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Credit cards have become an essential part of daily financial management in India. Beyond convenience, they offer a powerful tool to maximise savings through credit card rewards. By optimising your credit card usage, you can unlock significant benefits, such as cashback, travel perks, and exclusive discounts. Maximising such rewards is not just about earning points; it is about making your spending work harder for you, helping you save more and enjoy greater value from every rupee spent.
The following strategies will guide you step-by-step to help you make every rupee count.
Selecting the right credit card is the foundation for maximising credit card rewards. Different cards cater to different spending habits. If you frequently shop online, cards like the SBI SimplyCLICK or Amazon Pay ICICI offer higher rewards for online purchases. For those who travel often, cards with travel benefits and air miles are more suitable. Always compare reward rates, annual fees, and redemption options. Opt for credit cards with good rewards that align with your lifestyle and spending patterns. This ensures you get the most value for every transaction.
Use-case: Ravi loves online shopping and dining out. He chose a credit card offering 5% cashback on online purchases and 3% on dining. This card suits his lifestyle and helps him earn more rewards on what he already spends.
Many credit card rewards are provided for specific categories, such as dining, groceries, or travel. For instance, a card may offer 5X points on groceries and 3X on dining. By using the right card for each category, you can significantly boost your rewards. Analyse your monthly expenses and match your cards to maximise category bonuses. This targeted approach helps you accumulate points faster without increasing your overall spending.
Use-case: Neha uses one card for groceries that gives her 3x points and another card for travel bookings offering bonus air miles. By splitting her spending, she earns extra rewards in each category without extra cost.
Using your credit card for daily expenses is a simple yet effective way to accumulate rewards quickly. Pay for groceries, fuel, utility bills, and online shopping with your credit card. Many cards now offer rewards even for routine expenses, making it easy to grow your points balance. However, always spend within your means and avoid unnecessary purchases just to earn rewards. Consistent use of your card for regular expenses is key to maximising credit card rewards.
Use-case: Amit pays his monthly utility bills, grocery shopping, and fuel expenses using his rewards credit card. Over time, these routine payments helped him accumulate enough points to get a free mobile phone.
Many credit card rewards in India are offered in the form of attractive sign-up bonuses and promotional offers to new customers. These bonuses can be substantial, sometimes worth thousands of rupees in points or cashback. To qualify, you usually need to meet a minimum spending requirement within the first few months of card ownership. Plan your application around times when you expect higher expenses, such as festivals or travel, to easily meet these requirements and maximise your initial rewards.
Use-case: Priya applied for a new credit card before her wedding season. She met the ₹1 lakh spending requirement in three months and earned 50,000 bonus points, which she later redeemed for a holiday package.
Maximising credit card rewards is only beneficial if you avoid interest charges. Always pay your credit card bills in full and on time. Interest charges can quickly erode the value of any rewards earned, making your efforts fruitless. Set up automatic payments or reminders to ensure you never miss a due date. Responsible credit card usage helps you enjoy the benefits of rewards without falling into debt.
Use-case: Sunil always pays his credit card bill in full every month. This habit helped him avoid interest charges, ensuring that the cashback and points he earned translate into real savings, not offset by fees.
Redeeming your credit card rewards effectively is as important as earning them. Different cards offer various redemption options, including flights, cashback, gift cards, and merchandise. For many, redeeming points for flights or hotel stays provides the highest value per point. Cashback is another popular option, offering direct savings. Always compare the value of different redemption choices and opt for those that maximise your rewards’ worth.
Use-case: Kavita redeemed her accumulated points for flight tickets instead of merchandise. This gave her a higher value per point, saving thousands on her family trip compared to redeeming for gift cards.
Credit card rewards often come with expiry dates and specific terms. If you do not redeem your points before they expire, you lose out on valuable benefits. Regularly check your rewards balance and be aware of any upcoming expirations. Also, read the terms and conditions to understand restrictions or limits on redemptions. Staying organised ensures you make the most of your accumulated rewards and avoid missing out.
Maximising credit card rewards is a smart financial strategy for Indian consumers. By choosing the right credit cards with good rewards, focusing on bonus categories, and using your card responsibly, you can enjoy significant savings and exclusive benefits. Stay informed, keep track of your rewards, and make every rupee count.
Compare cards based on your spending habits, reward rates, annual fees, and redemption options. Select one that offers the highest rewards in your top spending categories.
Yes, using different cards for various categories like dining, travel, or shopping can help you earn more rewards and take advantage of multiple bonuses.
Missing a payment can lead to high interest charges and late fees, which can offset your rewards. Always pay your bills on time to retain the full value of your rewards.
Sign-up bonuses can be very valuable if you meet the minimum spending requirement. Plan your application around high-spend periods to maximise your bonus points.
Redeem points for flights, cashback, or gift cards, depending on your preferences. Compare redemption values and choose the option that offers the most value for your points.
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Posted on 16 May
Roshani Ballal
Academy by Bajaj Markets
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