One of the biggest reasons behind the popularity of credit cards, apart from ease of transaction, is most credit cards reward you in one way or the other for every transaction that you make with the card. Generally speaking, almost all credit cards offer one of the four types of reward structures- Reward Points, Cashback, AirMiles and Fuel Points.

Types of Rewards You Earn on Credit Cards

Whether you will earn Reward Points or cashback or AirMiles or Fuel Points, or a combination of two or more of these depends upon what category the card belongs to and what kind of customers it targets. For example, many entry-level shopping credit cards often earn rewards as cashback, while almost all travel credit cards earn AirMiles on all purchases that you make with the card.

As mentioned earlier, almost all credit cards offer one of the four types of reward structures- Reward Points, cashback, AirMiles and Fuel Points. In this article, we will analyze each of these reward structures and see which structure suits what niche of customers. Finally, we will also suggest some of the best credit cards for each of the four types of credit card rewards.

Reward Points

Reward Points is the most common type of reward structure that you get with credit cards. You will find credit cards with a Reward Points structure under all categories.

Reward Points credit cards earn Reward Points whenever you use the card for any transaction. Many Reward Points based cards earn Reward Points at an accelerated rate on certain spends categories. For example, credit cards that target online shoppers often earn accelerated Reward Points on popular shopping websites like Amazon, Flipkart and Myntra, etc. Travel credit cards often earn accelerated reward points on travel-related spends like hotel reservations and flight bookings.

The Reward Points earned on these credit cards with a Reward Points structure are usually redeemable on the card issuer’s reward redemption portal against shopping vouchers or products from the bank’s catalog of products. Sometimes, Reward Points can also be transferred to partner airlines’ AirMiles program or hotel loyalty programs. Reward Points earned on a few credit cards can also be adjusted against the card’s outstanding balance in the next month’s statement, however, the rate of redemption is usually lower in case of adjustment against the card’s outstanding balance.

Best Reward Points Credit Cards

HDFC Infinia Credit Card:  The Infinia Credit Card by HDFC Bank is a super premium credit card by the bank and comes with a membership fee of Rs. 10,000 per annum. It is Reward Points based credit card and earns 5 Reward Points per Rs. 150 spent with the card. The redemption value of 1 Reward Point is Re. 1, thus making the effective reward rate of the card 3.3%.

SBI SimplyCLICK Credit Card: It is one of the most popular shopping credit cards in the Indian credit card market. SBI SimplyCLICK Credit card earns you 1 Reward Point per Rs. 100 (1 Reward Point = Rs. 0.25, reward rate = 0.25%) on offline spends and 10x Reward Points at partner online merchants including Amazon, Flipkart and MakeMyTrip (reward rate = 2.5%) and 5x Reward Points on other online transactions (reward rate = 1.25%). SBI SimplyCLICK Credit Card comes with a membership fee of Rs. 499 per annum.

Standard Chartered Ultimate Credit Card: It is the most premium offering by the Standard Chartered Bank. You earn 5 Reward Points per Rs. 150 spent with the card and an additional cashback of 5% on duty-free purchases at airports. So, the card has both Reward Points as well as cashback rewards structure, although, it is majorly a Reward Points based credit card as you earn Reward Points on all spends categories. The reward points earned can be redeemed for shopping vouchers from popular brands like Croma, Nykaa, Shoppers Stop, etc. and charity spends. 1 Reward Point = Re. 1 (Reward rate = 3.3%)

Axis Bank Magnus Credit Card: It is a premium credit card by Axis Bank and comes with an annual membership fee of Rs. 10,000. The card earns you 12 Axis EDGE Rewards per Rs. 200 and 2x EDGE Rewards on MakeMyTrip, Yatra, Goibibo and other travel websites. As 1 Axis EDGE Reward Point is equivalent to Rs. 0.20, the reward rate of the card Magnus credit card is 1.2% on regular spends and 2.4% on MakeMyTrip, Yatra and Goibibo.

Cashback

With many credit cards, particularly in the entry-level and mid-level segment, instead of earning Reward Points, you earn cashback which is directly adjusted against the card’s due balance in the next month’s billing cycle. The best part about these credit cards with the cashback structure is that there is no hassle of redeeming the reward points, and the cashback is automatically posted to your credit card account and adjusted against your card’s statement balance in the next payment cycle.

Best Cashback Credit Cards

Flipkart Axis Bank Credit Card: It is one of the most popular shopping credit cards in the entry-level segment launched by Axis Bank in collaboration with Flipkart. Currently, under a limited period offer, Flipkart Axis Bank Credit Card is available free of cost (no annual fee chargeable). You earn a cashback of 5% on shopping with your Axis Flipkart Credit Card on Flipkart and Myntra, 4% cashback on partner online merchants including Swiggy, PVR and Uber, and 1.5% cashback on all other online and offline spends.

HDFC Millennia Credit Card: It is another very popular cashback based credit card by HDFC Bank targeting the millennials and new cardholders. The card comes with an annual fee of Rs.1,000. You earn 5% cashback at partner online merchants including Amazon, Flipkart, Myntra, BookMyShow, etc., and a 1% cashback on all other online and offline spends with the Millennia Credit Card.

