Credit Card Rewards: What They Are and How You Can Earn and Redeem Them

The credit card market in India is expected to double, with 200 million cards in circulation by 2028-29. The various benefits that credit cards offer could be the key factor powering this growth. These may include convenient payment options, credit score improvements with responsible use, interest-free periods, fraud protection, and special offers on shopping and travel. Among these, a crucial benefit that attracts many users is credit card rewards.

Here is everything you need to know about credit card rewards, from how they work to how you can earn, redeem, and make the most of them.

What are credit card rewards, and how do they work?

Credit card rewards are incentives offered by banks to encourage spending and foster customer loyalty. Every time you make purchases with your rewards credit card, you get to earn points. These points gradually accumulate and can be used to claim various rewards.

For example, the IndusInd Bank Platinum RuPay Credit Card is a UPI-enabled credit card that offers attractive and never-expiring reward points. You earn 2 reward points for every ₹100 spent on UPI transactions, while non-UPI transactions give you 1 reward point for every ₹100 spent. You can redeem these accumulated points for various options, such as:

• Airline miles on InterMiles

• Gift vouchers on IndusMoments

• Cash credit

• Airline miles on Vistara

• Pay with rewards

You can apply for this RuPay credit card online easily as the entire process is 100% digital. Moreover, there are no joining or annual fees, which means you can enjoy all the benefits without extra charges.

How to earn credit card rewards?

Credit card rewards can be earned through several methods, such as:

Maximising category bonuses: Many credit cards offer accelerated rewards for specific categories, such as dining, shopping, and entertainment. Using these category bonuses strategically allows you to boost your rewards quickly and make the most of your credit card’s value.

Sign-up bonuses: Many credit cards offer sign-up bonuses to new customers. For example, with the IndusInd Bank EazyDiner Credit Card, you get 2,000 bonus EazyPoints as a welcome gift. Moreover, you can enjoy 25% to 50% off at over 2,000 premium restaurants, along with benefits like 3x EazyPoints, which can be redeemed for free luxury hotel stays and meals.

Plan your big-ticket purchases wisely: Whether it is travel, electronics, or home appliances, making large purchases with your credit card helps you accumulate points quickly. Since you are going to spend the money anyway, it is a smart way to maximise your rewards.

Refer a friend: Many credit cards offer a referral program that rewards you for introducing friends or family to apply for the same card. When someone you refer gets approved for the card, you earn bonus points, cashback, or other perks as a reward. Each card may have specific terms, such as limits on how many referrals you can make or how much you can earn, so it’s wise to review the details of the program.

How to redeem credit card rewards?

Listed below are some common ways to redeem credit card rewards:

1. Online redemption

Internet banking

• Log in to your bank's online portal.

• Find and open the rewards section.

• Browse through available options such as travel bookings or gift vouchers.

• Follow the on-screen instructions to complete the redemption.

Mobile app

• Download and open your bank's official mobile app

• Navigate to the rewards or loyalty section to view your points balance

• Select the reward you want to redeem and follow the app's steps to complete the process

2. Offline redemption

Customer service

• Reach out to your credit card issuer’s support team via their helpline.

• Request assistance with redeeming points and provide the required information to finalise your request.

Redemption forms

In some cases, banks may request you to submit a physical form to complete the redemption. You can submit it either by mail or at a local branch.

Important factors to keep in mind

Here are 4 crucial points to keep in mind when redeeming credit card rewards:

1. Annual fees vs. rewards: It is common for premium credit cards to come with high annual fees. To ensure you are getting value, calculate whether the rewards and benefits you earn (like travel perks or cashback) outweigh the annual fee. If not, it could be wise to switch to a no-fee or low-fee card.

2. Minimum redemption threshold: Most credit cards have a minimum redemption limit, which means you need to gather a certain number of points before you can start redeeming them. Track your points and know when you are eligible to redeem rewards.

3. Redemption charges: Some credit card issuers may apply fees when you redeem rewards, particularly for options like travel bookings or converting points into cash. So, always factor these additional costs into your decision and review the terms carefully before redeeming to avoid any unexpected charges.

4. Understand the value of your reward points: Know the value of your points and how they compare across different redemption options. For example, you might get better value by transferring your points to a flyer program rather than redeeming them for merchandise.

Credit card rewards are beneficial as they help you make the most of your spending. You can accumulate rewards through various methods, such as daily spending, sign-up bonuses, and referring others. You have the flexibility to redeem your rewards either online or offline, with options like travel bookings, gift vouchers, or applying them as statement credits.

Just choose the best rewards credit card that aligns with your spending habits, offers valuable redemption options, and has no expiration on points. These benefits can make your transactions more rewarding and beneficial.