The issuance and use of credit cards have accelerated since Covid-19 hit the country in 2020. In fact, almost every aspect of our daily lives have changed as a result of the pandemic, including consumer spending and shopping patterns.
Reports say the festive season helped credit card spending touch a record high of Rs 1.22 lakh crore in September 2022. With the rise in the number of credit cards, there has been an increase in lifestyle aspirations, demand for credit, and banks introducing newer products and fintech partnerships, giving rise to the now popular co-branded cards.
Access to credit apart, a primary reason for consumers opting for credit cards is the gifts, benefits, discounts, and other deals that come with them. Depending on the credit card, one can use its rewards program to earn points for purchases made in categories, including shopping, dining, bill payments, entertainment and travel. As one spends, one earns points that can be redeemed for a variety of rewards.
Today, co-branded cards have emerged as the new go-to payment method as they appeal to consumers across demographics and have an affinity for certain categories.
Numerous banks, merchants and fintech companies have introduced co-branded cards aligned to their target segment’s needs. These credit cards are tailored for individual needs – almost a card for everyone. Along with these customised cards come attractive reward point programmes that encourage different segments to avail of the benefits, making it a smarter approach to managing payments.
It is vital that credit card users are aware of the benefits that the cards come with. But many first-time credit card users are unaware of the optimum way to utilise their credit card reward points. It is important to note that the value of reward points and the redemption of points vary significantly from bank to bank depending on the type of card – from baseline to premium offerings. How to earn reward points:
Credit card reward points are automatically earned every time you swipe the card for a purchase. In most cases, the cardholder earns one point for every Rs 100 to Rs 250 spent on the credit card. In addition, the higher the value of your purchase, the more points you will earn.
However, the number of points you accumulate with every purchase will vary depending on the type of card you have and the issuing bank. A co-branded travel credit card, such as MakeMyTrip ICICI Bank Credit Card, will earn you more points on flight and hotel bookings than a regular credit card. Opting for multiple co-branded cards and using them for the specific categories they are tailored to will help you earn maximum benefits that you can redeem across the benefits ecosystem.
Here are some tips on how to maximise the benefits of your credit card reward points:
From hotel bookings to flight tickets to charity contributions, cardholders are spoilt for choice when it comes to choosing ways to redeem their reward points. They can plan their next holiday, overhaul their wardrobe or stock up on groceries. They can browse extensively through catalogues to make their choice and find the best option for their points. Therefore, it is pivotal to first select the right credit card by comparing different cards and choosing one that offers the most benefits suited to one’s lifestyle and spending patterns.
If one is a smart credit card user and understands the credit card ecosystem and its benefits, credit cards can be a smart way to manage one’s expenses and get the most out of them. It helps the user to build a learning curve to cope with finances in a more responsible manner and have a risk-free expense management experience.
