How to Maximise the Benefits of Your Credit Card Reward Points?

How best to use credit card reward points? Read this article to know more.

Credit Card Rewards

Credit cards are gaining traction as a part of personal finance in India for convenience and ease of use. Not only do they offer a way to purchase items without carrying cash, but they also come with added benefits, such as reward points that can be accumulated and redeemed for various perks. Let’s explore how to use your credit card reward points best and unlock their full potential.

What is a Credit Card? How Can it Be Useful?

A credit card is a payment card issued by a bank or financial institution that enables users to take credit up to a pre-approved credit limit to purchase products or services. 

Credit cards can be helpful for many reasons, such as cashless transactions, building credit, accumulating reward points, access to funds during an emergency and more.

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What are Credit Card Reward Points, and How to Best Use Them 

Credit card reward points are loyalty programs offered by issuers of credit cards to encourage cardholders to use their cards. These points are earned by spending money using a credit card and can be redeemed for various rewards such as cashback, merchandise, travel, or gift vouchers.

Reward points earned per rupee spent depend on the credit card type and the rewards program. For example, some cards may offer a flat rate, such as one reward point per Rs. One hundred spent, while others may offer bonus points for specific categories only, such as travel, dining and more.

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How to Maximise Benefits from Credit Card Reward Points?

Below are some strategies to help you extract maximum mileage out of your credit card reward points:

  • Using the welcome bonus: If you use your credit card within the first three months after getting it, some banks may give you bonus points as a welcome gift. You can earn even more points if you spend money shopping at partner stores, eating out, or attending entertainment events.
  • Utilising limited period offers: Many credit card issuers offer special deals during festival seasons to enable you to shop more and earn more reward points. For example, a bank may offer more reward points for grocery shopping during Christmas or Diwali. So use your credit cards during these days. 
  • Using reward points as per requirement: Credit card holders can use them to gift e-vouchers or cards to their loved ones. The recipient can browse various categories to choose a specific product per requirement.
  • Redeeming reward points before expiry: Make sure to utilise them before expiration. You can use the bank's dedicated portal or app to track and redeem them. In addition, some credit cards offer extra rewards when you spend a certain amount each year, so it's a good idea to focus your purchases on one or two cards to get the most rewards possible.
  • Opting for co-branded credit cards as per spending patterns: Co-branded credit cards are issued by a bank/ financial institution in collaboration with a brand, like an airline or a retail chain issues. These cards offer unique benefits and rewards to customers when they use the card to purchase from the brand or its partners. These benefits may include discounts, cashback, reward points, and more. Some popular co-branded credit cards in the country include Yatra SBI Credit Card (beneficial for frequent travellers), Axis Bank Neo Credit Card (beneficial for shopaholics), JetPrivilege HDFC Bank Diners Club (beneficial for frequent flyers) and more.

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Credit card reward points can be redeemed for various things, from shopping to charity donations to travel. With so many options available, choosing the right credit card that offers benefits that suit your lifestyle and spending patterns is essential. By doing this, credit cards can be an intelligent way to manage your expenses and get the most out of them. In addition, being a smart credit card user and understanding the ecosystem can help you learn to manage your finances more responsibly and risk-free.


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