Credit Card Reward Points

If your credit card works on a reward points model, you will earn points every time you use your card to make purchases. The rate of earning credit card reward points, however, is different for each card. A particular purchase may give you 1 reward point on one card while the same might earn you 5 points with a different card.

Rewards credit cards usually offer accelerated earning on select categories. For example, SBI SimplyCLICK Credit Card comes with a base reward rate of 1 point per Rs. 100. However, when you use your card for online purchase, you can earn 5 points per Rs. 100 and for online spends with select brands like Amazon, BookMyShow, EazyDiner, etc., you will earn 10 points for Rs. 100. In addition, some credit cards also offer bonus reward points on reaching a certain spending milestone. For instance, when you spend Rs. 2 Lakh in a year, the card may give you 5,000 bonus reward points.

Read in Detail: 7 ways to earn maximum rewards on your credit cards

Here is a summary of the different ways how you can earn reward points:

Best Rewards Credit Cards | Check Eligibility for Top Credit Cards

*Amazon / Apollo24X7/ BookMyShow / Cleartrip / Eazydiner/ Lenskart / Netmeds
**Airlines and Air Carriers, Travel Agencies & Tour Operators, Package Tour Operators, Electric Sales, Departmental Stores and Durable Goods

There are many ways to redeem your credit card reward points and the process of redemption may be different for each card issuer. The details are shown below:

How to redeem your reward points online?

You can visit the net banking facility of your credit card issuer. Use your User ID and Password to log in. You can find the various options for reward redemption such as vouchers, merchandise or cash credit (if applicable). Select the item that you wish to get against your points and place an order. If you have chosen a voucher, the code will be sent to your registered mobile number and email ID. In case of merchandise, the item will be delivered to your address.

How to redeem your reward points offline?

You can also visit the nearest branch and ask for a reward redemption form. Fill the same and submit it or post it to the credit card division. It would take 1-15 days for the points redemption. Post that your order will be delivered to your registered address.

How to redeem your reward points through customer care?

Another option of reward redemption is to call the customer care department of your bank. The executive will tell you the options against which you can redeem the points and will guide you through the whole process. You may be required to download the form and email the same. Handling charges, if any, will be charged to your credit card.

Apart from these methods, you can also redeem your reward points with select brands/merchants directly. This feature usually comes with co-branded credit cards. You can use your accumulated points to make purchases with the said brand.

Card issuers usually have a comprehensive rewards catalogue from which cardholders can pick and choose what they wish to get against their accumulated points.

Merchandise- Each bank will have a catalogue with a specific list of products along with the number of reward points needed for that product. Some of the catalogue items are clothes, accessories, books, stationeries, travel merchandise, electronic gadgets, beauty products, etc.

Gift Vouchers- Reward points can be redeemed to get e-vouchers of popular brands, merchants or restaurants.

Air Miles- With some credit cards, you can directly earn air miles instead of reward points. Whereas, some cards allow you to convert the accumulated points to air miles. These miles could be redeemed for air ticket purchase or to get a discount on air tickets.

Cashback- Most cashback credit cards offer direct statement credit instead of points. However, some cards also allow the conversion of reward points into cash credit. The amount can be used to pay out any outstanding balance on your credit card.

Donations- Reward points could be redeemed as a donation to the charities listed with banks. You can select the charities you want to donate to and reward points will be converted and equivalent cash will be given to the charity.

Using your credit card wisely will help you maximize the reward earnings and make the most of your credit card’s features. Here are a few ways how to optimize your credit card rewards:

Use the right card for the right purchase- Not all credit cards reward you equally; each focus on certain spend categories. This is why it is important to understand your rewards program, see where the highest benefits are and use the card accordingly.

Keep track of reward points expiry- Accumulating a significant reward balance will surely help you get a better deal upon redemption. However, you should remember that credit card reward points usually have an expiration date of 2 years from the date of earning, so you must plan the redemption in such a way that you no points are lapsed. Also, some cards offer never expiring reward points.

Redeem for maximum advantage- Just like the reward earning potential is different on each card, the redemption rates are also different. This is why it is important to understand the conversion/redemption rate offered and then choose.

Do not spend only for earning rewards- While rewards are an added advantage, you should not overspend on your card just for the sake of accumulating more reward points. Overspending may lead to difficulty in making full payment which could cause delayed/missed payments resulting in high finance charges.

In addition to these, you should periodically check the terms and conditions of the reward points since banks tend to modify the same. Make sure to pay your credit card dues in full and on time to avoid late payment fees. This will maximize the benefits of reward points. 

What is the use of reward points in credit cards?

A reward point is an added advantage offered by banks as a reward for every purchase you make on your credit card. You can collect these points as you spend on your credit card. Once you have collected enough points, you can redeem them for gift vouchers, merchandise, air miles etc.

Can reward points be converted to cash?

Some banks offer the option of conversion of reward points to cash. The converted amount in cash is credited to your credit card account and can be utilized to make any payments.

How are reward points calculated?

One way of calculating the value of the reward point is by checking the price of the gift available against redemption. For example, a credit card company is offering a Rs 1,000 purse against 5,000 reward points. Thus, each reward point is worth 20 paise.

How can I redeem my credit card points?

Online redemption is the most convenient way to redeem your reward points Most banks offer you home delivery for the products purchased online against reward points. You can also convert these points into air miles and use them to buy air tickets.

What is the benefit of reward points?

The primary advantage of reward points is that they can be used to avail discounts during shopping. Once a certain number of reward points are accumulated, you can redeem these points to avail rebates and discounts on your purchases.