HDFC MoneyBack Plus Credit Card: HDFC recently launched the MoneyBack Plus Credit Card as an upgraded version of the older MoneyBack Credit Card. It is a cashback credit card offered with an annual fee of Rs. 500. You earn 2 CashPoints per Rs. 150 on regular spends and 5x CashPoints on EMI transactions at select merchants. You also earn 10x CashPoints on shopping from partner online merchants which include popular names like Amazon, Flipkart, BigBasket, Swiggy, etc. The CashPoints earned on the card can be redeemed for purchasing products from the bank’s exclusive catalog of products, for booking hotels/air tickets, for gift vouchers or can be adjusted the card’s statement balance. 1 CashPoint earned on the HDFC MoneyBack Credit Card is valued at Rs. 0.25 for any of the aforementioned redemption types.

AirMiles

Card issuers offer many credit cards that are tailored for the needs of frequent travelers. These credit cards are known as travel credit cards. Travel credit cards either have an AirMiles based reward structure or earn Reward Points/cashback at an accelerated rate on travel-related spends. Most travel credit cards that earn AirMiles are co-branded cards that are offered by the card issuer in collaboration with an airline.

Best Travel Credit Cards

Axis Bank Vistara Infinite Credit Card: The Vistara Infinite Credit Card by Axis Bank is the most premium of the three co-branded offerings by the bank in collaboration with Air Vistara. Axis Bank Vistara Infinite Credit Card earns Club Vistara (CV) Points as rewards on all categories of spends. You earn 6 CV Points per Rs. 200 spent with the card. The CV Points earned are redeemable for class upgrades, award flight, seat reservation on Air Vistara.

6E Rewards XL – IndiGo HDFC Bank Credit Card: It is a co-branded travel credit card offered by the HDFC Bank in collaboration with Go Indigo. You earn Reward Points as Indigo 6E Rewards on the 6E Rewards XL Credit Card. You earn 5% 6E Rewards on Indigo purchases, 3% 6E Rewards on grocery dining and entertainment spends and 2% 6E Rewards on all other categories of spends with the 6E Rewards XL – Indigo HDFC Bank Credit Card.

Air Indi SBI Signature Credit Card: As the name suggests, it is a co-branded credit card by SBI Card in collaboration with Air India. The card comes with complimentary membership of Air India’s frequent flyer program- Flying Returns and earns SBI Reward Points which are automatically converted into Air India AirMils within 7 days of accrual. 1 Reward Point earned on the card is equivalent to 1 Air India AirMile. You earn 4 Reward Points per Rs. 100 spent with the card on normal spends, and up to 30 Reward Points per Rs. 100 on Air India ticket bookings.

Fuel Points

Many credit cards are targeted at those customers for whom fuel spends account for a substantial portion of their card’s statement balance. These cards are known as fuel credit cards. While some of the fuel credit cards come with the regular Reward Points/cashback structure, with accelerated reward rate on fuel spends (like HPCL ICICI Super Saver Credit Card and BPCL SBI Card Octane), some other fuel credit cards earn rewards as Fuel Points which are redeemable against fuel purchases.

Best Fuel Credit Cards

Indian Oil Citi Credit Card: It is a co-branded fuel credit card launched by Citibank in collaboration with Indian Oil. It is a mid-level credit card and comes with a membership fee of Rs. 1,000 per annum. You earn 1 Turbo Point (Citibank’s Fuel Point) per Rs. 100 spent with the card on regular spends, 2X Turbo Points on supermarkets and grocery spends and 4X Turbo Points at authorized Indian Oil outlets. The Turbo Points earned are redeemable for fuel purchases (at Indian Oil filling stations), travel spends, online shopping, and even cashback adjustment against the card’s statement balance. Although there are many options to redeem the Turbo Points, you get the highest reward rate only on redemption of Turbo Points for fuel purchases at Indian Oil filling stations (1 Turbo Point = Re. 1).

Indian Oil HDFC Bank Credit Card:  It is another Indian Oil co-branded credit card by HDFC Bank. It is an entry-level credit card and comes with a nominal membership fee of just Rs. 500 per annum. The card comes with a Fuel Points based reward structure. You earn 1 Fuel Point per Rs. 150 spent with the card on regular spends and 5 Reward Points per Rs. 100 spent on fuel purchases, groceries and utility bill payments. Although the Fuel Points earned can also be redeemed for purchasing products from the bank’s product catalog or for cashback (adjustment against the card’s statement balance), just like the Indian Oil Citi Credit Card, you get the highest reward rate (1 Fuel Point = Rs. 0.96) only on redemption of Fuel Points for fuel purchases at Indian Oil filling stations.

Bottom Line

Card issuers offer credit cards with different types of credit card rewards- Reward Points, cashback, AirMiles and Fuel Points depending upon the niche of customers a given card targets. It is advisable to pick a card based on the proportion of spends under the various spends categories on your credit card’s statement.

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