—
Reward points are the most common benefit offered by a credit card. Most credit cards are based on the reward points model, which means cardholders can earn reward points every time they make purchases using the card and later redeem the accumulated points for products, air miles, vouchers, etc. The rate of earning these rewards, accelerated earning categories and the modes of their redemption differ from card to card.
For instance, if you check the rewards program of Axis Bank Credit Cards, you will see that some cards like Axis Neo and Axis Aura earn Axis Edge Reward Points whereas other co-branded cards like Axis Vistara provide Club Vistara Points, which can be redeemed to avail free flight tickets or upgrades with Vistara. It is important to note that some cards may provide cashback in place of reward points.
Since rewards can be complicated, especially for first-time cardholders, here we have listed some of the ways to make the most of this benefit.
Pick the Right Card
You should choose the credit card whose reward structure best suits your needs and spending habits. For instance, if you travel a lot and go on multiple trips throughout the year, then the card with travel benefits and air miles as rewards would be the best one for you. The card that you choose should provide rewards that align with your lifestyle so that you can utilize its features and offers to maximize your rewards in return.
Don’t Spend Money Just to Earn Rewards
While reward points are a great feature, cardholders sometimes overspend just to earn higher rewards. When you spend more, it is obvious that your credit card dues will increase. If you are unable to pay the dues on time, it will lead to late payment penalties and interest. Also, when you have unpaid dues on your card, new transactions become ineligible for the interest-free period which means every transaction will add to your interest charges. The amount that you pay in penalties will definitely be higher than the value of rewards you get in exchange. This is why you must spend within your budget and not go overboard just to earn rewards.
Suggested Read: 3 Steps to use Credit Cards Successfully
Look for Welcome Benefits and Milestone Benefits
When you get a new credit card, many card issuers generally provide welcome offers in the form of bonus reward points. This gives a good start to your accumulating reward points. These sign-up bonuses can sometimes be availed only after spending a certain amount within the first few months of card issuance.
Similarly, credit cards also offer bonus rewards for reaching certain spending milestones. These are especially helpful for high spenders as they can easily reach the spending threshold. So, to maximize your rewards, you should also take into consideration these sign-up and milestone benefits and the spending category or brand which they are associated with while comparing and choosing any credit card.
Explore Reward Redemption Options
Ways to earn maximum reward points is not the only factor you should focus on. It is also equally important to explore how you can utilize them. Credit card providers offer different ways in which you can redeem your earned reward points. You can use your points to buy products or vouchers from the bank’s rewards catalog, or any other redemption option available based on your card type and issuer. Some credit cards also let users convert their reward points into air miles.
Generally, the earned reward points also come with a pre-stated expiry date. So, you should also keep track of their validity and make sure to use them before they expire.
Maximize the reward potential of add-on cards
The reward points earned on add-on credit cards are also added to the primary card. Hence, if you have one or more supplementary/add-on cards, you must also make the most of them. Usually, add-on cards have the same features as primary card, which means they will also earn higher rewards on the same categories as the primary card. Understand how you can maximize the reward potential of these cards.
It is essential to understand that the card provider’s motive behind offering spending based rewards to credit cardholders is to urge them to spend more. So, you must use your card strategically to be able to avail any benefit or reward in return. Credit cards can be rewarding only if you spend mindfully and are well-informed about the reward points earning and redemption options. If you implement the above-discussed strategies and use your card responsibly, then you can surely optimize your rewards and maximize your returns.
—
This content is brought to you by Md Badshah Ansari
Photo provided by the author.