Reward points and cashback are the two most common benefits offered on credit cards. However, cardholders often have queries about how they work, which is better and how to maximize these benefits. To help you, we have curated a list of the most common queries that cardholders come across while using or opting for a Rewards Credit Card or a Cashback Credit Card.
A rewards credit card offers you value-back in the form of reward points, which can be redeemed to get vouchers, merchandise or statement credit. Whereas, a cashback credit card gives you back in the form of cash credit either directly into your card account or into a linked wallet. The choice between the two, however, depends on your preferences.
Here are few points about rewards and cashback credit cards that could help you decide which one is suitable for you:
| Rewards Credit Cards | Cashback Credit Cards |
| Value-back is offered in the form of reward points. | Value-back is offered in the form of direct cash credit. |
| 1 reward point does not equal to Re. 1; monetary value of points is usually lesser. | Cashback is mostly equal to its monetary value. |
| Points are accumulated in the card account and usually come with an expiry date. | Cashback is either credited into the card account or linked wallets. |
| Accumulated points can be redeemed to avail items from the rewards catalogue. | Cashback is directly credited and is usually adjusted against your credit card dues. |
| Most of the credit cards in India are based on a reward points model. | There are only a limited number of cashback credit cards in India. |
| You can find co-branded rewards credit cards that offer extra rewards on shopping with the associated brands. | Co-branded cashback credit cards offer a higher cashback rate on shopping with the associated brands. |
In addition to rewards or cashback, it is important to look at the brands or categories where the card offers better rewards along with the annual fee that it charges.
For example, SBI Card PRIME is one of the best rewards credit cards but it charges an annual fee of Rs. 3,000. While it comes with an excellent reward rate for dining, grocery and movies, there are no extra benefits on online shopping. So, for someone looking for benefits on online shopping, Flipkart Axis Bank Credit Card or Amazon Pay ICICI Credit Card would be better alternatives, both offering direct cashback.
The points that you can collect by making every purchase using your credit card is known as the Credit Card Reward Points. The value of reward points varies from bank to bank and card to card along with your spending capacity. There are various types of reward points such as regular reward points, accelerated rewards, sign-up rewards, renewal points and much more offered on credit cards.
For instance, with a particular purchase you might be able to earn 1 reward point on one card and with the same purchase you might even earn 5 points with a different card.
Let us try to understand with another example, with SBI Card Elite you can earn 2 Reward Points on every Rs. 100 spent whereas with Standard Chartered Manhattan Platinum Credit Card, you can earn 2 Reward Points on every Rs. 100 spent.
Take a look at the top credit cards that offers reward points-
HDFC credit card reward points are offered for making purchases with the card across retail and other spends. You can use the accumulated reward points as per HDFC Rewards Catalog among three options- ‘Product Catalog’ for the purchase of appliances, personal care products, gadgets, and lifestyle benefits; ‘Insta Voucher’ for discount vouchers across top merchants, and for ‘Cash Redemption’ to convert your points into cash balance, that you could be used to pay the statement balance as well.
The steps to redeem HDFC Credit Card Reward Points are as follows:
Note that HDFC Bank charges a redemption fee of Rs. 99. Further, you can redeem your reward points with a minimum of 500 reward points.
Click here to know more about HDFC Credit Card Rewards Redemption.
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