Banks that offer credit cards generally reward their credit card holders with gifts, freebies, discounts and other deals. Reward Programmes encourage customers to use their credit card for bill payments, shopping, dining, travel and more. In return, customers can rack up points and redeem them later for a variety of perks and gifts. Reward points are valued at much lesser than the value actually spent on the credit card, but it is only a perk offered by the bank, and is not a way to earn your money back. But once you have accumulated enough reward points, you can redeem them for air miles, merchandise, cash, gift vouchers, and much more.
How to earn Reward Points:
Each bank offers different methods of earning points. Points earned will vary between different cards based on whether the card is a basic credit card or one that has high priority.
Credit card companies usually offer the following schemes:
- Welcome Rewards - Some banks welcome the customer into being a credit cardholder by crediting their rewards accounts with welcome points. You could earn a few thousand reward points from the get go. You can also earn points by spending on your credit card within the first 90 days of card issuance.
- Regular Rewards - For every Rs. 100 you spend on your credit card, you will earn a set number of reward points. This can range from 1 point up to even 10 points or more.
- Accelerated Rewards - You can earn extra points when you spend on special categories such as shopping at partner stores, partner restaurants, other dining expenses, entertainment and so on. For example, if your credit card is travel-oriented, you can earn extra points when you spend on bus tickets, train tickets or flight tickets. If your card is a shopping-oriented card, you might earn extra points on retail purchases.
- High-value Purchases - Spending on purchases that are of high-value such as jewelry, travel bookings, and holidays can fetch more reward points.
- International Rewards - Some credit cards can earn extra points for spending on the card while you’re abroad.
- Bonus Points - You can earn bonus points when you spend a certain amount on your credit card. For example, you earn 1 reward point for every Rs. 100 spent. But you spend Rs. 1.5 lakhs on your credit card in a month. Any more expenditure in the month will earn double the reward points for every Rs. 100 spent.
- Loyalty Points - Credit Card companies also offer rewards upon renewal of your credit card. For your loyalty to the credit card, you can earn a significant sum of points.
- Supplementary Cards - You can avail of supplementary cards for your family members. They should have attained the age of 18 years. Any points earned for spends on this card will be credited to the main credit card’s rewards account.
|Reward Points||How to earn points||When will it be credited|
|Welcome Points||By becoming a cardholder||Upon Paying annual fees or joining fees|
|Regular points||By spending on the card||After the purchase is made|
|Accelerated Points||By spending on special categories||After the purchase is made|
|High-value Purchase||By spending on expensive items or costly travel||After the purchase is made|
|International Points||By spending overseas||After the purchase is made|
|Bonus Points||By spending over and above the required limit||After the purchase is made|
|Loyalty Points||By renewing your credit card||Upon paying the renewal fees|
|Supplementary Cards||By spending on the supplementary card||After the purchase is made|
Reward Points Redemption:
Redeeming your reward points can be done in a number of ways. This will depend on the methods offered by the bank. Before you opt to redeem your accumulated points, you should check the following points.
- Minimum points required - According to your credit card features, you will either require a minimum number of points to be eligible for redemption or there may be no minimum points required. But every reward will cost you a number of points that you will require to be able to redeem your reward points.
- Expiration Date - Almost all reward points earned have an expiration date. Banks set this date at around 2 or 3 years from when they were earned. Check your reward points regularly and redeem them on time.
- Redemption Fee - There is usually a fee associated with rewards redemption. This fee is approximately Rs. 100 which is charged for handling and processing the reward.
You can then go ahead and redeem your rewards for a gift of your choice. Banks offer various methods that make it convenient for customers to convert their points into gifts quickly and without any hassle.
Modes of Rewards Redemption:
- Online - Redeem your points easily through your online banking account. Simply register for online banking on your bank’s website. Use your User ID and password to log in. You might have to link your credit card to your savings account in order to access your credit card information. Once this is done, you can view your credit card statements, pay your credit card bill, view your rewards summary and redeem your points. You will have access to the rewards catalogue to view and choose the gift you like best. You can pick your rewards as per your points balance. Place your order and the merchandise or gift of your choice will be delivered to your registered postal address. It can take approximately 10 business days for your order to be processed and delivered. Any handling charges will be charged to your credit card.
