Do you also get tempted by credit card rewards, but don’t know how to get the maximum benefit out of these reward points? If yes, this article is surely going to help you out in saving more and more with credit card rewards. People these days want credit cards not just for a credit limit, but also to get all the rewards & benefits that these cards offer. Card issuers try to attract more & more customers by offering all these deals and privileges and customers also get to avail of exciting benefits across different categories. Apart from the discount offers and deals on certain categories, you can save on almost every purchase that you make using a credit card as there is some type of reward program associated with every credit card. People who are wise enough to use a credit card, save a lot of money by earning and using these reward points. If you also aim to do the same, continue reading the article:
What Are Credit Card Rewards?
Almost every credit card comes with a reward program under which you earn certain reward points every time you spend using that card. However, the reward rates can be different with different cards and these may also vary for different categories. For example, a credit card that offers 4 Rewards Points per Rs. 100 spent on groceries, may offer 10 Reward Points per Rs. 100 spent on travel. Moreover, this can be up to 30 Reward Points per Rs. 100 spent using some other credit card. The reward rate doesn’t only depend on the number of Reward Points being offered, but also on the monetary value of these points. A card that offers 10 Reward Points with 1 RP = Re. 0.25 would be better than a card that offers 12 points with 1 RP = Re. 0.10.
Individuals often do the mistake of only checking the number of reward points and not their monetary value while comparing different credit cards. But doing this calculation is a bit essential if you want to get the maximum benefit out of a credit card.
Tips To Save Money Using Credit Card Rewards
You might already be having a credit card or maybe you are looking for one that suits your requirements. Whatever the case is if you want to save more & more using credit card rewards, the following tips are going to help you throughout your credit journey:
- Choosing The Card: Many people don’t understand the importance of choosing a credit card according to their spending behavior. However, this is very important if you really aim to save using reward points. Different credit cards are best suited for different segments of people and you are supposed to choose one that fulfills your requirements. It wouldn’t be a good idea to choose a card that offers a great reward rate on travel if you don’t travel that often. So, take some time to choose the best credit card for you and apply for it. Also, keep the eligibility criteria in mind while applying for a card.
- Using The Credit Card: If you have already got a credit card that is best suited for your needs, make sure to use it for most of your retail spends in order to earn more and more points. You don’t save anything when you purchase something using cash, but credit cards offer you reward points, which can also be converted to cash back sometimes. There is a popular credit card-related myth that using credit cards for everyday spending is not a good idea. But, if you can use It responsibly and make all bill payments on time, why not? Use it whenever you can earn points. Just make sure that you don’t overspend as it can lead to a debt trap later.
- Redeeming The Reward Points: Many credit card users have a habit of just keep collecting their reward points and they don’t even think of when and where they are going to redeem these points. You must check your credit card reward points-related terms and conditions on the first day of receiving your credit card. It is because your reward points may have an expiry date and it doesn’t make sense to let these points expire when you could have saved some money using them. Other than this, you should check whether the rewards have the same monetary value against every option or not. For example, the HDFC Regalia Credit Card offers reward points that have different monetary values against different options. So, in order to get the maximum benefit, you should redeem your points against the most beneficial option.
You can also save money using credit card rewards if you follow all the above-mentioned tips wisely. Most of the people other overspend or don’t spend at all using their credit cards, but you need to find a way in between if you want to save using your credit card without affecting your financial health. Spending on unnecessary things just to earn reward points is not a good idea, but not using a credit card for some necessary purchase where you can earn a lot of points is a bad idea as well. Just make sure that you pay your credit card bills on time so that interest charges don’t take over your reward benefits. If you have any additional questions in your mind, make sure to drop them down in the comment section!