Credit cards are a great way to optimize your way to carry out purchases and pay of EMIs, but we all know how banks are now offering reward points and other benefits for using your credit card more or less regularly. In fact, rewards and cashbacks are as much as part of owning a credit card as using the credit card itself is. However, a lot of people still find this system of rewards or reward points too complicated and unwieldy to comprehend or understand, and thus taking any sort of benefit from them whatsoever. And weirdly enough, the number of reward and loyalty schemes have drastically gone up in the past couple of years.

If you are wondering what are involved in these rewards and reward points, then we are certainly here to help you out. But before we proceed any further, it would be pertinent to discuss about the basic idea and structures behind such schemes.

Generally, banks offer a certain amount of reward points on every 100 rupees that you spend on your credit card, and these points can be redeemed for merchandise or gift cards. Certain credit cards offer extra rewards on specific uses, such as dining or shopping or travelling. The entire crux lies here, that characteristically rewards tend to be complex since their bestowal doesn’t depend directly on the amount of cash spent. And besides, the points would be of no major use unless a certain minimum amount of them haven’t been accumulated. Some banks can also offer cashback credit cards, where there is a provision for providing direct cashback into your bank statement or the earned points can be made into statement credit.

While it is certainly easy to earn reward points, it’s easier still to lose these points Your points would be lost, if:

  • The points have expired
  • You have not spent the minimum amount, hence the reward is invalid
  • The store you might have vested is not a part of your credit card benefit providers
  • The terms and conditions pertaining to your reward have been changed by the bank

Considering the difficult terrain on which these schemes operate on, it is now relevant that we talk about how do you negotiate with these obstacles and yet make the best use out of your credit card and the rewards that they offer:

  1. Don’t Spend Money just for Earning Rewards: It’s very important that you manage your credit wisely and responsibly. While your bank would want you to use your credit card more and more (as a means of improving your credit score), don’t get influenced by the prompts and e-mails your bank sends you.
  2. Pick the Card that Matches Your Lifestyle: Choose a credit card that is in sync to your own lifestyle choices. For example, if you have a card that rewards you every time you travel, but the last time you went on a trip was three years ago, then what is the use? Therefore, chose the card that would reward you for the activities you partake in on a daily basis.
  3. Read the Fine Print: Pay careful attention to the particulars of your credit card’s reward program, as they are subject to change on the basis of the bank’s consideration. The onus therefore falls on yourself to remain updated on the conditions of your reward program and to be aware about the various categories of rewards and the stores on which such benefits could be invoked.
  4. Research on the Schemes: A lot of life’s complications can be avoided only if you are prepared to face it, and this is no exception the case of credit cards offering reward points. Know about each and every scheme and compare to determine the best if the lot. Even if you own a number of credit cards, you can still use them to gain rewards from various schemes.
  5. Know Your Limits: Although this piece of advice might look like it was ripped off of a kung fu movie starring Bruce Lee, trust us when we say that tip is worth practicing. Understand the importance of staying within a pre-set budget, since the promotional emails by banks can certainly be tempting, to say the list. Use your cards and their balance in a judicious and responsible manner.
  6. Keep an Eye on the Monthly Statement: Keep an eye on your monthly credit card statement, in order to keep a track of all your expenses. In this way, not only would you know how much you have spent, but you’d also be aware of how many rewards are you liable to get, if the reward system tends to work on the money you have spent.
  7. Pay Your EMI Regularly: The main purpose of credit cards should not be forgotten in the whirlwind of rewards and reward points. It would be a certain pointless action on your part to concern yourself with rewards while you are unable to pay off your credit card bills. Hence, many banks trend to cancel your rewards if you make a late payment of your EMI. Hence, pay on time if you want to enjoy the benefits too.

It is important to understand who benefits from these reward programs. Mostly, the bank benefits from the services and rewards as it would only increase its prestige and the use of one of their services as an advertisement product you would carry around in your wallet. This doesn’t mean that you can’t benefit from it either; it needs to be significantly grasped that reward points can only work if they have been accumulated over a reasonable period of time. To know more: