How to use your credit card reward points smartly?

Being a credit card user, you must know about reward points. Many of you know how to use reward points smartly. However, many credit card users are unaware of using credit card reward points optimally.


Post pandemic 2020, every aspect of our lives has been changed such as, lifestyle, financial habits, spending and shopping patterns. The issuance and use of credit cards has increased post –pandemic.


In financial year 2022, nearly 73 million credit cards were issued in India, the estimate until 2026 predicts that it will touch almost 200 million credit cards issuance. According to the RBI Data, the credit card users spent almost INR 68327.73 Cr on ecommerce platforms as opposed to INR 38773.42 Cr on offline swipes on Point of Sale machines (POS) – a difference of 76%. The festive season helped credit card spending touch a record high of Rs 1.22 lakh crore in September 2022. There has been an increase in lifestyle aspirations, credit demand, purchasing on credit due to increase in the number of credit cards. It allows banks and fintech to introduce new products, services and partnerships. Currently co-branded credit cards are a new launch.

Co-branded credit cards are the product of a mutual partnership between a particular merchant and a credit card issuer.


Apart from accessing credit, there are other reasons for people looking for credit cards: the gifts, benefits, discounts, and other deals that come with them. The general mindset is credit cards lead to a debt accumulation. But lack of financial literacy can result in losing its optimum use of credit card reward points. Depending on credit cards, you can earn reward points while using it for shopping, dining, bill payments, entertainment and travel. Later, you can redeem those points to earn variety of perks and gifts.


The simple meaning of reward point is that you earn a perk offered by the bank to credit card holders as a reward for every single rupee they spend on their credit card. However, the reward points do not fetch you money, but are more like perks offered by the bank.


The numbers of point you earn vary depending on your credit card types and issuing bank. In most cases, the card holder earns one point for every spent of Rs. 100 to Rs. 250 on the credit card. So, the higher the value of purchase, the more points you will earn. Most credit card users are aware about benefits associated with credit cards. But many first time users do not know how to use credit card rewards points optimally. Here are a few tips to earn maximum reward points from your credit card.


  • Some credit cards come with welcome points and accelerated reward points. When you get a new credit card, you have to spend it within 90 days of the credit card’s issuance, it will earn you welcome points. When you spend on certain categories such as, shopping at partner stores, dining experiences, entertainment and so on, you earn accelerated reward points.
  • On special occasions, you can use these reward points to purchase e-vouchers or gift cards. It will help the recipient to buy as per her or his choice.
  • You can use reward points to save lot on airfare and hotel accommodations. You can donate through reward points if your credit card has an option to do so.
  • When you use most of the limited period offers to earn accelerated points, you earn higher reward points. For instance, in festival season, when banks offer more reward points for shopping through credit cards, it would be wise for you to use your credit cards during festival time offer.
  • You can use reward points to instantly top up recharge your mobile for free or at a discounted price.
  • Keep track of your reward points to know when your points expire and ensure you redeem before they expire. Most banks have a dedicated portal for tracking rewards points and purchase through reward points. When you track reward points, you can make the most of it while shopping, booking your air ticket and so on.


Remember, the idea of reward points is to encourage people to use credit cards more, so do not overspend just for earning reward points. When you use your credit card smartly for your day-to-day expenses such as, fuel and groceries, you can increase reward earning opportunities without overspending it.


It is also an important to pick the right credit card because if it gives extra rewards on things you are not interested in, it cannot serve your purpose of earning rewards. So, choose a credit card that would offer rewards on the purchase you make the most.


Read fine print associated with credit card reward programs as credit card providers can change the terms of rewards and cash back as and when they like it. So, stay updated with the latest rules by visiting their website from time-to-time.


Research and compare about offers and schemes before just trusting promotional offers of credit cards.


The bottom line is when you use your credit card smartly, you can earn the highest reward points and make most of it through your reward points.

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