Cashback vs Reward Points Cards 2026: Which Pays More?

A cashback card has a rate and a cap. A points card has a rate and a redemption value that you choose, usually by accident. Using each bank's own terms as of 5 October 2026, this guide converts both to rupees per ₹100 spent, shows where the caps bite, and gives the point value a rewards card must reach before it beats plain cashback.

The Cashback Side: Rates and Caps

Cashback cards look simple until you read the caps. SBI Card revised its Cashback card from 1 April 2026: 5% online and 1% offline, each capped at ₹2,000 a statement cycle and ₹4,000 in total, with gaming, tolls and government spends now excluded. Axis ACE caps its 5% and 4% categories at a combined ₹500 a statement. HDFC Millennia pays its cashback as reward points, not cash.

Millennia's points redeem against the statement at ₹1 each in HDFC's current FAQ, with a minimum of 500 points and a cap of 3,000 points a month, and unredeemed points lapse within two years. Details are in our reward points expiry guide. SBI posts its cashback to the card account within two working days of the statement.

The Points Side: What One Point Is Actually Worth

A points card's headline rate means nothing until you pick the redemption. HDFC states different values for the same point, and the spread is large.

Read down the last column. Regalia Gold's best stated value of ₹0.65 sits below the ₹0.80 it needs, so on the numbers HDFC publishes it earns 1.6%, not 2%. Infinia clears its bar only on flights and hotels at ₹1; at ₹0.30 as statement credit it drops to 1%. Magnus depends entirely on the partner-mile value you can achieve. HDFC's 15 May 2026 notice also moved most of its reward cards from ₹150 to ₹200 multiples, which is why Regalia Gold now earns 5 points per ₹200.

Worked Example: ₹50,000 a Month

Assumptions: ₹20,000 online shopping and ₹5,000 food delivery (all at Millennia's 10 merchants), ₹5,000 of utility bills paid via Google Pay, and ₹20,000 offline. That is ₹6 lakh a year. All spends are eligible except where a card excludes the category, annual fees are waived at this spend on every card except Infinia (thresholds: SBI and Axis ₹2 lakh, Millennia ₹1 lakh, Regalia Gold ₹4 lakh), and quarterly gift vouchers, SmartBuy accelerators and welcome benefits are left out.

SBI Cashback wins because its 5% covers online spend at any merchant outside the excluded categories, and excluded utilities are only ₹5,000 of the ₹50,000. Millennia loses ₹250 a month to its 1,000-point cap on the 5% tier. Axis ACE's ₹500 cap on the 5% and 4% tiers means most of its return comes from the flat 1.5%. Infinia's 3.33% gross is real, but at ₹6 lakh the ₹12,500 fee plus 18% GST (₹14,750) takes most of it.

A Simple Rule for Choosing

• Spend under about ₹10 lakh a year, no flights: take cashback. At ₹6 lakh the three cashback cards returned 2.1% to 2.9% with fees waived, against 1.25% to 1.63% for Regalia Gold.
• Heavy online spend: check the cap first. SBI stops paying 5% at ₹40,000 online a month, so a ₹1 lakh online spender gets ₹2,000, or 2%.
• Flights and hotels, booked through the bank portal: a points card can win, but only above the break-even value in the table, and only if the annual fee is waived or covered.
• Premium cards at ₹12,500: treat them as travel products. Our Infinia vs Magnus comparison shows what each returns at ₹10, ₹18 and ₹25 lakh a year.

For ranked options see our best cashback cards list, and for how HDFC, SBI and ICICI trimmed rewards this year see the reward devaluation guide. Whether cashback counts as income is covered in our guide on cashback and income tax.