Credit Card reward points

Credit card companies offer reward points as a way to incentivize customers to use their credit card for various transactions such as bill payments, shopping, dining, and travel. These reward programs allow customers to earn points for every purchase they make using the card. The points can then be redeemed for various benefits such as cashback, discounts, merchandise, gift vouchers, and air miles. However, it’s important to note that the value of reward points is often lower than the actual amount spent on the credit card. Accumulated reward points do not translate into a direct refund of your money spent, but rather offer additional perks provided by the bank.

How does Credit Card Reward Points Work?

Credit card reward points are offered by credit card companies to incentivize customers to use their cards for transactions. The reward points can be earned by using the credit card to make purchases, paying bills, dining out, traveling, and more. Different credit cards offer different reward programs and schemes, and the number of points earned per transaction can vary.

For example, a credit card may offer 1 reward point for every Rs. 100 spent. Some credit cards may offer accelerated rewards for specific categories such as dining or travel expenses.

Once enough reward points have been accumulated, they can be redeemed for a variety of benefits such as air miles, cashback, gift vouchers, merchandise, and more. The value of each reward point can differ based on the credit card company and the redemption option chosen.

How to Earn Reward Points on your Credit Card?

There are several ways to earn reward points on your credit card:

  1. Welcome Rewards – When you sign up for a credit card, some banks credit your rewards account with welcome points. You can also earn points by spending on your credit card within the first 90 days of card issuance.
  2. Regular Rewards – For every Rs. 100 you spend on your credit card, you will earn a set number of reward points. The number of points you can earn per Rs. 100 spent will vary depending on the type of card you have.
  3. Accelerated Rewards – You can earn extra points when you spend on special categories such as shopping at partner stores, partner restaurants, dining expenses, entertainment, and more.
  4. High-Value Purchases – Spending on purchases such as jewelry, travel bookings, and holidays can fetch more reward points.
  5. International Rewards – Some credit cards offer extra points for spending on the card while you’re abroad.
  6. Bonus Points – You can earn bonus points when you spend a certain amount on your credit card. For example, you can earn double the reward points for every Rs. 100 spent after spending a certain amount in a month.
  7. Loyalty Points – Credit card companies offer rewards when you renew your credit card. You can earn a significant sum of points for your loyalty.
  8. Supplementary Cards – You can also earn reward points for spends made by your family members using supplementary cards. These points will be credited to the main credit card’s rewards account.

How to Maximize the Rewards on your Credit Card?

Here are some tips on how to make the most of your credit card rewards:

  1. Use the right card for the right purchase- Different credit cards offer different rewards for different types of spending. To get the most out of your card, use it for the purchases that offer the highest rewards.
  2. Keep track of reward points expiry- Your reward points will have an expiration date. Be sure to use them before they expire or check if your card offers never-expiring points.
  3. Redeem for maximum advantage- Each card has different redemption rates. Before redeeming your points, understand the conversion/redemption rate to get the most value out of your points.
  4. Do not spend only for earning rewards- While earning rewards is great, don’t overspend just to accumulate more points. Overspending can lead to missed payments, resulting in high finance charges.
  5. Check terms and conditions- Banks may change the terms and conditions of the rewards program periodically. Be sure to check for any updates.
  6. Pay your credit card dues on time- Paying your credit card dues in full and on time will help you avoid late payment fees and maximize the benefits of reward points.

Things to know before Redeeming your Reward Points

When you use your credit card, you earn reward points. You can redeem these points in different ways, depending on what your credit card company offers. But there are a few things to keep in mind before you redeem your points:

  • Minimum Reward Points: You need to have earned a certain number of points before you can redeem them. Check with your credit card company to find out what the minimum requirement is.
  • Expiration Date: Your reward points have an expiration date, usually between 2 to 3 years from when you earned them. Make sure to check your points regularly and redeem them before they expire.
  • Redeem Fee: Your credit card company may charge a fee for redeeming your points, usually around Rs. 100.

Once you know these things, you can redeem your points for things like gift vouchers or air miles. Converting your points to gift vouchers is usually easy and hassle-free.

How to Redeem Your Credit Card Reward Points?

Internet banking: You can use the bank’s website to redeem your credit card reward points. Just log in with your username and password, and you can use the points to pay your credit card bill, see your statement, and choose from a variety of rewards like vouchers, merchandise, or cash credit. Once you’ve picked your reward, place your order and it will be delivered to your home in 10 days.

Customer Care: You can also call your bank’s customer care to redeem your reward points. They’ll tell you how many points you have and help you choose a reward. Then, they’ll place the order for you.

Post: To redeem your reward points by post, you’ll need to visit a nearby bank branch to get a form. Fill out the form and mail it to the bank’s credit card division. Within 10 days, the reward will be shipped to your home, and the points will be taken from your account.

Partner-store: Some banks have partner stores where you can use your credit card reward points to shop. If there’s any money left over, it will be charged to your credit card.

So, pick a credit card that works best for you and use it wisely to earn and redeem reward points easily.

What can you Redeem Reward Points For?

Banks have rewards programs where you can get different kinds of rewards. Some banks offer more rewards than others. Here are some examples of the rewards you can get by using your points.

