Using credit cards for large purchases and EMI repayments is not the only use for them. Credit cards also have important components like rewards and cash back. Credit card rewards programmes are more popular than ever these days. Reward points are nothing more than returns on your credit card purchases. You will accrue more reward points the more you spend. However, the majority of us find them difficult to comprehend.
To make the most of your credit card rewards programme, it’s important to understand the terms and conditions, such as expiration dates and restrictions on how points can be redeemed. It’s also a good idea to compare different rewards programmes to find one that best suits your spending habits and lifestyle.
How Do Credit Card Reward Points Work?
For every Rs. 100 you spend on your credit card, the majority of card issuers give you a certain number of reward points that can be exchanged for gifts or merchandise. Some credit cards offer extra rewards for specific usages, such as dining, travel, online shopping, etc. The trick here is that because rewards are not determined in terms of money, they are typically complicated. They won’t be very useful unless a significant number of points are gathered. One of the most practical ways to use your earned reward points is to redeem them online. Additionally, you can exchange your reward points for Air Miles, which can then be used to purchase tickets.
Reward points have an expiration date, so it is important to use them before they expire. Some rewards programmes may have restrictions on how many points can be redeemed at once or on certain items. Some card issuers provide cashback credit cards that offer direct cashback or convert reward points into statement credit.
Strategies to Optimize Your Credit Card Rewards
Here are the strategies that you need to follow in order to optimise credit card rewards:
1. Do not spend money solely to obtain rewards
Believe us! The issuers want it this way. The entire purpose of reward points is to motivate consumers to use their credit cards more frequently. Don’t blow your entire budget just to earn reward points. It is important to note that the following information is based on the most recent available information.
Credit cards should be used for regular expenses, such as gas and groceries, as well as online shopping. It is important to use credit cards responsibly and pay off the balance in full each month to avoid accumulating debt. Additionally, it is important to keep track of spending and stay within your budget to ensure that you’re not overspending and hurting your savings goals.
2. Pick a credit card that offers rewards that match your lifestyle
Choose a credit card that aligns with your personality and rewards you for frequent purchases. Some cards offer extra rewards on dining and entertainment purchases, while others give you bonus rewards when you purchase airline tickets. It is important to assess your spending habits and read the fine print before applying.
You must therefore consider the types of rewards you would like. It makes the most sense to use a card that offers additional rewards for travel if you enjoy taking frequent vacations. Therefore, you must make a decision about this when applying for a credit card.
3. Redeem reward points regularly
People often make the mistake of saving reward points for a long time and then using the entire collection at once. This is a common mistake when using airline miles and hotel points, as the number of points needed to redeem for valuables increases annually. It is recommended to use the reward points as soon as possible or within a year of earning them and to read the terms and conditions carefully to avoid losing any points due to expiration or other restrictions.
Make it a habit to regularly check the reward points you’ve earned with the card and try to use them to offset this. Pay attention to the points’ expiration dates as well, because nothing is worse than having your hard-earned points expire.
4. Use an online portal that offers cashback
The likelihood of gaining more points increases every time you make an online purchase, especially when it comes to cashback, miles, and other rewards. Most credit card banks have their own shopping portals from which purchases can be made, or you can shop at online merchants that offer cashback. By using an online portal that offers cashback, you can save money on your purchases and earn rewards at the same time, making your money go further and getting more value out of your shopping.
Even though credit card reward points will vary depending on the shopping website, doing some research on them in advance could be very beneficial.
5. Focus more on food and groceries
Even though it can be very alluring to sign up for credit cards that offer additional reward points for certain purchases, the majority make the error of getting too many cards. One common misconception is that a person has more chances to accumulate points if they have more credit cards. Yes, from a certain angle, but maintaining every card comes with risks and can be difficult.
6. Read the fine print
The rewards programmes on your credit cards could change, so pay attention to them. The terms of your credit card’s rewards and cashback are subject to change at any time. Therefore, it is in your best interest to regularly check their website to stay informed of the most recent rules. The reward categories and the shops where the rewards can be redeemed should also be known to you.
Additionally, some credit card companies may offer limited-time promotions or bonuses for certain purchases or activities, so keeping an eye out for those can help you maximise your rewards. It’s important to understand the terms and conditions of your rewards programme to make the most of it and avoid any surprises.
Keep a close watch on the validity of your rewards points to maximise your benefits. Some credit card users collect a host of reward points and redeem them all at once, but most of them are not for life. They are usually valid for 2–3 years, which varies from issuer to issuer.
7. Research about the offers and schemes
Don’t just follow the advertisements in your inbox. It’s possible that other customers can purchase the same benefit from the market. Do your research before moving forward. If you have multiple credit cards, you should be aware of how to take advantage of each card’s rewards programme. Additionally, the card issuers offer discounts to customers who use their credit cards, particularly around holidays. These can be useful for your holiday shopping, even though they are also meant to persuade you to spend.
In addition, the majority of credit card companies frequently run short-term promotions that offer accelerated rewards rates. You might even get personalised offers that give you the chance to earn more rewards for a limited time. Since these promotions frequently last for a brief period of time but have the potential to maximise your rewards, it is advisable to keep an eye out for them and take advantage of the advantages.
8. Maximize benefits during the interest-free period
Typically, credit card companies will offer an interest-free period on transactions between 15 and 50 days. This period typically begins on the day of the transaction and ends on the day the money is due back. If you pay off the entire balance of the bill before the deadline, there is no interest charged on the transaction during this time period.
9. Choose a credit card that suits your lifestyle
The first and most important step is to decide which credit card will be used for your regular purchases. There are many options, so pick one that not only fits your lifestyle requirements but also offers 1.5% (at a minimum) back on every purchase. Nowadays, most credit card companies tend to offer higher sign-up bonuses due to the increased level of competition. Therefore, it’s crucial to quickly research all the benefits that a card provides.
10. Focus on flexibility
Applying for a co-branded credit card makes sense if you are devoted to a particular airline, hotel chain, or retail outlet because it offers more benefits with the combined brand. But these cards also have a tendency to lock you into their own reward programmes, which can prevent you from using your accumulated reward points with brands that are not partners. Conversely, general credit cards with respectable reward points are much more adaptable. You can usually convert or redeem your earned reward points across a variety of brands. Therefore, flexibility should be emphasised in addition to the advantages.
11. Take advantage of the welcome bonus
Many card issuers offer sign-up bonuses to attract new customers into joining. For those who spend more than a certain amount within the first three months of activating their card, they typically offer significant point or mile bonuses. For instance, the YES! First Preferred Credit Card offers 10,000 bonus reward points for the first transaction you complete within 90 days of card issuance. You shouldn’t spend this much money, though, just to get rewards. Before continuing, take affordability into account.
Bottom line
Rewards credit cards offer cash back and other benefits for making purchases. To maximise rewards, it is important to use your credit card instead of a debit card and choose rewards cards based on where you spend the most. You can earn miles from co-branded cards for travel benefits or cash back or points with bonuses for specific categories. Finally, only use your card when you can pay your balance in full.
