How to Redeem Credit Card Reward Points

1. Welcome Bonuses (Joining Rewards)

This is often the single largest chunk of points you can earn. Most credit card issuers offer a large number of bonus points as a "welcome gift" when you are approved for a new card, usually after you spend a certain amount within the first few months.

2. Base Rewards (Regular Rewards)

This is the standard earning rate on your card. For every specific amount you spend (e.g., for every Rs. 150), you earn a set number of points (e.g., 1 or 2 points). This is the foundation of your earnings.

3. Accelerated Rewards

This is where you can earn points much faster. Many cards offer "bonus" or "accelerated" rewards on specific spending categories. For example, a dining-focused card might offer 5x points at partner restaurants, or a shopping card might offer 3x points on online purchases.

4. Milestone Benefits

To encourage higher spending, banks offer significant bonus rewards when you reach a specific spending threshold within a year. For example, you might receive 10,000 bonus points after spending ₹5 lakh in your anniversary year.

5. Loyalty and Renewal Points

Some banks reward loyalty. They may offer you a set number of bonus points simply for renewing your credit card and paying the annual fee for another year.

6. Bonus Point Promotions

Keep an eye out for special promotions run by your bank. They might offer double reward points on all spending for a limited festival period or on specific partner websites.

How to Redeem Your Accumulated Points

Once you've built up a good number of points, it's time to cash them in. Here are the most common ways to do it:

1. The Bank's Online Rewards Portal

The most common method is to log into your internet banking account and navigate to the credit card or rewards section. There you will find a dedicated rewards catalogue where you can browse and redeem your points for thousands of items.

2. Products and Gift Vouchers

You can redeem your points for physical products (like electronics or home appliances) or for e-vouchers from popular brands like Amazon, Myntra, or Croma.

3. Air Miles and Hotel Points

For travelers, this is often the highest value redemption. Many premium credit cards allow you to convert your bank reward points into frequent flyer miles (like Vistara or British Airways) or hotel loyalty points (like Marriott Bonvoy or Accor).

4. Statement Credit or "Pay with Points"

Some cards allow you to use your points to pay off a portion of your credit card bill. While this is a simple option, it often provides a lower monetary value per point compared to redeeming for travel or vouchers.

What are the Types of Reward Points?

The following are the different types of reward points offered by credit cards:

1. Rewards points cards: On spending each rupees spent the card offers at least one point while some allow earning and redeeming rewards as cash back or points.
2. Travel rewards cards: Enables users to earn travel rewards points or "miles" that come with travel perks which are often co-branded with hotel chains or airlines for brand loyalty benefits.
3. Cashback cards: These cards offer cashback on purchases in the form of bonus category, flat-rate, or tiered rewards cards.
4. Joining Rewards: By spending within a specified number of days, some credit card issuers offer credit rewards with welcome points to the customer.
5. Regular Rewards: These rewards are offered for certain purchases, which is the base rate for rewards, and that will be mentioned in the credit card statement.
6. Accelerated Rewards: These reward points are offered when spending on specific categories such as shopping, grocery, dining, travel, etc., for example bonus points can be earned at partner restaurants if dining-oriented card is used.
7. Milestone Benefits: Milestone rewards can be earned which are bonus rewards that are offered on achieving a certain spending threshold within a specified time duration (usually an anniversary year).
8. International Rewards: By spending on the card while abroad, customers can earn international rewards on this card.
9. Bonus points: For spending a certain amount, bonus points can be earned, for example, per Rs.100 spent customers can earn up to 5 reward points and it will double for every Rs. 100 spent, if customer spends more than Rs.1.20 lakh using their credit card in a month.
10. Renewal points: Loyalty points can be earned on renewing their credit card with the same issuer credit card customers.
11. High-value Purchases: Reward points earned on spending made on this card are credited to the main credit card’s rewards account and supplementary cards can be availed for those family members who have attained 18 years of age.

Factors Affecting Reward Points

The points you earn will depend on the value of your transaction, the type of card you have and the bank which has issued the card and sometimes, also on the place where you have carried out the transaction. However, there are other factors which affect the overall points you earn and their value.

