Choosing between rewards cards, cashback cards, and no annual fee cards represents one of the most important decisions in credit card selection. Each type serves different financial goals and spending patterns, yet many Saudi consumers don't understand which option maximizes value for their specific situation. This comprehensive guide analyzes all three credit card categories, comparing their benefits, costs, and optimal use cases. Whether you're a frequent traveler who values airline miles, a practical spender who prefers cash rewards, or a cost-conscious consumer focused on minimizing fees, this analysis helps you choose the card type that delivers the best long-term value.
Quick Summary: Credit Card Type Comparison
Rewards Cards:
Best for: High spenders (SAR 5,000+ monthly) who travel frequently
Key benefit: Points/miles for travel, merchandise, or experiences
Typical annual fee: SAR 400-1,000+
Breakeven spending: SAR 40,000-80,000 annually
Example: ANB AlFursan Signature Credit Card
Cashback Cards:
Best for: Moderate spenders who prefer simplicity and flexibility
Key benefit: Direct cash rebates on purchases (5-3% back)
Typical annual fee: SAR 200-600
Breakeven spending: SAR 15,000-40,000 annually
Example: Al Rajhi Bank Cashback Credit Card
No Annual Fee Cards:
Best for: Light spenders, students, or fee-sensitive consumers
Key benefit: No ongoing costs regardless of usage
Annual fee: SAR 0 (permanently or promotional)
Breakeven spending: Any amount (immediate value)
Example: Al Rajhi Bank Platinum Credit Card
Giraffy Analysis: For most Saudi consumers spending less than SAR 30,000 annually, no annual fee cards provide better net value than rewards cards, even when considering missed rewards opportunities.
Understanding Rewards Credit Cards
Rewards cards offer points, miles, or other incentives for spending but typically charge annual fees that must be justified through usage benefits.
How Rewards Programs Work
Point Accumulation Systems Saudi rewards cards typically use point-based systems where spending generates points that can be redeemed for various benefits:
Earning rates: 1-5 points per SAR spent depending on category
Bonus categories: Higher earning rates for specific merchant types
Sign-up bonuses: Large point awards for meeting initial spending requirements
Multiplier events: Seasonal or promotional earning boosts
Expiration policies: Points may expire after 12-36 months of inactivity
Redemption Options and Values The value of rewards depends heavily on how you redeem them:
Redemption Type | Typical Value per Point | Best For |
|---|---|---|
Travel bookings | SAR 0.015-0.025 | Frequent travelers |
Merchandise | SAR 0.008-0.012 | Specific product needs |
Cash back | SAR 0.005-0.010 | Flexibility preference |
Gift cards | SAR 0.010-0.015 | Targeted spending |
Experiences | SAR 0.020-0.040 | Luxury experiences |
Airline Miles Programs Several Saudi cards partner with airlines for miles earning:
AlFursan (Saudia): Most common partnership in Saudi market
Skywards (Emirates): Popular for UAE travel
Miles+Bonus: Multi-airline redemption options
Transfer partners: Ability to move points between programs
Elite status benefits: Potential for upgraded travel experiences
Premium Rewards Card Analysis
High-Tier Rewards Cards Premium rewards cards offer enhanced earning rates and luxury benefits:
Card | Annual Fee | Earning Rate | Best Features |
|---|---|---|---|
ANB AlFursan Signature | SAR 1,000 | 0.5 miles/SAR intl | Airport lounge, concierge |
Alinma AlFursan Platinum | SAR 150 | 0.33 miles/SAR intl | Dragon Pass lounge access |
BSF Al Fursan Signature | SAR 1,000 | 0.5 miles/SAR intl | Premium travel insurance |
Value Calculation Example For a high-spending professional:
Annual spending: SAR 80,000
Card: ANB AlFursan Signature (SAR 1,000 annual fee)
Miles earned: 40,000 miles annually (5 miles/SAR)
Mile value: SAR 02 each for travel redemptions
Gross value: SAR 800
Net value: -SAR 200 (fee exceeds rewards)
Additional benefits needed to justify: Airport lounge, insurance, concierge
Mid-Tier Rewards Options
Balanced Rewards Cards Mid-tier cards offer rewards at more accessible fee levels:
Lower annual fees (SAR 200-500)
Moderate earning rates (1-3 points per SAR)
Basic travel benefits
More achievable spending thresholds for value
Good stepping stones to premium cards
Spending Category Bonuses Many rewards cards offer enhanced earning in specific categories:
Dining and entertainment: 2-5x points at restaurants
Travel bookings: 3-5x points on flights and hotels
Gas stations: 2-3x points for fuel purchases
Groceries: 2-4x points at supermarkets
Online shopping: 2-3x points for e-commerce
Cashback Credit Cards: Simplicity and Value
Cashback cards offer straightforward value propositions with direct cash rebates on purchases, making them easier to understand and optimize than complex rewards programs.
