With the festive season around the corner, using credit cards that offer higher cashback on shopping can help manage expenses more efficiently. Co-branded cards can be particularly relevant for those who prefer shopping on the associated platforms.
First, analyse your spending pattern and the rewards on offer. A card that maps your biggest expense such as buying gadgets, apparel, dining, or travel will deliver better value. When used for planned purchases and paid off in full, cashback and rewards can help reduce the overall cost of spending.
“Rather than relying on one card for every purchase, consumers should align cards and choose the ones that offer higher value-back in their key spending categories,” says Santosh Agarwal, chief executive officer, Paisabazaar.
Those who prefer multiple platforms can find better value in cards that provide attractive cashback across specific categories, irrespective of the merchant or platform.
The right card depends on where and how much you normally spend rather than simply the highest advertised cashback rate. Adhil Shetty, CEO, BankBazaar, says a card offering 5% cashback on a category you rarely use may be less useful than one offering 2% on categories where you regularly spend. “Check the cashback rate, spending caps, exclusions and redemption conditions,” he says. The annual fee matters, particularly if it is waived only after reaching a certain spending level.
Festive offers can provide attractive rewards, but they are usually available for a limited period. A card should also offer useful benefits on spending throughout the year. Year-round rewards can make it easier to assess whether the benefits justify the annual fee.
Disclaimer: This article is for informational purposes only and should not be construed as investment advice. Investors should assess their financial goals, risk appetite and consult a qualified financial advisor before making investment decisions.
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