Credit cards help us save money on regular expenses, including buying grocery, paying our utility bills, and travelling for personal and official purposes. Among these benefits, one of the most enticing features for many cardholders is the opportunity to earn reward points.

These points can be redeemed for a variety of rewards, including cashback, travel miles, merchandise, or gift vouchers. It is a general perception that the more you spend the higher will be your credit rewards. But that is not true in all circumstances. You can earn reward points even when you spend within your budget. However, maximising credit card reward points without overspending requires disciplined use of your card.

Here is a guide to help you understand how to earn more rewards without spending too much.

Earning Reward Points

Credit card reward points are incentives offered by credit card issuers to encourage card usage. Every time you make a purchase using your credit card, you earn a certain number of reward points based on the transaction amount and the card’s rewards program. These points accumulate over time and can be redeemed for various rewards offered by the card issuer or its partners.

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Types of Reward Points

There are several types of credit card reward points, including:

  1. Cashback: Cashback rewards provide a percentage of your purchase amount back as cash or a statement credit.
  2. Travel Miles: Travel rewards offer miles or points that can be redeemed for flights, hotel stays, car rentals, or other travel-related expenses.
  3. Merchandise: Some cards allow you to redeem points for merchandise from a catalogue of products, ranging from electronics to household items.
  4. Gift Cards or Vouchers: Many credit card issuers offer the option to redeem points for gift cards or vouchers that can be used at participating retailers or online stores.

Earning Higher Reward Points

While earning credit card reward points can be enticing, it’s essential to avoid overspending or falling into debt just to accumulate points. Here are some tips to help you maximize your reward points without overspending:

Understand Rewards

Before using your credit card, take the time to understand its rewards program thoroughly. Familiarise yourself with the earning rate for different types of transactions, any bonus categories, and the redemption options available.

Choose the Right Card

Select a credit card that aligns with your spending habits and lifestyle. If you frequently travel, a travel rewards card may offer the most value. Similarly, if you prefer cashback rewards, look for a card with competitive cashback rates on your everyday purchases.

Use Bonus Points

Many credit cards offer bonus rewards for spending in specific categories such as dining, groceries, gas, or travel. Take advantage of these bonus categories by using your card for purchases in those areas whenever possible. However, be mindful not to overspend or make unnecessary purchases solely to earn bonus points.

Adhil Shetty, CEO, Bankbazaar.com, says, “Many credit cards offer sign-up bonuses or welcome offers to new cardholders. These bonuses typically require you to spend a certain amount within a specified time-frame to earn bonus points or rewards. If you’re considering applying for a new credit card, look for one with a lucrative sign-up bonus that you can attain without overspending.”

Pay Your Bill In Full

To avoid paying interest charges and accruing debt, make it a habit to pay your credit card balance in full each month. Carrying a balance not only incurs interest fees but also negates any benefits you may gain from earning reward points.

Monitor Your Spending

Keep track of your spending to ensure you stay within your budget and avoid overspending. Set a monthly spending limit and stick to it, prioritizing purchases that align with your financial goals and earning potential reward points responsibly.

“Once you’ve accumulated a significant number of reward points, consider your redemption options carefully. Choose rewards that offer the most value for your points. Additionally, be mindful of expiration dates and any restrictions with redemption options,” adds Shetty.

By understanding your card’s rewards scheme, paying your balance in full each month and redeeming points wisely, you can make the most of your credit card rewards while staying financially savvy.