Guide
Cash back vs. travel rewards
Both card types pay you for spending. The right one depends on how you spend, how you like to redeem, and whether you pay your balance in full each month.
How each type works
Cash back cards return a percentage of what you spend as money, usually as a statement credit, a deposit or a check. The value is simple: 1.5% back on $1,000 is $15.
Travel rewards cards earn points or miles. These can be redeemed for flights, hotels or statement credits, and the value of each point depends on how you redeem it. They sometimes come with extras such as travel credits or airport benefits, and often carry an annual fee.
| Cash back | Travel rewards | |
|---|---|---|
| Best for | Simple, predictable savings | People who travel often |
| Earning | Flat rate or category rewards | Points or miles, often with travel perks |
| Redeeming | Straightforward | More options, more to learn |
| Annual fee | Often none | Sometimes, to pay for added perks |
| Watch for | Category caps or rotating categories | Foreign fees, blackout dates, point values |
Is an annual fee worth it?
Compare what the card earns for you with what it costs. A simple formula:
Yearly rewards you would earn − annual fee = net value.
For example, suppose you spend $2,000 a month ($24,000 a year). A no-fee card paying 1.5% earns $360. A card with a $95 fee paying 2% earns $480, so its net value is $385. The fee card comes out $25 ahead, but only if you really spend that much. At $1,000 a month the fee card nets $145 against $180 for the no-fee card, and the no-fee card wins. These numbers are examples only, so use your own spending and the card's actual rates. The calculator on the home page does the math for you.
Which should you choose?
- Choose cash back if you want rewards without thinking about them, or you are new to rewards cards.
- Choose travel rewards if you take several trips a year, will use the travel perks, and are comfortable learning how to redeem points.
- Choose neither first if you are building credit. A card designed for limited credit history may be a better first step, and you can switch to a rewards card later.
Rewards only pay off if you pay in full. Interest on a carried balance usually costs more than the rewards earn. If you carry a balance, a lower interest rate matters more than the rewards rate.
See the cards on offer
Compare rewards, fees and rates on Capital One's site and pick the one that matches how you spend.
Start your applicationThis guide is general information, not financial advice. Rewards programs and card terms can change.