How to make the most of reward points

Credit cards are a common mode of payment today. Amongst its many advantages, most credit cards offer card owners the opportunity to earn while they spend through reward programmes. These earnings are through reward points.

Since reward points are offered by credit card companies to persuade card owners to use credit cards for most payments, reward points increase proportionate to the amount you spend using the credit cards.

The rewards also vary based on the type of card you hold.

For example, HSBC-Classic cardholders earn 1 reward point for every purchase of Rs 250; HSBC-Gold cardholders earn 1 reward point for every purchase of Rs 100; HSBC-Platinum cardholders get 2 reward points each time they spend Rs 150 using the credit card; and HSBC-Premier cardholders earn 2 reward points for every spending of Rs. 100. So, it is a good idea to consider reward points while choosing the type of credit card.

As a customer, you must be aware of all types of reward programmes offered by your credit card company and which programme will earn you the highest number of rewards.

Here are a few programmes that companies offer:

  • Cash back rewards;
  • Frequent flyer rewards;
  • Frequent shopper rewards;
  • Rewards against mobile phone usage;
  • Fuel point rewards

Your choice of the best credit card reward programme for you will largely depend on your lifestyle or areas in which you spend most. If you are into sales and marketing and travel a lot by air, then the frequent flyer reward programme is good for you. On the other hand if you travel mostly by road, then a reward programme based on fuel usage would suit you well. If your mobile phone usage is high, you can get a reward programme that offers points for payment of mobile bills.

For example, reward points earned on the Vodafone Citibank credit card can be redeemed for free talk time.

It is easy to earn cash back rewards since these are not based on where you spend your money. So, if you do not spend large amounts in a particular area, it is advisable that you choose a card/reward programme that offers cash back. If your credit card offers cash back against any money spent, using your credit card even for routine expenses like utility bills, fees and so on will be beneficial.

Most reward points can be redeemed either for cash or gifts like jewellery, kitchen appliances, electronics etc. You should know the gift articles you are eligible for, based on the number of points you have earned. That way you can choose the option that is most beneficial.

Frequent flyer rewards are generally based on miles travelled. For example, HSBC-Premier cardholders get 1 reward point per 1.5 miles on Jet Airways and 1 reward point per 2 miles on Kingfisher airlines. Therefore, if both the airlines offer convenient flights, it would be better to choose the one with which you get more points for the same journey! Then just use your credit card for making airline ticket purchases.

Rewards come with a cost - credit card companies may charge annual fees for participating in a reward programme. It is important that you consider these fees to check whether the reward points you are likely to earn will more than mere compensate for the annual fees.

It is important that you read and understand the reward offers completely. Say Mr Gupta has earned 10,000 reward points on his credit card. When he goes to redeem the reward points he is taken by surprise - his reward points have expired in the previous month.

Since Mr Gupta had failed to read the fine print, he lost this opportunity.

Always remember that the reward points are incidental benefits. Only spend the money that you would have spent anyway, even if there were no rewards offered. is an online loan marketplace.

Disclaimer: All information in this article has been provided by and NDTV Profit is not responsible for the accuracy and completeness of the same.

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