Rewards Credit Card

About Rewards Credit Card in India

Imagine being rewarded for buying our daily groceries, fuel and other supermarket purchases as well as on other leisure or entertainment expenses! That is what a Rewards Card does for you. Every time you spend money on your credit card, you earn a certain number of points. Obvioiusly, the more you spend, the more points you earn. You can then redeem or exchange these free points for a variety of options including more shopping, air miles, or exclusive gifts from your bank’s catalogue.

What’s even better is that you have a wide variety of rewards programs to choose from - you can basically select how you would like to be rewarded! So when you go shopping for a new pair of formal office shoes, you are earning points that will help you get a free air ticket or a free vacuum cleaner!

There are a multitude of Rewards Credit Cards available in the market today and it can be very confusing to decide which one is the best for you. Before applying for a Rewards Credit Card, it is very important to compare and contrast the features, benefits and fees of the card you wish to apply for. Here are some tips to help you identify the card best suited for your needs.

Rewards Credit Card Features

Rewards Points

The very name says it all. Similar to any other credit card, Rewards Credit Cards offer reward points. The reward points program differs from bank to bank. The number of reward points you accrue is based on the amount that you spend using your Rewards credit card. Different credit card issuers calculate these reward points differently and you can redeem these points later as per the lender’s norms.

Reward Points for everyday shopping:

Take, for example, the HDFC Diners Club Rewardz Credit Card. Shopping with your HDFC Diners Club Rewardz Credit Card enables you to get 3 Reward Points for every Rs.150 on retail spends. You get 2 X more Reward Points on grocery, supermarket purchases, dining and airline ticketing at partner merchants. You also get 2 X Reward Points on incremental retail spends for more than Rs. 10,000 per statement cycle.

Redemption: You can redeem theses Reward Points against air miles at leading airlines, or exchange them for premium gifts from an exclusive rewards catalogue.

Likewise, using your Citibank Rewards Credit Card earns you 1 Point for every Rs125 spent on all transactions. You earn an accelerated 10 X Reward Points at select partners, apparel and department stores.

Redemption: You can redeem these points later for fuel, online shopping, air miles, cashback and a host of other products and services.

With the ICICI Bank Platinum Chip Credit Card, the Reward Point program is powered by PAYBACK. You earn 2 PAYBACK points for every Rs. 100 spent on all retail expenses, with the exception of fuel.

Welcome points and bonus points

Almost all kinds of credit cards give welcome reward points when you sign up. Some travel cards will offer you free air miles when you join. In addition, you also earn bonus reward points on spends over a certain limit.

Besides the rewards points feature, Rewards Credit Cards offer several other advantages like concierge services, discounts on dining, entertainment and movies, or points that can be redeemed for fuel, golfing perks, etc.

Rewards Credit Card Benefits

The list of Rewards Card offers spans almost every category of everyday spending including shopping discounts, entertainment discounts, free movie tickets, cashback, airline tickets, hotel stays, specialized insurance cover etc. Theses credit cards also give you welcome benefits and bonus points on spends crossing a certain pre-fixed limit. In order to avail and activate certain benefits, you need to swipe the card within first 30 days of credit card activation and spend a pre-fixed amount on your credit card.

For example, HDFC AllMiles Credit card gives you a welcome benefit of 1000 Reward Points. Renewal of the credit card would fetch you another 1000 Reward Points, provided that you pay the annual fee.

How to Choose the Best Rewards Credit Card

While choosing the best Rewards Credit Card might not be super easy given the large number of options, it is good to consider the following points before deciding on the most suitable offer:

When you look for a Rewards Credit Card, you must consider the following.

• Your Spending pattern: Examine your habits and decide what you would like to use your credit card for. If you are an online shopaholic, then choose one which has a rewards program specifically intended for that particular purpose. For example, the HDFC Snapdeal Credit Card enables you to earn 3X more Reward points for spending online at the Snapdeal website. Similarly, if your lifestyle requires you to travel frequently, then it would do to get a credit card like the IndianOil Citi Platinum Credit card, which enables you to actually save on fuel expenses and redeem the points accrued for actual fuel.
• Fees and other charges: Before applying for A Rewards Credit Card, carefully research on the annual fee, joining fee, renewal fee and other possible charges. Sometimes, a credit card may offer very attractive benefits but the fees and other charges that apply may be very high. This may potentially strip you off the rewards that you earn on your spending.
• Interest Rate: A vital aspect. Go for the one which has the lowest Interest rate. Don’t be fooled by 0% APR, as those are usually promotional offers. After the promotional period is over, you might most probably find yourself paying a huge amount as interest charges. Also, make sure you pay off your debts in a timely manner to avoid high interest fee.
• Your income: Its absolutely vital to consider your monthly net income and then decide whether you can really afford to have a credit card. Remember, a credit card could considerably increase your monthly expenses and in the process might possibly put you in debt. So, choose wisely.
• Your credit card re-payment plan: Easily the most important criteria in choosing your credit card is your payment behaviour. Many wise people have been known to fall prey to credit card debt. You must make sure that you pay off your credit card dues consistently every month, to avoid accumulating interest.

To put it in a nutshell, go for a credit card that offers good benefits in terms of reward points but which also offers the best interest rate. Racking up rewards points feels great—but it’s completely pointless if you’re paying fees that outweigh the benefits. Do your research diligently and make a repayment plan even if it seems tiresome—it will pay off in the long run.

What are the eligibility criteria?

There are several eligibly criteria for obtaining a Rewards Credit Card, the most basic of which is the income and age. The minimum income and age criteria differs from lender to lender and the kind of card you are applying for. Your credit history and score will also be taken into account. It is advisable to check with the lender directly in order to know the eligibility requirements.

Rewards Credit Card Review

There are many advantages and benefits of owning a Rewards Credit Card. It has the advantage of convenient payment options, gives you access to a world of discounts and rewards, and helps you build a positive credit history (provided you pay your dues consistently, every month) which will enable you to be eligible for loans later in life.

How do I apply for a Rewards Credit Card?

To apply for a Rewards Credit Card, you can either walk into the nearest branch of your chosen lender and submit the application and the required documentation, or you can apply online. Typically, it takes up to 21 days for your credit card application to be processed.

Alternatively, if you think you need help with your credit card application and advice on eligibility, CreditMantri can guide you through the entire process and match you with the credit card that suits your needs the best.

Note: The cards mentioned in the article are merely indicative of the kinds of rewards and benefits on offer. You will need to choose your card based on your specific requirements.