Banks give reward points to credit card customers. Its purpose is to encourage the customer to use the credit card. Let us know what is this reward point and how you can take advantage of it.
What is Reward Point?
Customers get reward points on every purchase with a credit card. For example, you have filled a fuel of 1000 rupees at a petrol pump with a credit card of a bank.
If that bank gives you 4 reward points for every 100 rupees purchase of petrol and diesel, then in this purchase you earned 40 reward points on the credit card.
You can redeem the accumulated reward points according to the total purchase of the credit card for six months or a year.
How to redeem credit card reward points?
Each bank offers different facilities to redeem the credit card reward points. Once you have accumulated credit card reward points, you can redeem the same as per the convenience provided by the bank.
There are several ways to redeem it:
Catalog– Most of the banks provide catalog of gifts to their customers in lieu of credit card reward points. You can choose a gift from this. This can include crockery, food items, gift vouchers and clothes etc.
Vouchers – Many banks or credit card companies offer vouchers on redeeming reward points. These vouchers can be used in any store or online shopping. Vouchers can start from Rs 100 to a few thousand rupees.
Cash– Many banks give cash to customers in the form of moneyback cards on redeeming credit card reward points. This cash is added to your credit card balance. With this, you can use it for any work related to credit card like spending or bill payment.
Miles– Many banks offer Miles Card in association with travel companies. This is a better facility for the customers traveling by air. In this, you get miles in the form of fixed reward points on every purchase of flight tickets. These credit card miles can actually be redeemed against flight tickets.
Donation – Now banks also allow their customers to donate instead of redeeming the reward points. If you want to donate to any non-governmental organization (NGO), educational institution or charitable organization, then you can donate to that organization by redeeming the credit card reward points.
Cash Back– Many banks now offer cashback facility to customers on scheduled purchases instead of reward points on credit cards. In this, you do not get reward points on shopping, instead you get cashback.
Other options – Many banks also provide other facilities to their customers in the program of redeeming credit card rewards points. These include fuel, special service, entertainment related features, training, classes etc.
Apart from this, customers of these banks can also use credit card reward points for holiday packages, hotel bookings etc. If the bank has tied up with any departmental store, then you can redeem the reward points of the credit card and shop from it.