Credit cards that offer rewards can be labeled as being in one of two different categories; those that offer loyalty points/miles, and those that return cash back. Although many card users have had difficulty redeeming frequent flier miles for promised award flights, users of cash back cards can face their own set of challenges. Here are three ways in which cash back cards can be more annoying than other varieties of rewards credit cards:

Value. The goal of any reward card user should be to earn the most value from their cards. In most cases, cash back cards fail to provide superior value to most travel reward cards. For example, most cash back cards return only 1% in value relative to the amount spent. In contrast, this is the least value that an airline cardholder can expect to receive. Notable exceptions include the Fidelity Rewards card that offers 2% cash back and the Blue Cash cards from American Express that offer more that 2% on some categories of purchases.

Limited Bonus Spending Categories. The nice thing about most travel reward cards is that their mileage earning rules are easy to understand. Cardholders earn a fixed number of miles per dollar spent, and usually double miles for purchases from that airline. On the other hand, many of the leading cash back cards have complicated systems that are only disclosed in the fine print. For example, the Discover More card offers a 5% cash back bonus on rotating categories of spending, but limits awards each month to $3,000. The Freedom card from Chase also has a similar program of rotating categories of spending, and also restricts them to $1,500 of spending each quarter.

Complicated Bonus Systems.

Not only are many of these cash back systems limited, there are other ways in which card issuers make it difficult for cardholders to earn bonus cash. For example, the Freedom card from Chase requires users to register each quarter to be eligible to receive the bonuses. Then, cardholders must not only remember which bonus categories are in effect, but must make an educated guess if a particular merchant will code the transaction to the eligible category. Finally, even when everything lines up and the cardholder receives the best bonus for the right category, the bonuses on spending within a particular category will only be received for three months of the year.

As a result of these issues, cash back cardholders can be confused, frustrated, and limited by these products. By understanding the difficulties that are inherent to many cash back credit card programs, cardholders can make the best decision when choosing the a reward credit card.

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