How to Use Credit Card Reward Points

A lot of factors can affect the reward points that you receive for your transactions. Some of the important ones are discussed here:

Type of Transaction: Different credit cards come with different rewards structure. You might get extra rewards for certain types of expenditure. For example, credit card holders can earn more reward points when they use their credit card to shop online or at merchant outlets that are affiliated with the issuer or the rewards programme. Generic transactions such as paying their utility bills, medical bills, etc. may not award points at all. Some transactions bring better rewards than others. For instance, flight bookings bring great rewards especially for credit cards targeted at frequent travellers.

Type of Credit Card: Credit card rewards also vary with the type of credit card a user holds. The reward points earned with transactions using the entry-level credit cards are considerably lower than the reward points earned with transactions using premium credit cards.

Company Collaboration/Tie-up: Many banks collaborate with retail chains, merchants, and premium brands to offer special rewards and discounts to their customers for using their credit card to purchase partner products. When a credit card holder uses his credit card to pay for a purchase from a collaborating brand, he earns more reward points depending on the offer. Some of these are permanent while others have a limited offer period.

Special Occasions: A lot of banks offer bonus reward points when a customer shops using his credit card on a special occasion such as Valentine’s Day, Mother’s Day, New Year’s Eve, etc. Some banks also offer extra reward points when a user carries out his shopping transactions using his credit card on his birthday or during the whole birthday month.

Reward Programme Registration: With a lot of credit cards, you are automatically enrolled in the issuer’s rewards programme when you get the card. However, for a few types of credit cards, a user must sign up and register for the rewards programme to start availing the benefits. Transactions carried out before the registration/enrolment dates are not considered for allotting reward points.

Since each reward programmes is different from others (for instance, based on the type of card and the issuing bank), it is important to read the terms and conditions of the credit card reward programmes to make the best use of the reward points.

For making the most out of your card, you must know the strategies to optimize your credit card rewards. If you have been wondering about how to use credit card reward points, here are a few options against which you can redeem your points:

Rewards Catalogue: Many banks and financial institutions have a separate rewards website or page that you can visit to redeem your credit card reward points. If you want a product but do not have enough reward points to claim it, some of the banks allow you to pay the rest of the amount using your credit card.

e-Gift Vouchers: If you like online shopping but did not find anything from the rewards catalogue, you can get an e-gift voucher issued to you. The e-Gift voucher is usually emailed to the registered email address or the one provided while redeeming the reward points. It contains the Gift Voucher Code, PIN, as well as the expiry date of the gift voucher. You can use this gift voucher as per the set terms and conditions to buy whatever the terms allow before its expiry date.

Gift Cards: Many banks and financial institutions have tie-ups with leading merchants to provide gift cards. You can get various gift cards including Shopper’s Stop, Lifestyle, Westside, Pepperfry, ShopClues, etc. delivered to your doorstep. Gift cards are usually delivered in the denomination of ₹ 500. If you redeem reward points worth ₹ 2,000, you may receive 4 gift cards of the chosen merchant worth ₹ 500 each if they do not have a higher denomination. All these work like prepaid cards that cannot be re-loaded and come with an expiry date as well.

Credit Card Bill Payment: Select credit card issuers, such as CitiBank, allow credit card holders to use their reward points towards the payment of their credit card bill. You need to go to the rewards programme website and select the redeem points option to see if your credit card issue offers this service.

Convert into Miles: You can also convert the accumulated reward points into the loyalty points of an airline or hotel chain of your choice. In most of the cases, the banks specify the partners with which you can get the points converted. If not, you should call the bank to ask about the same. The customer care executive will guide you through the process.

Donations: Some banks also give you the option of donating for a cause using your reward points. You can select the charity of your choice and donate to it.

A few banks also offer instant redemption options on select credit cards. It is important to know and understand your credit card reward points programme to make the most of it. Be sure that you choose your credit card appropriately and use your card to maximise the points you earn.

Following are a few ways how you can redeem your reward points:

Apply Online: All banks allow customers to redeem their credit card reward points using their rewards programme website or page. The customer can login with their login ID and password to see their reward point balance and also redeem them.

Contact Customer Care: The second most common option offered by credit card issuers for reward redemption is to contact their customer care. You can ask them about the procedure to redeem your reward points. Some banks also allow you to raise your reward point redemption request through customer care.

Post a Request Letter: A few banks have a designated office to answer the customer’s queries about rewards and reward points. You must post a letter with the redemption request to the address mentioned on the bank’s website.

It is really easy to earn reward points and redeem them to get gifts and merchandise. But sometimes, knowing your reward programme better and keeping tabs on the updates can help you make the most of it. Here are a few important things to know about credit card rewards program:

• Rewards come with an expiry date. Most of the rewards are valid for 2 years. To allow the customers make better use of rewards, some banks offer rewards that never expire but such cards are only a few. You can find the details of rewards expiring in near future on your credit card statement. Stay aware of these timelines so that you don’t lose such points.
• If you have defaulted on credit card payment, your bank may forfeit the accumulated points. So if you are rolling over the balances, make sure not to make it a habit. Also, even if your bank does not forfeit the rewards, the overall value would be nullified if you keep on paying hefty interest on the card.
• Learn about the reward programmes of your credit cards so that you can use them for the best rewards. For example, if your card gives more rewards on booking travel tickets, use the same for travel instead of a shopping card that does not offer extra privileges on travel.

Reward points are the perks on your credit cards and they have been designed to encourage you to make purchases. You should use them smartly so that you don’t make purchases just for earning rewards.