Cash Back vs Rewards Credit Card

Both cash back and rewards credit cards give you something in return for your spending—but they do it in different ways:

• Cash back: You earn a percentage of your purchases back as cash or statement credits

• Rewards: You earn points or miles you can redeem for travel, gift cards, merchandise, or statement credits

The right choice depends on whether you want simple money back or you’re willing to optimize points for maximum value.

Where KOHO Everything Fits In

KOHO Everything is a prepaid Mastercard® with cash back rewards and high interest on your balance, without letting you fall into revolving credit card debt.

That’s where KOHO Everything can help:

• Grow your savings with 3.5% interest rates, one of the highest in Canada

• Earn 2% cash back on groceries, eating, drinking, and transportation and 0.5% on everything else

• Unlimited transactions & e-transfers

• Pay no foreign transaction fees

• No minimum balance required

KOHO Everything gives you a cash back experience in a more controlled way.

What is a Cash Back Credit Card?

A cash back credit card gives you a percentage of your spending back, usually as:

• Statement credits

• Direct deposits

• Cheques or redeemable “cash rewards”

Typical features:

• Simple: “Spend $1, get X% back”

• Often have bonus categories (like groceries, gas, dining)

• Can come with annual fees and high interest if you carry a balance

Best if you want straightforward value and you always pay your balance in full.

What is a Rewards Credit Card?

A rewards card gives you points or miles instead of cash:

• You earn points per dollar spent

• You redeem for travel, gift cards, statement credits, or merchandise

• Some programs give extra value if you redeem for flights/hotels in specific ways

Typical features:

• Potentially higher value per dollar if you optimize redemptions

• More complex rules, blackout dates, and program terms

• Often higher annual fees and similar high interest rates

Best if you’re willing to learn the program, travel often, and optimize redemptions.

Which is Better for You?

Cash back cards are usually better if you want:

• Simplicity – you don’t want to think about point charts

• Flexible value – cash is always useful

• A quick way to see “real money” coming back

Rewards/points cards can be better if you:

• Travel frequently

• Don’t mind juggling bonus categories and redemption rules

• Are confident you’ll never carry a balance, so interest won’t wipe out your rewards