1. Card variant - Card holders with a basic card variant will earn about one or two points for each transaction of around Rs 100 to Rs 250. However, cards that are of a higher variant, i.e. premium or super premium cards, will easily fetch much more points against purchases. For instance, for every Rs 200 that is spent on weekend dining on the Axis Bank My Zone card, the card holder gets to earn up to 40 rewards points. While basic, entry-level cards charge a nominal fee, premium and super premium cards will carry a significantly higher annual and joining fees.
2. Co-branded Cards - Banks and card companies launch co-branded credit cards in association with major stores, brands, fuel providers, airlines, etc. Co-branded cards fetch reward points which may be as much as 5 to 10 times higher as compared to most other cards. For example, in case of airline co-branded cards, cardholders can avail extra reward points and discounts when they purchase tickets of any partner airline with their co-branded card.
3. Where You Spend - The number or value of reward points that you will earn also depends on where you use your card. Using your card to pay for your electricity bill will earn you lesser points than it would when you swipe it at a restaurant to pay for a meal. The reason behind this is that the restaurant may be providing the your credit card company with a higher interchange fee in a bid to increase sales, whereas that may not be the case for a utility services company such as the power corporation.
4. Special Occasion Spending - If you swipe your card to make purchases during special or festive occasions, you can get bonus points. For example, if you swipe your card on Christmas, you are entitled to extra bonus points. Some banks also offer bonus points to premium card holders on joining.

What to Remember About Reward Points?

Here are the following details of that must be remembered about reward points:

1. Minimum Threshold for Reward Redemption: ensure that you have enough points before reward redemption and check for the minimum requirement with the credit card issuer that will help in making the best out of the reward.
2. Expiration Date: Reward points usually expire within two to three years and hence it is important to keep track of the reward points and redeem them before they expire.
3. Redemption Fee: A small fee of Rs.100 may be charged by the bank and after payment customers can change their reward points into gift vouchers, air miles, or other rewards as per customer’s choice.

Benefits of Credit Card Reward Points

The following is the list of benefits of credit card reward points:

1. Few credit card providers allow their cardholders to convert their reward points into cash.
2. Depending on the type of card you hold, you can use your reward points to pay your annual fee.
3. Cardholders can use their reward points to make flight or hotel bookings.
4. Most credit cards also allow the cardholders to get a cashback using their reward points.
5. Credit card providers have a catalogue where cardholders can redeem their reward points to buy select products.

Get in touch with your credit card provider and educate yourself about the reward program available on your card.

What Can You Redeem the Reward Points For?

Browse the bank’s catalogue for issuing credit card reward points to see what products or gifts are offered in exchange for reward points, which could be accessories, clothes, books, beauty products, travel merchandise, and stationery. High-tech products like electronic gadgets are also available.

The following is the list of some popular merchandise items.

Gift Vouchers: This is a great way to obtain extra perks on loyalty as the reward points can be redeemed for e-vouchers of merchants, popular brands, or restaurants.

Air Miles: Some credit cards give air miles instead of reward points to the customers while some cards allow conversion of the accrued points to air miles and Air miles can be redeemed for air ticket purchases or to get a discount on air tickets.

Cashback: Customers convert the reward points to cashback that can be used for payment of outstanding balance on your credit card or for shopping with the credit card.

Donations: Reward points could be redeemed to donate to charity houses listed with banks and the charities you want to donate to. An equivalent amount of cash can be converted from the reward points to be given to the charity.

Transfer Points: A certain amount of reward points earned for their family members or friends can be transferred as allowed by the banks, provided they also hold credit cards from the same bank, for example Axis bank allows this.

How Can You Earn Maximum Credit Card Reward Points?

The following are the ways to earn maximum credit card reward points:

1. Keep track of expiry of the reward points: plan accordingly to avoid losing the reward points as they have a two-year expiration date while some card cards do offer reward points that do not expire.
2. Use a card that suits your lifestyle and financial requirements: Ensure that the reward system is suitable for your financial needs and their lifestyle, for example, customer must opt for a card that provides maximum benefits on dining who loves to eat out at restaurants.
3. Redeem for maximum advantage: Make sure to select the card that provides maximum conversion rates as it may vary depending on the card. Depending on the category and specific products, the reward redemption rate will also change and hence it is vital to check the rates before redeeming.
4. Do not spend only for earning rewards: Make sure not to overspend, as rewards on cards are bonuses as overspending will make it difficult to hefty charges on credit card bills.

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