The Reward Programs offered by credit card issuers have become a significant reason why more and more people want to have a credit card today. It is because they can save a lot on their purchases in the form of reward points when they pay using their credit card. If you are also a credit card user, you must be knowing about credit card reward programs and how they work. Many people apply for high annual fee credit cards just because these cards offer a very good reward rate. But, is it worth it to pay an annual fee for a credit card just to earn reward points on all your spends? Are these reward programs really such exclusive or just overrated? We are here with the answers to these questions. Keep reading the article to know how the credit card reward programs work and should you go with them or not:

Are Credit Card Reward Programs Worth It

How Do Rewards Credit Cards Work?

Rewards Credit Cards are the cards that provide you with reward points on almost all your purchases. Different credit cards come with reward rates, which can be lower and higher depending on the fee of the credit card. Moreover, the value of reward points can also be different for different cards. Now, you need to understand that more reward points don’t always mean more benefits. It depends on the value of reward points. For example, a credit card earns you 5 Reward Points on every Rs. 100 spent where the value of 1 Reward point is Re. 0.5. It means you are getting a value back of 2.5% with this card. Now, a second card earns you 3 Reward Points on every Rs. 100 spent, where the value of 1 Reward Point is Re. 1. Then, this card provides you with a value back of 3%. So, in this case, the card providing 3 Reward Points is more beneficial than the one providing 5 Reward Points. So, you must check the value of Reward Points before choosing a card rather than just joining with a card with more reward points.

Moreover, the reward points you earn are not automatically converted to cash but you need to request the redemption. It can be done through Internet banking or the rewards portal of your card issuer. A card can offer different values of reward points for redemption against different categories. So, be assured to go with a card that provides the highest value in a category of your choice.

Pros & Cons of A Reward Credit Card:


  • The rewards credit cards generally don’t charge a high annual fee and even if they charge, it is due to the other exclusive benefits provided with the card. Some of the rewards credit cards even come with a no annual fee.
  • You can save a lot on all your purchases if you choose your card wisely by understanding the categories where you spend the most and getting a card accordingly.
  • You can redeem your reward points against several categories of your choice, including shopping, flight/hotel bookings, gift vouchers, etc.


  • You need to redeem your reward points and to do that in the right way, you might need to do some calculations before choosing the right category against which the redemption will give you the maximum benefit.
  • The reward redemption fee can be higher than the value of reward points itself sometimes.
  • The reward points don’t last forever but expire after a time period of a few months or years.

Should You Have a Rewards Credit Card?

There is no harm in having a rewards credit card as long as you are wise enough to choose the right offer for you. Rewards Credit cards are generally pocket-friendly and allow you to save on almost all your transactions, which is a great thing. But, you should keep a few things in mind. Firstly, you should choose a card only after analyzing your spending habits so that you can get a card that is best suited for you. If you love to shop, go with a card that provides maximum reward rate on shopping & if you love traveling, follow the same rule for this as well. Moreover, reward redemption is also something that needs to be done carefully in order to get the most out of your card. Also, make sure to calculate that the reward redemption fee is not more than the value of reward points you are redeeming and redeem your points before they expire. If you can follow all these steps wisely, you should definitely go with a rewards credit card. It will only benefit you.

Also Read: Everything About Credit Cards Reward Redemption

Bottom Line

Like the two sides of a coin, everything can have advantages as well as disadvantages and you must decide what can affect you more. In the case of rewards credit cards, the disadvantages can not affect you if you are responsible and wise enough to use your credit card. Thes best thing about Rewards credit cards is that everyone can have them as all the basic and Lifetime free credit cards also provide reward points to their customers. The maximum benefit can be earned only if you choose your card wisely after comparing different cards. Don’t just go with the first option you see, but do thorough research before making any decision. And yes, the credit card reward programs are worth it, provided that you are a responsible user.

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