Cashback Program Structures
Flat-Rate Cashback Simple programs offering consistent rates across all purchases:
Typical rates: 5-2% back on all spending
No category management required
Consistent value regardless of spending patterns
Easy calculation of benefits and breakeven points
Lower administrative overhead for cardholders
Tiered Cashback Systems More complex programs with varying rates by spending level:
Spending thresholds: Different rates for different spending amounts
Annual caps: Maximum cashback amounts per year
Reset periods: When higher earning rates restart
Qualification requirements: Minimum spending to access higher tiers
Category-Based Cashback Programs offering higher rates in specific spending categories:
Category | Typical Cashback Rate | Annual Cap | Best For |
|---|---|---|---|
Groceries | 2-5% | SAR 2,000-5,000 | Families |
Gas | 2-4% | SAR 1,500-3,000 | Commuters |
Dining | 2-3% | SAR 2,000-4,000 | Social spenders |
Online | 2-4% | SAR 3,000-6,000 | E-commerce users |
Everything else | 0.5-1% | Unlimited | All purchases |
Cashback Card Analysis
Leading Cashback Options Current top cashback cards in the Saudi market:
Card | Annual Fee | Cashback Rate | Notable Features |
|---|---|---|---|
Al Rajhi Cashback Card | SAR 200 | 1-3% by category | No foreign transaction fees |
SNB CashBack Card | SAR 300 | 0.5-2% tiered | Higher rates for high spenders |
Alinma Cashback Card | SAR 150 | 1% flat rate | Simple, consistent earning |
Cashback Redemption Methods Different cards offer various cashback redemption options:
Statement credit: Applied directly to card balance
Bank account deposit: Cash deposited to linked account
Minimum redemption thresholds: SAR 50-200 minimum redemptions
Redemption frequency: Monthly, quarterly, or annual options
Expiration policies: Whether cashback expires if not redeemed
Cashback Optimization Strategies
Maximizing Category Bonuses For category-based cashback cards:
Track spending by category to maximize bonus rates
Time large purchases to optimize category bonuses
Use multiple cards strategically for different categories
Monitor quarterly rotations on cards with changing bonus categories
Stay within annual caps to maintain highest earning rates
Breakeven Analysis for Cashback Cards Calculate when cashback value exceeds annual fees:
Card with SAR 300 annual fee and 5% cashback
Breakeven spending: SAR 300 ÷ 5% = SAR 20,000 annually
Above SAR 20,000 spending: Card provides net positive value
Below SAR 20,000 spending: Consider no annual fee alternatives
No Annual Fee Cards: Maximizing Value Without Costs
No annual fee cards provide credit card benefits without ongoing costs, making them ideal for cost-conscious consumers or those with moderate spending levels.
