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Which is better: cashback or reward points credit card?
Updated · CardKhoj Editorial Team
Short answer
A cashback card is better for most people because the value is fixed, automatic and needs no planning. A reward points card can be worth more — often 3–5% back — but only if you redeem points for flights or hotel transfers. If you do not travel often, choose cashback.
How each works
Cashback cards credit a percentage of your spend (1–5%) directly to your statement. ₹1 of cashback is always worth ₹1.
Reward points cards give points per ₹100 or ₹150 spent. Each point can be worth anywhere from ₹0.10 to ₹1 or more depending on how you redeem it — vouchers and statement credit usually give the lowest value, while airline miles and hotel transfers give the highest.
Side-by-side
| Cashback | Reward points | |
|---|---|---|
| Value per ₹100 | Fixed (₹1–₹5) | Variable (₹0.50–₹5+) |
| Effort | None | Need to plan redemptions |
| Expiry | Never (credited to bill) | Points often expire in 2–3 years |
| Best for | Online and everyday spends | Frequent travellers, high spenders |
Our rule of thumb
If you spend under ₹50,000 a month and fly fewer than six times a year, a cashback card will almost always give you more real money. Above that, a premium points card redeemed for travel can deliver more value.
This answer is general information, not personalised financial or tax advice. Rules, rates and limits change — confirm with your bank, the RBI or a qualified adviser before making decisions.