What can you Redeem Reward Points For

  1. Merchandise: Look at the rewards catalogue provided by your bank to find out what products are on offer and choose the ones you like. You can select one product or multiple products, and they can fall under various categories such as apparel, books, groceries, lifestyle, food, beverages, etc.
  2. Gift Vouchers: You can redeem your points for gift vouchers valued at Rs. 100 to Rs. 5,000 or more. You can use these vouchers to shop at the respective store or online store for products you like. Any remaining balance can be paid with cash, debit card, credit card, etc.
  3. Air Miles: You can convert your reward points into Air Miles with partner airlines. Some of the Airlines that participate in rewards programmes are:
  4. Room Miles: Banks partner with hotels for their Rewards Programme. Under these schemes, customers can convert their reward points to room miles which they can redeem at participating hotels.
  5. Cash Back: Convert your points for cash back which can be used to reduce your credit card outstanding balance.
  6. Charity: Use your points to make a donation to a charity that is listed with the bank. You can make donations to sponsor midday meals or education for children, contribute to helping the disabled, blind, elderly, and the poor, or towards health, environment, employment, traditional employment, women and youth.
  7. Transfer Points: Some banks allow customers to transfer a certain limit of reward points earned to their family members or friends who also hold credit cards from the same bank.

Credit Card Reward Point Benefits

When you use your credit card, you earn reward points which can bring many benefits. For example, you can convert the points into cashback and use it to pay your credit card bill which will help you save money. Your credit card company partners with different companies so that you can redeem your points for gift items or vouchers. This can reduce the cost of the item you want to buy and help you save money.

If you travel frequently, you can earn reward points on your bookings and use them to get discounts. You can also get vouchers from the reward points which can be used to buy groceries or other gift items.

How You Might Be Losing Out On Credit Card Rewards?

To be more aware, credit cardholders should:

  1. Read the terms and conditions that come with the credit card, even if it seems boring.
  2. Choose a credit card with a reward system that suits their lifestyle and financial needs. If they don’t travel frequently, they shouldn’t choose a card that offers flying benefits or AirMiles.
  3. Contact the customer care executive to learn about the rewards account and what rewards are available to them. This will help them become familiar with what they can get from their credit card.

Rewards Catalogues:

Banks give their customers a list called a “catalogue” that shows the stuff you can get with your rewards points. You can find this list on the bank’s website or the rewards website. Sometimes the rewards website is a different website just for rewards. This helps customers keep track of their rewards better. The catalogue shows things like items, vouchers, donations, and miles that you can get with your rewards points.

Frequently Asked Questions (FAQs)

Credit Card Reward Points

Banks give you a special prize called a "reward point" every time you use your credit card to buy things. You can keep collecting these points as you keep buying things with your credit card. When you have enough points, you can use them to get free things like gift cards, items you want, and even travel miles.
You can earn reward points by using your credit card to make purchases. Each time you use your credit card to pay for something, you'll earn reward points. Usually, banks will reward you for every Rs. 100 spent on the card. You can earn reward points by paying your bills, shopping in stores or online, paying for travel, and other expenses. The more you use your credit card, the more reward points you'll earn.
You can redeem your credit card points by logging into your account on the bank's website or mobile app and accessing the rewards section. There, you can browse through the available redemption options, such as merchandise, gift vouchers, cashback, air miles, etc. Choose the redemption option you prefer and follow the instructions to place an order. Some banks also offer the option to redeem points by contacting their customer care or visiting a bank branch. Keep in mind that the redemption options and the value of points may vary depending on the bank and the credit card you have.
The number of points required to redeem rewards varies between credit card issuers and the type of rewards offered. Generally, credit card issuers have a rewards catalog that lists the number of points required for each reward. You can check your credit card issuer's website or contact their customer service to know the exact number of points you need to accumulate for redemption.
Typically, there are no charges applicable on redemption of reward points. However, it is always a good idea to check with your bank or credit card issuer for any specific terms and conditions related to the redemption of your reward points. Some banks may have a minimum threshold for redemption or may charge a small fee for certain types of redemption, such as for transferring points to another account or for redeeming points against cashback.
It depends on the policies of the bank or credit card company. Some may allow you to cancel the redemption request before the points are processed or the reward is shipped, while others may not allow cancellations. It's best to check with your bank or credit card company about their cancellation policy for reward point redemptions.
The benefit of reward points is that they allow you to earn points on your credit card transactions which can later be redeemed for various benefits like merchandise, gift vouchers, air miles, cashback, and more. This can help you save money on your purchases or travel, and also provide you with other rewards and benefits that you may not have been able to afford otherwise. Additionally, many credit card companies offer special promotions and bonuses to customers who accumulate a certain number of reward points, making it even more beneficial to earn and redeem them.
Banks give you lots of choices for using your reward points. You can use them to get things from the rewards catalogue, air miles, cashback or vouchers.
The process of converting your credit card reward points to cash may vary depending on your bank's policies. Generally, you can log in to your online banking account or contact your bank's customer service and request to convert your points to cashback. Once the conversion is done, the cashback amount will be credited to your credit card account, which you can use to offset your outstanding balance or withdraw as per the bank's terms and conditions. It's recommended to check with your bank for specific details on how to convert your reward points to cash.
Yes, some banks allow customers to use their reward points to pay their credit card bills. You can check with your bank to see if they offer this option. If available, you can use your accumulated reward points to offset your credit card outstanding balance. The value of the points will be converted into cash and adjusted against the outstanding balance.
It depends on the specific credit card and rewards program. Some credit cards and rewards programs may allow you to transfer points to another credit card within the same program or to a partner program. However, there may be restrictions or fees associated with transferring points, and not all programs may allow point transfers. You should check with your credit card provider or rewards program for specific details and instructions on how to transfer points.
Yes, reward points can expire. The expiry date of reward points depends on the terms and conditions of the credit card and the rewards program. Some credit cards have reward points that never expire, while others have an expiry period ranging from one to three years. It is essential to check the terms and conditions of your credit card to know the expiry date of your reward points.

Leave a Reply

Your email address will not be published. Required fields are marked *