Types of No Annual Fee Cards
Permanently Free Cards Cards that never charge annual fees as part of their core value proposition:
Al Rajhi Bank Platinum: Currently offering lifetime fee waiver
Basic bank cards: Entry-level products with essential features
Student cards: Designed for young adults with limited income
Secured cards: Cards requiring cash deposits as collateral
Promotional No-Fee Periods Cards waiving annual fees for limited promotional periods:
First-year free: Common promotional offer for new customers
Relationship-based waivers: Fee waivers for banking package customers
Spending-based waivers: Annual fees waived for meeting spending targets
Temporary promotions: Limited-time offers for specific customer segments
Benefits Without Annual Fees
Core Credit Card Features No annual fee cards typically include essential credit card benefits:
Grace periods: 20-25 days for new purchases when paying in full
Online account management: Mobile apps and website access
Customer service: Phone and digital support channels
Basic security features: Fraud monitoring and zero liability protection
Global acceptance: Visa/Mastercard network acceptance worldwide
Unexpected Premium Features Some no annual fee cards offer surprisingly robust benefits:
Card | Annual Fee | Premium Features Included |
|---|---|---|
Al Rajhi Platinum | SAR 0 | Airport lounge access, travel insurance |
BSF Basic Card | SAR 0 | Purchase protection, extended warranty |
Alinma Essential | SAR 0 | Mobile wallet integration, spending alerts |
No Annual Fee Card Strategy
When No-Fee Cards Make Sense Several situations favor no annual fee cards:
Low to moderate spending: Less than SAR 20,000-30,000 annually
Inconsistent usage: Irregular or seasonal spending patterns
Multiple card strategies: Using free cards for specific purposes
Building credit: Establishing credit history without ongoing costs
Backup cards: Secondary cards for emergencies or specific uses
Maximizing Value from Free Cards Strategies for optimizing no annual fee cards:
Use all available benefits: Don't ignore included features
Maintain accounts long-term: Build credit history length
Monitor for upgrade offers: Banks may offer premium card upgrades
Combine with other banking products: Leverage relationship benefits
Stay alert for promotional bonuses: Sign-up offers and limited-time rewards
Detailed Cost-Benefit Analysis by Spending Level
Understanding which card type provides optimal value requires analyzing total costs against benefits across different spending levels.
Low Spenders (Under SAR 20,000 Annually)
Optimal Strategy: No Annual Fee Cards For consumers spending less than SAR 20,000 annually:
Card Type | Annual Cost | Typical Benefits | Net Value |
|---|---|---|---|
No annual fee | SAR 0 | Basic benefits + some premium features | Positive |
Cashback (SAR 200 fee) | SAR 200 | SAR 100-200 cashback | Neutral to negative |
Rewards (SAR 400+ fee) | SAR 400+ | Minimal rewards earned | Negative |
Calculation Example:
Annual spending: SAR 15,000
Cashback card (1% rate, SAR 200 fee): SAR 150 cashback - SAR 200 fee = -SAR 50
No annual fee card: SAR 0 cost + basic benefits = Positive value
Moderate Spenders (SAR 20,000-50,000 Annually)
Optimal Strategy: Cashback Cards or Premium No-Fee Cards This spending range makes cashback cards viable while some rewards cards remain expensive:
Spending Level | Best Card Type | Reasoning |
|---|---|---|
SAR 20,000-30,000 | Low-fee cashback | Modest positive value |
SAR 30,000-40,000 | Mid-tier cashback | Clear positive value |
SAR 40,000-50,000 | Cashback or entry rewards | Both options viable |
Value Comparison at SAR 35,000 Annual Spending:
Cashback card (5% rate, SAR 300 fee): SAR 525 cashback - SAR 300 fee = +SAR 225
Rewards card (2 points/SAR, SAR 500 fee): 70,000 points worth SAR 350-700 - SAR 500 fee = -SAR 150 to +SAR 200
No annual fee card: SAR 0 cost + benefits = Positive but lower absolute value
High Spenders (Over SAR 50,000 Annually)
Optimal Strategy: Premium Rewards or High-Tier Cashback High spending levels can justify premium cards with substantial annual fees:
Spending Level | Recommended Approach | Expected Net Value |
|---|---|---|
SAR 50,000-75,000 | Premium cashback or mid-tier rewards | SAR 500-1,000 annually |
SAR 75,000-100,000 | High-tier rewards with optimization | SAR 800-1,500 annually |
SAR 100,000+ | Multiple premium cards strategically | SAR 1,500+ annually |
High-Spender Calculation Example:
Annual spending: SAR 80,000
Premium rewards card (SAR 800 fee, 3 points/SAR average)
Points earned: 240,000 annually
Point value at SAR 015 each: SAR 3,600
Net value: SAR 3,600 - SAR 800 = SAR 2,800 positive
Advanced Card Type Strategies
Sophisticated consumers can maximize value by combining different card types strategically rather than relying on a single card.
