Banks and credit card companies offer a variety of reward point programmes on their respective credit cards. Under these programmes, customers earn points based on their credit card spending. Different cards come with different offers. Once a customer accumulates a certain number of points on their cards, they can redeem these points for various benefits such as vouchers, cash back, air miles and other benefits.
Some credit cards allow their customers to convert reward points directly into cash. Therefore, you can effectively use reward points to partially or fully pay your credit card bill, depending on the amount due and the number of reward points on your card.
How you can use reward points to pay your card bill?
You should check if your card has the feature of converting reward points into cash. If it does, you can visit the reward points redemption portal of your credit card issuer or bank and convert your reward points into cash. The converted amount will be adjusted against your credit card bill for the next billing cycle.
How do credit cards calculate reward points?
You receive reward points for every rupee you spend, but the points you earn depend on the type of card you have. The same bank may have two different point systems in place for two different cards. So if you spend the same amount on two cards, you might not get equal points. Some cards may offer extra points for specific types of spending. For example, one credit card might provide 2 points per rupee spent on all travel-related expenses, such as hotels and airfare. On the other hand, another credit card might only offer 1 point per rupee for the same expenses.
Five Key things to remember about reward points:
- Credit card reward points have an expiration date, so you should be aware of when your points expire and redeem them before they lapse.
- Credit card reward points are usually a bonus perk given based on your spending. Avoid unnecessary expenses just to collect points.
- If you are planning to use your reward points to buy a product, then first you should check the price outside to know the price difference. The price of that product at offline stores or on other e-commerce portals might be lower. A customer sees points as freebies, and ends up wasting reward points or does not use them optimally.
- If there is an outstanding balance on your card that needs to be paid, you should convert points to cash. This allows you to save money.
- Always make timely payments for the due amount on your cards. This not only helps you avoid late payment fees or interest charges but also leads to maintaining a good credit score. On top of all the benefits, it ensures that your reward points receive their full value.