4 Ways to Use a Cash-Back Credit Card for Travel

Jordann Brown
by Jordann Brown June 13, 2018 / No Comments

Travel rewards credit cards are ideal for power wanderers who want to earn points for their spending and use them exclusively for travel. But if you aren’t logging thousands of miles every year, and you want the flexibility to spend your rewards on things other than hotels and plane tickets, is a travel rewards credit card the best choice?

The fact is, sometimes using a cash back credit card for travel will allow you to earn greater rewards, and the added flexibility of cash back means you’ll have more control over how you spend those rewards. If you’re choosing between a travel rewards credit card and a cash back credit card, here are four reasons to consider using a cash back credit card for travel.

No spending threshold

One of the big draws of travel rewards credit cards is that they offer a substantial welcome bonus — but this bonus comes with a price. Often the travel rewards credit cards require you to spend a certain amount of money within the first few months to qualify for those bonus points. For example, one of the top travel rewards credit cards in Canada, the BMO World Elite Mastercard, offers 35,000 welcome points, but you have to spend $3,000 within the first three months.

Spending $3,000 on your credit card may not be an option for you, so this welcome offer wouldn’t apply. In this case, a cash back credit card like the BMO Cashback World Elite Mastercard may be the better choice. With this credit card, you’ll earn 4% cash back on every purchase for the first four months, with no minimum purchase threshold.

Good for everyday spending

An important consideration to keep in mind when choosing between a cash back credit card or travel rewards credit card is that each card is ideal for different spending patterns. While some travel rewards credit cards may offer impressive rewards earning potential, if it doesn’t match your spending patterns, your rewards will be disappointing.

Just like many travel rewards credit cards, cashback credit cards always reward your everyday spending. Cash back credit cards allow you to earn a percentage of your spending depending on the category. For example, the Scotia Momentum Visa Infinite Card offers 4% cash back on gas and groceries, 2% cash back on bills and at the pharmacy, and 1% on everything else. Depending on your unique spending habits, this rewards scheme could earn you more cash back than an equivalent travel rewards credit card would.

Insurance and exclusive offers

Just like travel rewards credit cards, cash back credit cards offer an inclusive suite of insurance coverage to keep you safe if your travel plans go awry. Coverage typically includes travel insurance like emergency medical, accident, trip interruption and delay, baggage loss and delay and car rental collision and damage insurance.

On top of that, you’ll also enjoy coverage for purchases made on your credit card like zero liability insurance, extended warranty, and purchase assurance.

Finally, many cash back credit cards offer perks that will take your travel experiences from every day to extraordinary. For example, the Scotia Momentum Visa Infinite Card gives you access to the VISA Infinite Luxury Hotel Collection, a curated collection of the world’s finest hotels. You’ll also enjoy access to the VISA Infinite Dining Series, an incredible series of one-of-a-kind events at restaurants and wineries across the country.

The ultimate flexibility of cash

Finally, a cash back credit card gives you the ultimate flexibility because your rewards are credited to your account in the form of cold hard cash. You aren’t restricted to purchasing or booking your travel arrangements through the credit card’s website, and you can use your cash back for anything related to your travel. Whether you use it to pay for a hotel or to buy a new bathing suit for your trip — the choice is yours.

For the average spender, a cash back credit card can be used just as effectively for travel as a travel rewards credit card. The one exception to this rule is if you are a power traveler. Travel rewards credit cards tend to reward purchases like hotels and flights more heavily than other purchases. So if you routinely spend thousands of dollars per year on travel, a travel rewards credit card will give you more bang for your buck.

Photo: Shopify Partners

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