Multi-Card Portfolio Approach
The Three-Card Strategy Advanced users often maintain three cards serving different purposes:
Primary rewards card: For highest-spending categories
Cashback card: For categories not covered by rewards card
No annual fee card: For backup, credit history, and special situations
Category Optimization Strategy Using different cards for different spending categories:
Travel card: Premium rewards card for flights, hotels, travel expenses
Dining card: Cashback card with restaurant bonuses
Everything else card: No annual fee card for miscellaneous spending
Online shopping card: Card with e-commerce bonuses
Timing and Lifecycle Strategies
The Graduation Strategy Starting with basic cards and upgrading over time:
Student/entry phase: No annual fee card to build credit
Early career phase: Low-fee cashback card for moderate spending
Established professional: Premium rewards card for high spending
Mature wealth phase: Multiple premium cards with relationship benefits
Promotional Cycling Taking advantage of limited-time offers:
Sign-up bonus maximization: Applying for cards with substantial welcome bonuses
Promotional rate periods: Using cards during enhanced earning periods
Fee waiver periods: Maximizing value during waived annual fee promotions
Upgrade incentives: Taking advantage of upgrade bonuses and benefits
Common Mistakes in Card Type Selection
Understanding typical errors helps you avoid suboptimal choices that can cost hundreds or thousands of riyals annually.
Overestimating Usage
The Premium Card Trap Many consumers choose premium rewards cards based on aspirational rather than actual spending:
Overestimating annual spending by 30-50%
Ignoring category restrictions that limit high earning rates
Failing to account for lifestyle changes that reduce spending
Focusing on maximum possible rewards rather than realistic scenarios
Reality Check Questions:
What was your actual credit card spending last year?
How much do you realistically spend in bonus categories?
Will your spending patterns remain consistent?
Are you likely to use premium benefits like lounge access?
Undervaluing Simplicity
The Complexity Cost Rewards cards often require active management that many users don't maintain:
Category tracking overhead for bonus maximization
Redemption value optimization requiring research and planning
Multiple card coordination adding administrative burden
Expiration management for points and miles
The Cashback Advantage Cashback cards offer simplicity benefits often overlooked in value calculations:
Automatic redemption requiring no user action
Transparent value with clear dollar amounts
No expiration concerns for cashback balances
Easy optimization with straightforward earning rates
Ignoring Total Cost of Ownership
Hidden Costs Beyond Annual Fees Focus on annual fees can blind consumers to other significant costs:
Foreign transaction fees: 5-5% on international purchases
Balance transfer fees: 2-3% for debt consolidation
Cash advance fees: SAR 75-100 plus immediate interest
Late payment fees: SAR 50-150 per occurrence
Over-limit fees: SAR 100-200 when applicable
Opportunity Cost Considerations Choosing suboptimal card types creates opportunity costs:
Missed cashback: Using rewards cards for non-bonus spending
Unused benefits: Paying for premium features you don't use
Inefficient redemptions: Poor point/mile redemption choices
Fee drag: Annual fees reducing net returns
Frequently Asked Questions
How do I know if a rewards card is worth the annual fee? Calculate your total annual spending, multiply by the earning rate, estimate redemption value, and compare to the annual fee. If rewards value exceeds the fee by at least 20-30%, the card likely provides good value.
