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How to Read the Fine Print When Redeeming Credit Card Rewards?

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Created on
July 26, 2023


What’s Inside

Credit card rewards offer a range of perks that incentivise spending. While you can hand them in for airmiles, cashbacks, and merchandise, there might be a hidden component to such redemptions. Credit card companies often charge such redemption fees to process and handle the rewards transaction.

To find out if your credit card has redemption charges, all you need to do is read the fine print. Let's deep dive into why the fine print is important to read and how to decipher it.

Where To Find the Fine Print?

All credit cards have fine print outlining the eligibility norm details, fees, rewards programme rules, exclusions, and more. This fine print is listed under the ‘Most Important Terms and Conditions’ or ‘MITC’ section on the card’s issuer’s website. You can also review it by perusing the final pages of your cardholder agreement. 

Why is it Important to Read the Fine Print?

Credit card issuers must represent essential details in Schumer’s box - a comprehensive table displaying all the fees and charges. Taking a quick glance at the box gives you an overview of the following:

  • APR (finance charges)
  • Interest-free period
  • Balance transfer fee
  • Late payment charges
  • Cash advance charges
  • Overlimit charges
  • Forex charges
  • Rewards redemption fee

While the redemption fee on credit card rewards may be listed here, the details of these fees are often hidden with a small asterisk or dagger symbol that leads you to further clarifications. For instance, many credit card issuers charge a varied rate depending on the redemption method you pick. So, a graded redemption fee structure may charge different amounts for catalogue-based, in-store, and online redemptions. 

What Else Should I Look For in the Fine Print?

Apart from reward redemption fee structures, the fine print on your credit card also outlines the details of the entire rewards programme. To pick the best credit card for points, here’s a list of details you should review:

  • Reward Caps

Some credit cards cap your rewards after your expenses cross a set threshold in a particular category. For instance, your credit card may reward you with 5x reward points for the first Rs. 2,000 spent on grocery shopping. After that, the rates drop to 3x points. 

  • Eligible Transactions

Not all transactions qualify for rewards. For instance, most credit cards (except fuel cards) exclude fuel purchases and cash advance requests from their rewards programmes.  

  • Merchant Categories for Rewards

The fine print also defines which merchant category qualifies for reward points. Let’s say you have a co-branded fuel credit card. Usually, such cards only offer reward points for fuel purchases made at partner gas stations. Similarly, the fine print will define the merchant categories that can bring you accelerated reward points. 

  • Reward Point Accumulation

Some credit card companies allow you to redeem points only after you’ve reached the set threshold number.  

  • Expiry Dates

While the best rewards credit cards come with evergreen reward points, many still have a ticking clock on points. These expiry dates can range from a few months to a year. 

Focusing on the Fine Print can be Rewarding 

While credit cards reward your spending, hidden charges on point redemption can dampen their value. Thus, reading the fine print is a wise decision before choosing the best credit card for points. However, if you want complete freedom from redemption fees, choose the Fi-Federal Credit Card. With this card, you're assured of a 2% valueback through rewards. But that's not all, as you'll also get 5x on your top 3 brands, 2x on all partner brands, and 1x on everything else, including rent and fuel. But that's just the tip of the iceberg, as you'll also enjoy airport lounge access, 1% forex, the freedom to choose your own billing cycle, and personalized reminders. With consolidated spend insights, you can easily track your spending and make informed financial decisions.

Frequently Asked Questions

1. What are the common methods of redeeming credit card rewards?

You can redeem your reward points for merchandise, gift vouchers, air miles, or cashbacks, either online, in-store or by calling the customer care helpline. As for redemption fees, most credit card issuers levy a flat rate on all redemptions. However, some may have a graded system in place, which should be outlined in the fine print section of your cardholder agreement. 

2. Can redeeming credit card rewards lead to any additional costs or hidden charges?

Yes. Many credit card companies levy a fee on reward points redemptions. This fee is charged as a processing overhead and gets credited to the company. Knowing this fee - and its allied clauses - is essential because it can help cardholders determine if the card’s value justifies this expense. 

3. Are there specific restrictions or limitations on the redemption of credit card rewards?

Some credit cards can have restrictions on reward point redemptions. For instance, they may outline a maximum redemption limit for specific categories or prescribe a minimum reward limit for redemptions. 

4. Where to find detailed information on the fine print related to credit card reward redemption?

Usually, the fine print comes under the ‘important terms and conditions’ section of your card agreement. You can also find it on the card issuer’s website and peruse it before applying for the card.


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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