A large number of individuals utilizing credit cards frequently seek reward points and cashbacks to mitigate their overall expenditures. These advantages encourage a larger segment of the population to select credit cards that provide additional cashbacks and other appealing offers. The benefits associated with credit cards serve as a crucial marketing strategy for financial institutions.

However, what happens when your credit card provider opts to alter these benefits? This situation can be concerning, particularly if you have chosen a card based on certain advantages. Occasionally, banks implement changes to enhance rewards on alternative cards or to upgrade existing benefits. How should consumers respond to such modifications?

Here are strategies to adjust to these changes in order to continue maximizing the advantages of your credit card.

Understanding the Revisions

It is not advisable to immediately react to revisions and made changes in your cards. Firstly, it’s important to understand the revisions. Credit card issuers can alter benefits for various reasons, such as changing market dynamics, regulatory requirements, or shifts in consumer behaviour. These revisions can include changes in reward point structures, modifications to cashback percentages, alterations in annual fees, or even the introduction of new benefits. That is why you should know how do these changes impact you.

Also Read: 5 common investment mistakes that can cost investors dearly

Review the Changes

As soon as you receive notification of the changes, take the time to review the new terms and conditions. Pay attention to:

1. Reward Points and Cashback Rates: Note any changes in the accrual rate of reward points or cashback percentages. For instance, your card might have offered 2% cashback on groceries but now offers 1% only.

2. Annual Fees and Charges: Check if there are any changes in the annual fees or other charges. Sometimes, enhanced benefits come with higher fees.

3. Expiry of Benefits: Look for any updated expiration dates for reward points or cashback. Certain cards may have recently introduced expiration periods for earned benefits.

4. New Benefits: Sometimes, revisions can also include new benefits. Make sure to review these to see if they offset any reductions in other areas.

Evaluating the Impact

Once you understand the changes, assess how they impact your spending habits. If the benefits were a significant part of your credit card usage strategy, you might need to reconsider how you use your card. For example, if you primarily used your card for dining to earn extra reward points and that benefit has been slashed, it might not be as valuable as before.

Compare Other Cards

If the revisions are significant and negatively impact your usage, it’s time to compare alternative credit cards. Many financial websites and apps offer comparison tools where you can input your spending habits and see which cards offer the best rewards and benefits. Look for cards that align with your spending patterns and offer the best value.

Adhil Shetty, CEO of Bankbazaar.com, says, “When changes take place, the first thing you need to do is to call your card issuer to understand the impact rather than hurrying with decisions. If you think your usages are still getting impacted, you can ask for alternative offers or other cards that best suit your lifestyle or needs. You will get many options to switch or upgrade your credit card. However, if the existing changes are favouring your needs more, you may like to continue with the same. Check whether your existing credit card has more favourable terms or the new one you planning to apply for, you can take a decision accordingly.”

Redeem Existing Rewards

Before any changes take effect, make sure to redeem any existing reward points or cashback that you know may expire or lapse post revision. Some changes might include shorter redemption periods or devaluation of points, so it’s wise to use up what you have before losing out.

Not all changes are detrimental. In fact, certain modifications can result in greater advantages or enhanced card options for you. Therefore, it is essential to stay informed about the changes occurring and to understand how they affect your current transactions and usage, particularly in relation to earning cashbacks or other benefits that were available at the time the card was issued.