Credit Card reward points – Credit card comes with multiple benefits one such benefit is the reward. A reward means a freebie, gift, discount, or additional benefits that are offered to credit cardholders. It is offered against the usage of a credit card. Rewards are offered in terms of reward programs. These programs are made to trap credit card users for increasing usage of their credit card for bill payment, shopping, dining, travel, etc. The value of reward points is much lesser than the amount spent using a credit card. Many credit card users spend money using a credit card just to increase reward points.
If you are using a credit card, you should understand credit card reward points and the method to redeem them.
Each credit card company has different criteria when it comes to giving credit card reward points. The process of redeeming these points also vary. However, most of the process is general in nature. Let’s take a look at What is Credit Card Reward Points? How to earn and redeem reward points?
What is credit card reward points?
Credit card reward points are points that are given for every credit card spend. The value of reward points and calculation methods are different for every lender. The reward point calculation also differs based on purchases made by you.
For example, SBI Signature credit card customers can earn 2 reward points on every Rs.100 spent on purchase transactions and earn 10 reward points for every Rs.100 spent on departmental store purchases.
Credit card reward point benefits
The reward points offer multiple benefits to the credit card user. The points can be redeemed and following benefits can be earned.
- Gift vouchers & E-vouchers
- Air Miles
- Room Miles
- Cash back
The accumulated reward points need to be redeemed within a specific period. The reward points if not use can be expired. The maximum time limit allowed to redeem points varies from bank to bank. Generally, the bank allows 2-3 years’ time period for redeeming points.
Type of rewards points
Different types of reward points offered by credit card companies are given below.
#1 Welcome rewards – Given for becoming credit card holder
#2 Regular reward – By spending on the card
#3 International points – Given for spending money at overseas
#4 Accelerated points – For spending money on specific category
#5 Loyalty points – Points that are given for renewal of credit card
How to redeem credit card reward points?
There are two different ways to redeem your credit card reward points. Details are given below.
#1 Internet Banking
You need to login into your bank account using an internet banking customer ID and password. On successful login visit the credit card section.
Click on the reward points section. You will be taken to a new page where you will be able to see the reward point summary. Click on ‘Redeem Now’.
Now select the reward of your choice from various categories and confirm the redemption. You will get a redemption voucher or selected reward.
#2 Mobile App
Many banks and credit card companies provide Mobile App facility. You need to download the mobile app of the bank. Login using your internet banking customer ID and password. Click on the Rewards tab from the menu to view your balance points. Click on the “Redeem Now” button. You will be taken to the reward store from where you will be able to select the reward of your choice. Click on the confirm redemption and you will get a reward of your choice.
FAQ about credit card reward point
How many reward points are required for redemption?
Each bank has a different minimum balance requirement for the redemption of points. Some banks do not keep any minimum limit for the redemption of points. Generally, 500 reward points are enough for redemption.
Do reward points have any expiry?
All earned points have expiry date. The time period of expiry is variable. Bank gives time period of 2-3 years for the redemption of point.
What is redemption fee?
The fee that is charged for the redemption of the point is known as redemption fee. It is charged for processing and handling rewards. It is also known as redemption handling fees. GST will be charged on redemption fee.