While going overboard on credit cards has its perils, nowadays almost all of them offer reward points and other benefits – which depend on the kind of card you get. Conversely, you can pick and choose a card that offers benefits best suited for the kind of expenses you are most likely to make.
Here are a few benefits that most cards offer:
Depending on the type of card you hold, you get points for purchases you make. These could vary from 1 point for every spend of Rs 100/200 (Classic, Gold cards) to 1 point for every spend of Rs 40/50 (Platinum and above). On specific Rewards branded cards, it could even go as high as 5-10 points on every spend of Rs 100/200 on certain categories.
Redeeming these points can be done online or via phone, and works out to between Rs 2-4 per point, which means if you have 1,000 points, it is equivalent to Rs 250-500. The conversion ratio differs across card issuers and the type of card you hold. Many credit card issuers have the Rewards Catalogue on their websites, and in some cases, even an entire website set up purely for rewards management.
– Reward points can be used only for pre-decided items, vouchers etc – from a catalogue
– Reward points expire after a certain period in most cases; higher end cards can be an exception
– You may have to pay a separate fee to participate in a Rewards Programme of some cards
Frequent flyer miles, points on dining out or hotel stays, shopping reward points, fuel surcharge waivers, fuel point rewards, mobile phone usage etc. fall under this type of benefit. Some premium cards also offer milestone rewards, when you spend a certain amount, say Rs. 2,00,000 on your card in a year – these could be vouchers for hotel stays, flight tickets and so on. Any of these benefits could be in the form of reward points or as direct discounts/vouchers with certain portals or stores.
– There can be different types of limits attached to these benefits
– The annual fees and/or interest for these cards could be higher
– Per transaction limit – for example, a fuel surcharge waiver on transactions between Rs. 500 and Rs. 2000 only.
– Upper limit per month – there is a limit on the maximum number of points you can earn in the particular category.
– The regular outlet restrictions and dates of validity may apply over and above these restrictions
Some cards offer a direct cash discount on certain types of purchases or even payment of the credit card bill a certain number of days before the due date. This is usually in lieu of reward points, and shown as a credit in your card statement itself. This works out well for many users who don’t want the hassle of accumulating and redeeming reward points.
– The cashback is likely to be only on very limited kind of expenses
– There will be an upper limit to how much cashback discount you can avail
– The actual credit of cashback to you could be anytime from your next statement to a few months later
Many cards offer sundry benefits like lounge access at airports, international concierge service, movie ticket bookings and so on. The specific benefits that your card offers can to be looked up in the credit card kit, visiting the card issuing website or by calling them.
The most common issue here is that you don’t remember to use these benefits at the right time – like when you’re at a restaurant that offers discount on your credit card or when a travel portal has an offer and you’re unaware of it.
A couple of good ways to remember are:
– When you get your card statement, do take some time out to check if there are any special offers coming up
– When you’re about to use your card, make it a habit to ask the shop/restaurant if there is any ongoing offer. Many merchants also require you to mention this upfront (that you wish to avail of an offer), rather than at the time of paying the bill. Likewise, for online purchases – before you hit “Pay”, always double check if the portal offers discounts / cashbacks on the card(s) you hold.
Many such ongoing offers are delivered via SMS by banks and merchant establishments. Did you know you can use Walnut to keep a track of all these offers from one place itself?
Download Walnut and never miss an offer again!