0 hidden charges. 0 forex

Rewards Credit Cards: Understanding the Basics

Reviewed by
Created on
April 28, 2023


What’s Inside

People always look for options to save money on their spending. If you desire to get more out of your credit card payments, look no further than a rewards credit card!

With the highest reward points credit card, you can earn miles, cashback, and other perks for every dime you spend. It’s like unlocking a secret world of perks and benefits that never existed before. So why settle for an ordinary credit card when you could earn valuable rewards for everyday spending?

What are Reward Credit Cards?

Reward credit cards offer incentives or benefits for spending money using the card. You can redeem these benefits as cashback, points, or miles. Yet, not all reward credit cards offer equal benefits. So it's crucial to understand the basics before applying for one.

For instance, a cashback rewards credit card might offer 2% cash back on all purchases. But, a points-based reward credit card provides one point for every buck spent, which you can redeem for merchandise, travel, or other rewards. A miles-based rewards credit card might provide miles on purchases. You can use these miles for airline tickets or other travel-related expenses.

Key Factors to Consider When Finding Highest Reward Points Credit Card

With so many credit card options available, finding the best credit card for points can get overwhelming. Moreover, a single reward card isn’t suitable for everyone, regardless of how generous it may seem.

Hence, it’s worth considering a few more steps to finding the highest reward points credit card.

1. Analyse Your Spending Habits

The first step to finding the best rewards credit card is to look where you spend the most. You can use a budgeting app or determine how much money you spend in major categories like shopping, dining out, travel or hotels by writing the details down.

2. Examine the Reward Options

With most cashback cards, you earn a certain percentage of cash on your spending. Other cards offer points or miles that you can convert into money value. So check all the options different banks offer, and see which one suits your spending habits.

3. Check the Reward Card Fee

Some rewards cards seem profitable unless you check the fee to determine how much it will cost. The first fee to consider is the annual fee. You won’t want to pay extra to earn negligible rewards. Check for added fees charged on the card, such as transaction fees or foreign travel fees.

4. Know Your Redemption Options

Redemption options determine how you can use these earned benefits. Most of these redemption options depend on the banks. With cashback credit cards, you earn cash rewards on your purchases. You can redeem it against the statement credit on your credit card bill. Considering the card type, you can use cashback as a deposit to a bank account or request a personal check.

So, review all the redemption options and find a rewards credit card you can confidently use.

Reward Credit Cards - Wrapping Up

Rewards credit cards present an excellent opportunity to earn more on your purchases. But if you pick the wrong rewards credit card, it could cost you more money than benefits.

It’s best to educate yourself before applying for any card. The better you understand how reward cards work, the more rewards you get.

Fi Money has partnered with the federal bank offering a co-branded 5% credit card. You can also enjoy accelerated rewards whenever you spend on any of India's top 21 brands.

Frequently Asked Questions

1. Can I use my credit card reward points to shop?

Yes. If you don’t want to spend these points to pay bills, you can opt for shopping instead. Almost all banks have shopping portals. Visit your bank’s website and check the items you’re considering buying.

2. How can I earn reward points on the credit card?

You earn rewards points as you spend money using the card. So, choose a reward credit card that matches your spending habits and offers the most reward points.

If you travel a lot, choose a reward credit card that rewards travel expenses. Similarly, if you’re a shopaholic, get a card that offers reward points against your e-commerce purchases.

Since the rewards depend on the card type and offers, ensure picking the right credit card. For this, read more about the 16 best rewards credit cards of 2023.


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.
Share this article
Copied Link!
Credit Cards
Rewards Credit Cards: Understanding the Basics


View similar articles in
Credit Cards
Get the Fi app