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How credit card rewards work and how to use them

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Created on
March 30, 2023


What’s Inside

Credit card rewards are often why people use credit cards, among other benefits like a long line of credit (the maximum loan amount that the customer can borrow) and payment options like EMIs. But how do credit card rewards work, and how can cardholders use them to the maximum advantage? It is worth discovering as you can spend freely with your credit card and save with reward points.

How Credit Card Rewards Work

Every bank or financial company issuing credit cards offers reward points on most cards they issue. Several credit card companies offer bonus rewards for signing up with a specific credit card. This prompts you to get one in the first place. But how do these reward points work?

Although reward points are offered with most cards and card issuers, their worth will vary across different kinds of cards and issuers. So, returning to the main question is the working of reward points. Every time you swipe your card to make a purchase, you earn a certain number of points, depending on how much you have spent. The reward points earned may also be dependent on the type of purchase you make. To illustrate with a hypothetical example, say, if you spend ₹100 on a product, you may earn 10 or even just 1 reward point.

Taking this a step further, you may earn more reward points with a particular card if you spend on apparel rather than on groceries. If you are wondering whether there is any highest rewards credit card, the answer is that it largely depends on the type of credit card you get.

The Perks You Earn

Credit cards offer various advantages via rewards to customers. These are in the form of cash credits, air miles, discounts and gift vouchers. When you opt for a particular type of credit card, it is recommended that you base your choice on your unique spending patterns and habits. Credit card rewards work for particular users when they spend large sums with the card of their preference. Hence, if you are a frequent traveller and spend on hotel bookings and flight tickets regularly, you earn more points with a travel reward credit card than with one related to shopping.

How to Use Rewards

You may have the highest reward points credit card, but if you do not use it to the maximum advantage, you will lose all the benefits rewards can give you. Reward points get collected in your account. However, card reward points will lapse if not redeemed by a specific expiry date. Some credit cards, like the Citibank Rewards Card, have no expiry date for points; you can redeem them anytime. Each credit card and credit card company has different regulations for redeeming credit card reward points, so you must check your credit card statement.

When you wish to redeem your points, you must call the customer care number and request redemption. Alternatively, you can also follow an online menu-driven procedure to redeem points. Once you have placed a request to redeem reward points, they automatically show up as a cash credit in your credit card account, or you may opt to use these to make purchases of products aligned with the rules of your credit card company. Reward points are also redeemable for gift vouchers and air miles you collect to finally buy flight tickets. Credit card rewards take on many forms, and you should check with your own credit card issuer regarding the advantages you can avail of.

Final Words on Rewards

Various credit cards give you a range of rewards, and you can get your card that is tailor-made to suit you. Credit cards offer you many pros, but the cons exist if you do not responsibly use . You cannot afford to overspend lest you can not pay your bills. If you want a platform for your banking and money management, you can explore Fi, with great features of not just opening a bank account, but giving you ideas to grow your wealth.


What is the smartest way to use a credit card that has rewards?

The smartest way to use a credit card that has rewards is to opt for a card that holds the maximum benefits for you as a cardholder, and redeem points before they expire. Use the right card catered to your spending habits and make the most of any welcome bonus reward points.

How do I get the most out of my rewards credit card?

You can get the most out of your rewards credit card only if you have a card that matches your preferred spending pattern. Secondly, you should keep an eye on your statement, ensuring your credit card points do not expire.


Fi Money is not a bank; it offers banking services through licensed partners and investment services through epiFi Wealth Pvt. Ltd. and its partners. This post is for information only and is not professional financial advice.
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