Credit cards, while potentially risky in the hands of an undisciplined spender who may accrue debt, remain a top choice for earning reward points that can be used for lucrative deals and purchases. However, one needs to be strategic in leveraging such benefits. Informed decision-making when it comes to selecting credit cards and then utilizing, and redeeming credit card rewards will help a lot to strike good deals.
Bani Saluja VP of Marketing, American Express Banking Corp., India said, "It is important for consumers to look for credit cards that don't just offer points but present them with a range of redemption options that match their unique preferences, gives them the flexibility and freedom to redeem their points."
Different credit cards come with different joining fees or renewing fees, so, while premium cards have a high joining fee, they may offer better joining rewards. Analyze and compare the joining fees of different cards against the rewards provided. Consider the number of points you get for every Rs 100 spent and compare between multiple cards. Also, compare the milestone benefits and compare exclusionary spending on which you receive no rewards.
Sujai Raina, VP and Head of Business Development, Visa India and South Asia said, “To optimize rewards across both everyday and discretionary purchases, choose cards that align with your spending patterns and preferred reward types - loyalty points, cashback, airmiles, etc.”
“Examine terms and conditions like minimum spend thresholds or expiry; check how easy it is to redeem points, even through digital channels or call centers. You could evaluate the many co-branded cards that offer significant value in specific sectors like travel, retail, e-commerce, and dining,” Raina added.
Saluja added, “To maximize the rewards, consumers should consolidate their spending on one card, keep track of spending milestones to earn bonus points or vouchers on the card, and look out for limited-time offers.”
Keep constant track of 'reward multiplier' deals offered by credit card companies for online shopping, during birthdays or birth months, and festive seasons. These can boost your rewards up to 10 times to 20 times. Such deals may come also with specific purchases or with partner brands or categories.
Instead of impulsively using your reward points, adopting a thoughtful redemption strategy is more advantageous. Save your points for sizable, higher-value rewards to maximize their benefits. Consider whether immediate, smaller items are truly necessary or if accruing points for a more substantial redemption holds the greater advantage.
Shift regular payments such as utilities, subscriptions on OTT platforms, school fees, insurance premiums and rental payments to your credit card to accumulate more points. But note that this is a very risky strategy if you don't repay within interest interest-free period ranging from 45 days to 55 days, you will have to pay interest. So, if you are financially well-off and sure you will be able to repay use this strategy to amass reward points. But never exceed spending more than 30 per cent of your total credit limit or your credit score will go for a toss