The Buyt Desk
Credit card is not a bad thing when used smartly. In fact, this small piece of plastic can help you save a lot of money and earn, too. Want to know how?
A US physicist Konstantin Anikeev managed to earn Rs. 2.17 Crores from his credit card. It may sound unbelievable but it is true.
Every credit card accompanies certain benefits. Reward point is one of them. Every time you make a transaction with your card, you get reward points in return. Credit card companies also provide reward points for the timely payment of credit card bills. Anikeev accumulated these points and became rich. After this incident came to the central bank’s notice, they altered this provision to avert the misuse of reward points or cashback. However, you can still save money by smartly using the credit card’s reward points.
What is Credit Card Reward Point?
Credit card reward is the points you earn on the expenditure of every Rs 100. Remember, the ratio of reward points on every spending may vary according to cards.
In addition to that, the reward points also vary according to the place you have used the credit card. E.g., using a credit card at a particular restaurant or site earns you a better reward point.
As you spend, the reward points accumulate in your account, and once it is enough, you can best use them in your next spending.
Pay Your Bill – Every reward point carries some value, and it varies across the cards. It can range from 25 paise for one reward point to Rs 1 for one reward point.
Since the reward points are cash, you can use them to pay off your card bill if you wish to do so. However, not all banks allow paying an outstanding bill via reward points. Do check it before acting on it.
Use Them to Buy Things You Need – You can use the reward points you earned on the credit card to buy things. If your bank does not allow you to pay the bill via reward points, you can use them to buy stuff. It might surprise you that every bank offering credit card has a shopping portal. And they allow credit card holders to use the reward points to shop. It includes a wide range of products.
Some of the best bank stores are ICICI payback, HDFC MyRewardz, etc.
Buy Vouchers – On the e-website of your bank, you can find some exciting deals and vouchers which you can use to shop for products from your favorite brand, and if not, you can save some bucks.
Book Flight/Hotel – Some bank allows credit card users to book flight or hotel tickets with reward points. Even if the reward points do not help you buy the whole flight ticket, they will help you get a decent discount on the ticket price.
Gift Card – You can use reward points to buy gift cards which you can further use to shop for things.
Cashback – Another simple way to redeem reward points is cashback. Just ask your bank to give you cashback in place of reward points. After this adjustment, you will get cashback instead of reward points for every transaction.
Other Options – Other than the discussed option, banks provide discounts on fuel charges, entertainment purchases, training classes, etc., under their reward points redemption program. Although, this option varies across cards.