- Customer Care - You can contact the customer care of your bank via phone or email. Over the phone, a representative will walk you through your points balance and the process of redemption. You can place your request for redemption with the representative. Provide your required details and the product you have chosen. You might be required to download the redemption form, fill it up and email it to the customer care. It can take approximately 10 business days for your order to be processed and delivered. Any handling charges will be charged to your credit card.
- Post - You can download the rewards redemption form or get one at a bank branch. Fill it in and mail it to the bank’s credit card division postal address. From the date of reception of the form, it can take 10 to 15 working days for your reward to be shipped to your registered address. The points will be reduced from your rewards point balance and the merchandise or voucher will be delivered to you.
- In-Store - Some banks have partnered with a number of retail stores and online stores where customers can shop and pay for their purchases with their reward points. Any balance amount for the purchase will be charged to the credit card.
What can you redeem Reward Points For?
Banks offer a variety of rewards to choose from under their rewards programmes, some more than others. Listed below are some of the rewards you could redeem your points for.
Merchandise - Refer to the rewards catalogue provided by your bank to see what products are on offer that match your points balance. Choose merchandise that you would like which could either be one product or multiple products. Merchandise can span across various categories that include:
- Electronics and Appliances
- Music Accessories
- Apparel and Accessories
- Home and Decor
- Health and Wellness
- Travel Accessories
- Personal Care
- Movie Tickets
- Bus Tickets
- Air Tickets
- Hotel Bookings
- Mobile Recharge
- DTH Recharge
- Gift Cards
- Gift Vouchers - You can redeem your points for gift vouchers which are valued at Rs. 100 to Rs. 5,000 or more. Gift vouchers can be used to shop at the respective store or the online store. Gift voucher categories can include apparel, books, groceries, lifestyle, food, beverages and more. With a gift voucher, you can redeem it for products or items from the brand’s store. Any remainder amount can be paid by means of your choice i.e., cash, debit card, credit card, etc.
Air miles - Credit Cardholders can convert their reward points into Air Miles with partner airlines. Some of the Airlines that participate in rewards programmes are:
- Jet Airways - JetPrivilege
- Singapore Airlines - KrisFlyer
- Air India
- Virgin Atlantic
- Air Canada
- American Airlines
- Delta Airlines
- Singapore Airlines
- Frontier Airlines
- Southwest Airlines
- British Airways
- Cathay Pacific
- Emirates Airlines
- Etihad Airways
- Qatar Airways
Room Miles - Banks sometimes partner with hotels for their Rewards Programme. Under these schemes, customers can convert their reward points to room miles which they can redeem at the hotels. Some participating hotels include:
- Cash back - Convert your points for cash back which can be either used against your credit card bill or can be used to shop on your credit card. Cash backs are great to reduce your credit card outstanding balance.
- Charity - You can use your points to make a donation to a charity that is listed with the bank. You can make donations to sponsor midday meals or education for children. You can also contribute to helping the disabled, blind, elderly, and the poor. Charities under the rewards programmes also include contributions towards health, environment, employment, traditional employment, women and youth. Your reward points will be converted into the cash value and donated to the charity of your choice.
- Transfer Points - Some banks allow customers to transfer a certain limit of reward points earned to their family members or friends who also hold credit cards from the same bank. Axis Bank is one that provides this facility to transfer points as a gift to a family member who is an Axis Bank customer.
How You Might Be Losing Out On Credit Card Rewards
A majority of credit cardholders often get confused about credit card rewards. Especially when it comes to flyer and hotel loyalty rewards. This means that cardholders are actually missing out on a lot of advantages and in some sense, real money. According to a recent survey conducted by NextAdvisor, a lot of cardholders don't understand the reward system that banks offer through credit cards. Around half of the people interviewed weren't aware of the perks of the reward system. When it comes to earning and utilising AirMiles, loyalty programs offered by hotels, and credit card rewards, there is hardly any awareness. Almost 47% of the people surveyed said that they were not aware how many reward points they have collected. At the same time, 35% were not aware of their tally of frequent flyer miles. Also, 35% don't keep a count of their credit card rewards.
There are credit cardholders who do not take out time to sort through the reward points that they collect. This constitutes 36% who fly frequently, 33% who have hotel loyalty programs, and 24% who have credit card rewards points. According to Julie Myhre-Nunes, the problem arises from two main sources. Credit card companies do not make it clear how many reward points the cardholder must have collected and how to redeem them. Another factor is that individuals often apply for credit cards that do not suit their financial needs.
Here are a few tips on how a cardholder can be more aware:
- Cardholders must read the fine print that comes with credit cards. No matter how boring it must be, they should read the terms and conditions also.
- Cardholders should make sure that the reward system suits their financial needs and their lifestyle. If they aren't frequent flyers, they should not opt for cards that provide flying benefits or AirMiles.
- If the cardholder has a rewards account that they are unsure of, they should take note of what is available to them by getting in touch with the customer care executive. This will help them to become familiar of the kind of inventory they possess in the form of a credit card.
Banks provide their customers with catalogues that detail the products or merchandise available for rewards redemption. These catalogues can be found online on the bank’s official website or on the bank’s reward website. Banks sometimes dedicate a separate website to the rewards programme. This makes it easier and more convenient for customers to handle their rewards accumulation and redemption. Rewards catalogues will include the various items, vouchers, donations, and miles against which the reward points can be redeemed.
Rewards Programmes Offered by Banks:
ICICI Bank Rewards
- Handpicked Rewards
- PAYBACK Rewards
- ICICI Bank Rewards
- HDFC Bank - My Rewards
- American Express Membership Rewards
- Andhra Bank - ABLE Rewards
- Axis Bank - eDGE Loyalty Rewards
- Bank of Baroda Credit Card Rewards
- Bank of Maharashtra Credit Card Rewards
- Canara Bank - Canara Rewardz
- Central Bank of India - Anmol Rewardz
- Citibank Credit Card Rewards
- Corporation Bank Credit Card Rewards
- HSBC Credit Card Rewards
- IDBI Delight Rewards Program
- IndusInd Bank Credit Card Rewards
- Kotak Mahindra Bank Credit Card Rewards
- LIC Credit Card Handpicked Rewards
- Oriental Bank of Commerce Rewards
- Punjab National Bank - PNB Bonus Programme
- RBL Bank Rewards
Standard Chartered Bank Rewards
- Bonus Points Programme
- 360° Rewards Program
- State Bank of India - Shop-and-Smile Rewards
- Karur Vysya Bank - SBI Shop and Smile Rewards
- Syndicate Bank Credit Card Rewards
- Union Bank of India - Union Rewardz
Rewards Programmes Offered through Partners:
- American Express
- ICICI Bank
- Central Bank of India - Anmol Rewardz
- HDFC Bank Infinia
- HDFC Bank Regalia
- HDFC Bank Diners Club International
- IndusInd World Miles
- Kotak Mahindra Bank - My Kotak rewards
- Canara Bank - Canara Rewardz
- Union Bank of India - Union Rewardz
- City Bank - City Airmile Rewardz designed for American Express Cardholders
- Indian Overseas Bank - IOB Rewardz
Credit Card Reward Points FAQs:
What is a reward point?
A reward point is a perk offered by banks to credit cardholders as a reward for every time they spend on their 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 and more.
How can I earn reward points?
Simply shop with your credit card to earn points. You can earn points for transactions made on your card. Generally, banks will reward you for every Rs. 100 you spend on the card. You can pay your bills with your credit card, shop in stores, shop online, pay for travel and international expenses and earn reward points.
How many points do I need to accumulate to be able to redeem them?
Each bank sets a different minimum requirement to be able to redeem your points. Some banks do not have a minimum limit on the points. But to redeem them, you should have collected enough points to be worth something available in the catalogue. Usually, 500 points will fetch you a basic product or make you eligible to redeem it for cash back.
Do reward points expire?
Yes, unless specified by the bank. Reward points will expire within 2 to 3 years from the date on which they were earned. Check with your bank regarding the policy on reward point’s expiration date. In other cases, if you do not use your credit card for a period of 6 months or more, then the points collected will lapse.
Can I cancel my request to redeem the points?
Most banks do not allow you to cancel a redemption request. Once you have requested that your points be converted to miles or a gift, you will not be able to cancel it.