Credit Card Reward Points

Banks offer reward points on credit cards to make your transactions exciting and rewarding. You can earn reward points when you shop for eligible items with a credit card or simply make transactions up to a certain amount. Once you accumulate a considerable number of reward points, you can redeem them as vouchers, gift items, air miles, etc.

Customers often choose their credit card based on the type of rewards they can earn. Most banks offer various credit cards for different lifestyle needs. For instance, there are credit cards geared towards travellers that help you to earn miles and rewards on travel and hotel stays. Similarly, rewards points are also targeted towards daily essentials like grocery shopping.

Reward points can be earned by using your credit card for different types of transactions. It also depends on the type of card you chose - whether it is a basic or a high priority credit card. Some of the rewards offered by credit card providers are as follows:

• Welcome Rewards: When you avail of a new credit card, you can end up earning some welcome reward points. In this way, you could end up saving money right from the start! In addition, you can earn additional points by reaching a spending threshold within a set time.

• Regular Rewards: This type of reward point usually remains fixed and can be achieved by reaching a spending threshold under any rewards program. It is to be noted that such kind of reward programs completely depend on the credit card provider.

• Accelerated Rewards: Accelerated reward points can be earned when one spends on particular categories like travel, online shopping, etc. For eg, if you earn 10 reward points for every ₹100 spent as regular rewards, then you can earn 2X accelerated rewards on travel-related transactions with your travel credit card. That's the benefit of Accelerated reward points.

• Loyalty Points: As the name suggests, you can earn a significant amount of points for showing your loyalty towards a specific card. Loyalty points are generally earned upon renewal of the credit card.

• Bonus Points: If you use the credit card for a certain sum of money that is over and above the required limit, you become eligible for bonus points. For eg, you can earn a reward point on every ₹100 spent. Any more spending in the same month will allow you to earn twice the number of reward points on every ₹ 100 spent.

• High-value Purchases: There are certain products that fall under the high-value purchase category. Hence, when you spend on products such as jewellery, travel bookings, and holidays, they can help you earn more reward points.

• International Rewards: If you end up using your card outside the country or make high-value purchases abroad, certain card-holding companies offer international rewards on the transactions.

• Supplementary Cards: Such kinds of cards can be availed for any of the members of your family who are of at least 18 years of age. Points earned will be deposited into your rewards account.

 You can earn and enjoy a host of benefits when you decide to redeem credit card points as listed below:

•  Merchandise

Each credit card provider will have a collection of a specific list of products along with the number of reward points needed to purchase that product. These items include apparels, beauty products, stationeries, accessories, electronic gadgets, travel merchandise, etc.

•  Gift Vouchers

You can use the reward points you earn to get e-vouchers from popular restaurants, merchants, or brands.

•  Air Miles

Some credit cards allow you to earn air miles directly or with some cards, your points can be converted to air miles. You can redeem these miles for purchasing or availing a discount on your air tickets.

•  Cashback

Credit card cashback reward is a bonus provided to credit card customers when they use their cards to spend on online shopping or make any kind of in-store purchase. The amount can also be utilised to pay out any outstanding balance.

•  Donations

Redemption of credit card reward points can be done by donating to the charities listed. You can select the charity of your choice and cash equivalents of the reward points will be given.

• Cash is always preferred over products or services. Check if your lender allows you to cash out your credit card reward points.

• Keep an eye out for products or services, especially items you have added to the cart for a long time and take advantage of the discounted rates.

• Use one credit card to maximise the collection of reward points and avail the highest benefits.

• Keep an eye out for the expiry date so that you have plenty of time to redeem your reward points.

• Assess the credit cards available in the market based on the reward points they offer before opting for one.

• In spite of rewards being an added advantage, in order to earn more reward points, you must not overspend on your card.

• You should periodically check the terms and conditions of the reward points since credit card companies tend to modify the same.

• And finally, make sure to pay your credit card dues in full and on time to maximise the benefits of the reward points earned.

The following are some guidelines on how you can prevent losing credit card reward points:

• It is important that you read and understand the terms and conditions in the fine print of your credit card.

• You should ensure that the points system matches your lifestyle and spending habits. If you do not play golf, you should refrain from opting for a card that provides golf privileges. 

• If you are unsure of the points present in your rewards account, you can take the assistance of the customer care representative. This will make aware of the reward points you have at your disposal.