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Credit Card Rewards are the best part of having a card and also for the fact that it is some extra emergency fund you can have in cash in an emergency. Every Credit Card gives you some kind of reward while making a spend with them over a certain amount. This rewards rate can be different from card to card and also depends upon the bank. Credit Cards are a valuable addition to your finances and rewards are to increase the value back on your every spend.
Different credit cards offer different types of rewards as some might provide reward points which can also be called credit card points, whereas other credit cards can provide you with cashback on your every expense. The amount of rewards and cashback you earn can vary depending on the amount you are spending since these amounts are set by the banks.
What are Credit Card Points?
There are different types of rewards presented by the bank simply referred to as credit card points. These types of rewards are as follows –
1. Points
When you spend some money with the help of your credit card, you get rewards in return. The amount of rewards to be given is always predetermined by the bank. There are exceptions as well where you get to earn accelerated reward points or extra reward points on your expenses. Although these accelerated reward points only get triggered only when you spent on a particular type of product. The best example of an entry-level reward points credit card is the SBI SimplyCLICK Credit Card.
People who are familiar with credit card rewards can surely use their points in a well-productive manner. However, people who are yet not familiar with the accumulation and usage of reward points need to consider their redemption strategy.
2. Miles
Similar to points, when you spend money, you get Miles in place of rewards. These miles also have a pre-determined course of usage by the bank which can be changed as well. The miles accumulated can be further redeemed against the bank’s catalog. Credit cards like AXIS Bank Vistara Infinite Credit Cards are premium offerings and you can get 6 Club Vistara Points on you every Rs. 200 spent, and much more.
3. Cashback
Cashback is yet another type of reward by credit cards where you get a cashback which is the percentage of the transacted amount. The cashback value can be further redeemed against your credit card bill and in some cases, you can also use the cashback to buy something of your choice. To know more about the credit cards where you can earn cashback, you can check the Premium Cashback Cards and select the best for yourself.
Credit Card Points Worth
There might be a lot of confusion among the new credit card users about what am even going to do with these reward points. When we talk about reward points, their accrual rate can be one-third of a rupee or maybe more than that and you get the rewards upon spending at least a hundred rupee. This indicated that the rewards rate was lower than 0.50% of the whole amount. So the confusion is legit but the thing new users do not understand is that when you make big purchases, this minimal reward rate can save them a sufficient sum.
For Example – Cardholder A uses their credit card for their everyday expense, and they spend a total of Rs. 50,000 at the end of the month. If the bank’s reward rate is 4 reward points for every Rs. 200 spent and 1 RP is equal to Rs. 0.50 then they have accumulated 1000 RPs. The worth of their RPs is now equivalent to Rs. 500. This means the cardholder has ultimately saved Rs. 500 at the end of the month even after all these expenses.
People usually forget to understand this but saving is saving be it Rs. 1 or Rs. 1 Lakh. These reward points do the savings for you. The reward redemption rates can be different from bank to bank as well so it is not always the case that you are saving 50 paisa on every 100 rupee spent.
Conclusion
Rewards are the most favorite thing if cardholders use credit cards and have a decent knowledge of reward redemption and its rate. Credit Card Points are a type of value back that you earn based on your expenses at the end of every transaction. The rates can be different and the redemption ways can also be flexible depending on what the cardholder chooses to opt for. Credit card points are one of the other ways of saving something extra while taking care of everyday expenses. These reward points by credit cards can still save you enough to consider their worth on a serious note.
