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Tata Capital > Blog > Personal Use Loan > What Is Credit Card Reward Points?

Personal Use Loan

What Is Credit Card Reward Points?

What Is Credit Card Reward Points?

Credit cards have become an integral part of our daily lives, providing convenience and flexibility in our financial transactions. But did you know that every time you make a purchase using your credit card, you have the opportunity to earn reward points? This provides the answer to the question of what is a credit card reward point. These reward points can be redeemed for a variety of benefits, such as air miles, gift vouchers, or even cashback.

In this article, we will explore the world of credit card reward points and ways to maximise their value. We will discuss different types of credit card rewards programs, how to earn and redeem credit card points and provide actionable insights to help you make the most of this valuable benefit.

Understanding Credit Card Reward Points

Credit card reward points are essentially incentives offered by banks to encourage customers to use their credit cards for their day-to-day expenses. Every time you make a purchase using your credit card, you earn a certain number of reward points based on the amount spent. These points act as a form of currency that can be accumulated over time and redeemed for various rewards such as air miles, gift vouchers, cash back, or discounts.

Different banks have different reward programs with varying terms and conditions. The number of reward points you earn depends on factors like the type of credit card you hold, the amount you spend using your card, and the specific rewards program offered by your bank.

Types of Credit Card Reward Programs

Let us take a look at some common credit card rewards programs:

Welcome Rewards: Many banks provide welcome reward points which are credited to your account upon activation and can be redeemed for various rewards.

Regular Rewards: In this basic rewards program that is available on almost every credit card in India, you earn a set number of reward points for every rupee spent on your credit card.

Accelerated Rewards: Certain credit cards offer accelerated reward points for specific categories like dining, travel, or shopping.

High-Value Purchases: Some credit cards offer credit card bonus points for making high-value purchases.

International Rewards: If you frequently travel abroad, you may benefit from a credit card that offers extra rewards points for international transactions.

Bonus Points: Many credit card issuers provide credit card bonus points when you spend a certain amount within a specified period.

Loyalty Points: To retain customers, some banks offer additional reward points as a loyalty benefit when you renew your credit card every year.

Supplementary Cards: Credit card holders can also earn reward points on supplementary cards issued to their family members. The reward points earned through supplementary cards are credited to the primary cardholder's account.

Earning And Redeeming Credit Card Reward Points

Let us discuss how you can earn and redeem these points:

Earning Reward Points

The most common way to earn reward points is by using your credit card for everyday purchases like groceries, fuel, bills, or online shopping. Apart from regular spending, you can also earn bonus points by utilising the specific features or benefits of your credit card. For example, if your card offers accelerated rewards on dining, you can earn extra points by dining at partner restaurants.

Redeeming Reward Points

Once you have accumulated a substantial number of reward points, you can redeem them for various rewards offered by your bank. The redemption process generally involves the following methods:

Online Redemption: Many banks provide an online portal where you can log in to your account and redeem your reward points instantly. You can choose from a variety of options such as gift vouchers, merchandise, air miles, or cash credits.

Customer Care: Your bank's customer care can guide you through the redemption process and help you choose the most suitable rewards based on your accumulated points.

Physical Forms: Some banks may require you to fill out and submit the physical form along with any necessary documents.

Things to Consider Before Redeeming Reward Points

Here are some of the key factors to consider:

Minimum Reward Points: Ensure you have accumulated enough points to meet the minimum threshold for redeeming reward points before initiating the redemption process.

Expiration Date: Know the expiration date and ensure that you redeem your points before they get invalid.

Redemption Fee: Consider this fee while evaluating the value of the rewards you wish to redeem.

Maximising Your Credit Card Reward Points

Let us explore some tips and strategies to maximise your earnings:

Choose the Right Credit Card: Research different options and select one that aligns with your spending habits and lifestyle. Look for a card that offers accelerated rewards on categories you frequently spend on.

Understand Bonus Categories: Familiarise yourself with the bonus categories offered by your credit card. Ensure you utilise these categories to earn additional points.

Consolidate Spending: Instead of using multiple credit cards for different purposes, consolidate your spending onto one card that offers the best rewards program. This way, you can accumulate points faster and simplify your record-keeping.

Keep Track of Promotions: Stay updated on promotional offers provided by your bank. They often run campaigns where you can earn bonus points or enjoy exclusive discounts at partner merchants.

Pay Attention to Expiry Dates: Regularly check the expiry dates of your accumulated reward points to avoid losing them unused.

Plan Big Purchases Strategically: If you have planned significant expenses like a vacation or home renovation, time them strategically to coincide with bonus point promotions offered by your credit card issuer.

Use Online Shopping Portals: Many credit cards offer online shopping portals where you can earn additional reward points by making purchases through their partnered e-commerce websites.

Manage Your Finances

With careful planning and usage, credit card reward points can be an excellent way to enhance your financial benefits. To explore more options for managing your finances, consider personal loan offerings. Whether it is a small personal loan or a large amount at competitive interest rates, you get flexible solutions to meet your financial needs. It is important to know about competitive personal loan interest rates before applying for one.


Credit card reward points are a valuable perk offered by banks to encourage credit card usage among customers. By understanding how these programs work and implementing effective strategies, you can maximise the value of your reward points. Remember to choose the right credit card, consolidate your spending, keep track of promotions, and plan your redemptions wisely.

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