our credit cards allow you to stop worrying so you can truly enjoy your shopping and spending experience.

The Pros and Cons of Cash Back Credit Cards

The most prominent feature of any cash back credit card is, as the name suggests, the fact that you simply earn cash back as you spend. Generally, the amount you earn is in proportion to the amount you spend. Many people prefer this type of credit card because they can see the returns and savings instantly. For example, the cash back earned by KTC CASH BACK cardmembers in any billing cycle will simply be credited to their account in the next.

For KTC CASH BACK credit cards, the more you spend, the more you earn.

• Earn 0.40% cash back for any spending up to 30,000 Baht
• Earn 0.60% cash back for any spending between 30,001 and 80,000 Baht
• Earn 0.80% cash back for any spending exceeding 80,001 Baht

Which Credit Card is Best for You?

Now that you have understood the benefits and the drawbacks of each type of credit card, you can choose one that best suits your lifestyle. As a leading provider of financial products, KTC offers both types of credit card to match your spending habits and lifestyle.

Interested? Go ahead and click to apply for a KTC credit card online now!