Personal Finance

What exactly is the point of a non cash back credit card?

David Beren

Published: February 25, 2025 10:19 am

If you think about credit cards these days, all you ever hear about is the cash-back credit card. The reality is that there is a very good reason why this credit card type is the most discussed, as you can essentially earn “free” money just by shopping and paying off your balance. 

However, one Redditor posting in r/CreditCards asks an interesting question: What’s the point of a non-cashback credit card? Taking this one step further, the Redditor questions why someone would consider reward points a good or even better alternative to “free” cash back.

There is no question this is something to consider, as most people these days immediately look at cash-back credit cards without even considering any other option. As someone who regularly uses cash-back cards, I’m also interested in what the Redditor discovered. 

Rewards Points Can Be Attractive

Let’s assume for a minute that you are someone who loves to travel above anything else you like to do with your disposable income. In this case, the idea that you can use a travel rewards credit card instead of a cash-back option means you earn points instead of cashback. 

Depending on your card use, these points can add up quicker than cash back. For example, with the Capital One Quicksilver Card, you only earn 1.5% cash back on all purchases. In other words, for every $10,000 worth of purchases, you earn $150 in cash-back rewards. 

However, with a travel-focused credit card, you might spend far less to achieve the same $150 reward that can be used toward travel. A Capital One Venture Rewards card can earn as much as 10X every dollar spent booking travel through the Capital One travel portal. In a case like this card, you have a much better opportunity to spend less and “earn” more. 

The same can be said for the Chase Sapphire Preferred card, which offers 5X points on travel booked through Chase. These points quickly outpace any cash-back value you earn as a frequent shopper. 

No Cap On Earnings

While not universally true, one big bonus with non-cashback credit cards can be very appealing. Many (but not all) cash-back cards have some cap that limits how much cash-back can be earned. 

Anyone who is a big monthly spender with cash-back rewards cards might get frustrated if they run into a ceiling regarding earnings potential. Some cash-back cards have a hard $1,500 quarterly spending limit for bonus 5% categories, which can be aggravating if you specifically use these cards for their rotating bonus offers. 

The Travel Perks

For frequent travelers, the perks of using a travel rewards credit card can be more beneficial than earning cash back. When you think about a card like Capital One Venture X Rewards, which is a top travel customer for customers with excellent credit, the perks are immediate. 

First and foremost, you get 75,000 bonus miles if you spend over $4,000 on purchases in the first 3 months after opening your account. This is good for a $750 travel credit that can be used through Capital One Travel. You also get a $300 annual travel credit through Capital One Travel and an additional 10,000 miles on the anniversary of opening your card every year. 

Wait, there’s more. You also receive a $120 Global Entry or TSA PreCheck credit that can be applied yearly to help skip lengthy security lines. You also get 10X miles on hotels and rental cars booked through Capital One Travel, access to Capital One Lounges, cell phone protection, and no blackout dates. 

Shift your attention to the Chase Preferred Sapphire card, and you get a similar signup bonus, but you have even more ways to earn money when you shop at Walmart, Target, restaurants, and more. The perks really shine through when the Chase card can help you with trip cancellation and interruption insurance to cover sickness or bad weather. It also offers baggage delay insurance, trip delay reimbursement, purchase protection, and an extended warranty. 

While cash-back credit cards can offer many features, travel cards go above and beyond to get you to sign up for big benefits if you regularly travel. 

Zero Percent Balance Transfer

Another of the biggest benefits of looking at a non-cash-back credit card, like a travel card or a general-spending credit card, is receiving a 0% balance transfer interest rate between 12 and 21 months. This can be useful for anyone with a big balance on another card or a set of cards receiving upwards of 20% interest on their balance every month. 

Having the ability to transfer a balance to a card like this will give someone more opportunities to pay off the balance without continuing to accrue interest on the principle. This can go a long way to paying down debt and improving your credit score in the long run. 

However, one Redditor took the idea of a zero percent balance transfer rate even further by indicating that it was how they renovated their house. This couple put $45,000 on credit cards and then shifted some of this balance to zero percent cards over time so they pay less interest. This isn’t exactly the best move if you can’t transfer the balance quickly, but if you can, it’s a unique, although not often recommended, way to take advantage of balance transfer offers. 

Hotel Tiers

Sticking with the travel credit card idea, you automatically get upgraded in status if you opt for a credit card like a Hilton Honors or Marriott Bonvoy card. For example, you can opt for the Hilton Honors Aspire Card that automatically gives you 150,000 Hilton Honors bonus points and a complimentary Diamond status upgrade. 

Diamond status at Hilton Hotels means you have 100% points on earning a bonus on every stay, executive lounge access, premium Wi-Fi, 48-hour room guarantee, and space-available complimentary room upgrades. On top of the Diamond benefits, you also get the perks of every other bonus level, including spa discounts, a fifth night free on every reward stay, and no resort fees, just to name a few. 

Lower Interest Rates

Another consideration is that cash-back cards often come with some of the biggest tradeoffs in terms of interest rates. Because of the benefits provided to customers, banks like to earn their money back by charging exorbitant fees for people who aren’t regularly paying their balance off every month. This contrasts with non-cash-back cards, which generally offer lower overall interest rates. 

As it stands, the cards with the most valuable rewards often charge the highest interest rate. Of course, this is irrelevant to you if you pay off your balance monthly, but for those who don’t do that, there is a definite consideration around keeping interest rates as low as possible. 

Late Payments

While not universally true for all credit cards, cash-back cards will reduce or remove your cash-back balance if you make a late payment. It shouldn’t be a surprise to say that you should never charge more than you can pay off in a month, but even in the worst of times, you shouldn’t miss a payment, even if it’s just the minimum amount owed.

The challenge with a cash-back rewards card is that you might get a one-time grace period, but a second time could mean penalties, including reducing or removing your cash-back balance. It’s devastating to think that you could lose a potentially large cash balance all because of one missed payment, but it can and might happen.