Are Indian Credit Card Reward Points Really Rewarding ?

Indian Credit Card Operators for quite sometime have been offering Reward Points on Consumers Spending at Merchant Establishments [You don’t get reward points on Cash Withdrawals or Loans on Call]

HDFC Gold Credit Card was offering 1 Point for every Rs 50 Spend in 2006 which later got revised to 1 Point for Rs 100 and now it stands at 1 Point for Rs 150. Axis Silver Credit Card offers 1 Point for every Rs 100 spend. So if you had spent Rs 10,000 in a billing cycle you would accumulate 67 Points on HDFC Gold Card and 100 Points on Axis Silver Card.

Now when you have accumulated enough points, you go for redemption. HDFC Gold Card wants 820 Points enabling you to purchase Rs 100 worth Coasta Coffee Gift / Cash Card. This means you would have spent a whopping Rs 123,000 to avail this Rs 100. Assuming the least the Card issuing Bank collects from merchant i.e 1.5%, HDFC Bank Cards Division has actually collected Rs 1845 of which they are giving you back Rs 100. However, high end cards do offer little better reward points such as Signature Cards, but they come with Annual Fees.

Which Rewards / Cashback are Good? Some cards promote themes such as Fuel / IRCTC Surcharge Waivers, Bonus Miles for Air Ticket / Hotel Booking than those offered by a regular credit card. Some offer higher cashback for spending in Departmental Stores. These banks keep rotating offers across sectors such as Food & Beverages, Shopping, Travel, etc and they are constantly updated on their websites. You might want to check the same at regular intervals to steal a deal 🙂

Finally, remember that, using credit cards for Purchases to accumulate Points or Reward Miles is a very BAD Idea unless you are able to pay it in full at the end of the Billing Cycle.

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