Credit card usage has been exponentially rising over the past decade as banks are providing numerous benefits to these cardholders. The Indian market is flooded with a variety of best credit cards in India targeting customers with different spending habits and interests. If you are a traveler, then you can choose a card that gives maximum discounts and offers on travel. In case you are a shopaholic, getting a shopping card can help you avail discounts on various products.
How great would it be if you can save on every penny you spend? Is it possible? The answer is “Yes”. It is definitely possible. Banks offer credit cards that accumulate reward points on every transaction you make. Although these reward points are not equivalent to the actual amount spent, they are still very beneficial. Once you have racked up your reward points, you can use it to either avail discounts on your monthly bill payments or redeem it against exciting gifts from partnered stores.
Table of Contents
HOW TO EARN REWARD POINTS?
The rate of earning credit varies from card to card and from bank to bank. The following are the ways in which you can earn your reward points:
- WELCOME REWARDS
Banks credit the accounts of customers with reward points as a joining gift. You can earn a few 1000 points just by paying the joining fee or by spending on your credit card within the first 90 days of issuance.
- REGULAR REWARDS
For every spend of ₹100, one can earn from 1-point to up to 10 points or even more. These reward points are then credited into the cardholder’s account immediately after the transaction.
- ACCELERATED REWARDS
Extra reward points can be earned when one spends on partnered merchants. For example, if you own a shopping card, then you will get extra reward points for spending on clothes at partnered stores. Similarly, if you are a travel cardholder, then you can receive reward points for spending on partnered hotels and restaurants.
- HIGH-VALUE PURCHASES
Reward points are also credited every time the cardholder carries out high-value transactions. These transactions include buying jewellery, home appliances, travel bookings and vacations.
- INTERNATIONAL REWARDS
As the name suggests, one can earn reward points on every spend they make when they are in a different country.
- BONUS POINTS
Cardholders get bonus points if they exceed the monthly specified credit limit. If you spend more than ₹1,50,000 on your credit card every month, then you will receive twice the reward points for every ₹100 you spend beyond the limit.
- LOYALTY POINTS
Credit card issuers offer reward points upon the renewal of your credit card. This loyalty can fetch a significantly high amount of reward points.
- SUPPLEMENTARY CARD POINTS
Banks allow cardholders to buy add-on-cards for their family members above the age of 18. Reward points earned from this purchase of a supplementary card are directly credited into the primary cardholder’s account.
HOW DOES REDEMPTION WORK?
- Some banks allow you to be eligible for redemption only when you have a minimum number of reward points. There are also a few cards that require no minimum reward points for redemption.
- Rewards points are generally valid for only 2 or 3 years. Thereby, you should regularly check your reward points and redeem them on time.
- A redemption fee of ₹100 is usually levied for processing and handling the redemption process.
WHAT ARE THE MODES OF REDEMPTION?
- INTERNET BANKING
One can redeem their points by logging into their official net banking site. In order to do such a redemption, your credit card should be linked to your savings account. Go to the “Reward points” tab on the account summary page and click “Redeem now”. You will be directed to the page with gift options. The products will be delivered to your address within 10 days and any charges for handling this redemption will be charged on your credit card.
- MOBILE APP
Download your bank’s mobile app. In the app, go to the “Rewards” section and click on “Redeem now”. You can choose from the various categories available and confirm your redemption.
To redeem via post, you can download the redemption form from the bank’s website, fill it and send it to the bank’s postal address. Delivery of the merchandise or voucher will take 10 – 15 days from the date of reception of the form by the bank. The reward points in your account will be automatically reduced.
- CUSTOMER CARE
Another way of redeeming one’s reward points is by approaching the customer care centre. An executive will walk you through the details and you can place your redemption order. You will also be required to fill out the redemption form of the bank.
Cardholders can directly go to the stores or online websites of partnered merchants and redeem their reward points directly. Any amount exceeding the reward points will be charged on your credit card.
WHAT CAN YOU REDEEM YOUR POINTS FOR?
You can choose to buy the products listed in the rewards catalogue of your bank.
- GIFT VOUCHERS
Reward points can also be converted into gift vouchers of your favourite stores. You can use these vouchers directly at the store or in online shopping platforms.
- AIR MILES & ROOM MILES
Banks usually partner with certain airline companies and hotel companies. You can convert your reward points to air miles or room miles while travelling.
You can exchange your reward points for cashback on your monthly bill payments or your online purchases.
Banks have tie-ups with various charities. You can make donations to sponsor mid-day meals or education for children. You can also contribute to helping the disabled, blind, elderly, and the poor.
- TRANSFER POINTS
Some banks provide the opportunity to transfer your reward points to your supplementary cardholder’s account.
Thus, the better you understand how your credit card points system works, the more you’ll get out of your rewards.
Read Also: The Best Ways to Improve Your Credit Score