Can I change from a rewards card to a cashback card with the same bank? Most banks allow product changes within their card portfolio, though this may require a new application and credit check. Contact your bank to understand available options.
Do no annual fee cards hurt my credit score? No, no annual fee cards can actually help your credit score by increasing available credit and providing payment history without the pressure of justifying annual fees through usage.
Should I close my no annual fee cards when I upgrade to premium cards? Generally no, keeping no annual fee cards open helps your credit score by maintaining credit history length and increasing total available credit.
How often should I reassess my card type choice? Review your card portfolio annually or when major life changes occur (job changes, marriage, increased travel, etc.) that might alter your spending patterns.
Can I have multiple card types from the same bank? Yes, most banks allow customers to have multiple credit cards of different types, though each requires separate applications and credit evaluations.
What's the best card type for someone just starting to build credit? No annual fee cards are typically best for credit building, as they provide all essential credit-building benefits without ongoing costs that might tempt you to close the account.
How do category bonuses work with business vs personal spending? Business cards typically have different category structures than personal cards. If you have business expenses, consider dedicated business cards rather than mixing business spending on personal cards.
Should I choose cards based on current promotions or long-term features? Focus primarily on long-term features and value, as promotions are temporary. However, significant sign-up bonuses can provide value even if you later switch cards.
How do I maximize value from a card I already have? Understand all available benefits, optimize spending in bonus categories, use redemption options that provide highest value, and ensure you're taking advantage of included services like insurance or purchase protection.
Can I negotiate annual fees or card terms? Some banks may waive fees or offer retention bonuses for good customers, especially if you're considering canceling. It's worth calling customer service to inquire about available options.
What should I do if my spending patterns change significantly? Reassess your card portfolio and consider switching to card types that better match your new spending levels. Many banks offer product change options that don't require new applications.
How do I calculate the true value of airline miles or points? Research typical redemption values for your preferred redemption types, factor in expiration dates and blackout restrictions, and compare to the cash equivalent of what you'd spend on those same benefits.
Should I focus on one card type or diversify across multiple types? For most people, one well-chosen card meets their needs. However, high spenders or those with diverse spending patterns may benefit from strategically using multiple card types.
What's the best approach if I'm not sure about my spending patterns? Start with a no annual fee card to establish credit and track your spending for 6-12 months, then reassess based on your actual usage patterns rather than estimates.
Conclusion and Decision Framework
Choosing the right credit card type requires honest assessment of your spending patterns, lifestyle, and financial priorities rather than aspirational thinking about how you might use premium benefits.
Decision Framework Summary:
Spending under SAR 20,000 annually: Choose no annual fee cards
Spending SAR 20,000-50,000 annually: Consider cashback cards
Spending over SAR 50,000 annually: Evaluate premium rewards cards
Complex spending patterns: Consider multi-card strategies
Uncertain spending: Start with no annual fee cards
Key Decision Factors:
Actual vs. estimated spending: Use last year's data, not hopes
Simplicity preference: Value the convenience of cashback over rewards complexity
Total cost analysis: Include all fees, not just annual fees
Benefit utilization: Only pay for benefits you'll actually use
Long-term flexibility: Choose cards that adapt to changing needs
Action Steps:
Calculate your annual credit card spending from last year's statements
Identify your top spending categories and typical amounts
Research cards that match your actual (not aspirational) spending patterns
Factor in all costs and realistic benefit utilization
Choose the card type that provides the highest net value for your situation
Remember that the best credit card type is the one that maximizes your net value while fitting your spending habits and lifestyle. Premium cards with impressive benefits mean nothing if the annual fees exceed the value you actually receive, while simple cashback cards can provide excellent value for consumers who use them consistently and appropriately.