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What are Credit Card Rewards and How to Use them?

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What are Credit Card Rewards and How to Use them?

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Of late, card issuing companies in India have begun to offer comprehensive credit card rewards programmes. Such rewards programmes are designed to entice consumers, like yourself, into using their credit cards to pay for products and services. 

One of the many advantages of credit card rewards is that there are different types ranging from cashback to reward points. Depending on the card issuing authority and the kind of credit card you opt for, the rewards you enjoy may vary. 

Now that you’ve got the basics of this unique concept — let’s look at it in more detail, along with a guide on using credit card reward points. 

What are credit card rewards?

Credit card rewards are an incentive that card issuing companies offer for using their credit card to make payments. By offering these benefits, card issuers promote credit card spending. 

Usually, three major kinds of rewards programmes come with credit cards - reward points programmes, cashback programmes, and air miles programmes. Continue reading to learn more about these three credit card rewards. 

Reward Points 

This is by far the most popular type of credit card rewards that card issuers offer. Each time someone uses their card to make payments, it’s designed to offer points, also known as reward points. 

The rate at which you accumulate these points tends to vary depending on the card issuing company and the type of card you opt for. Usually, entry-level credit cards offer fewer reward points per transaction compared to more premium cards, which generally offer more points per transaction. Also, many credit cards offer accelerated reward point accumulation on certain specific transactions. 

Here’s an example to help you better understand what reward points are in credit cards. Assume that you have an SBI credit card. The card offers 1 reward point for every Rs. 100 you spend offline and 5 reward points for every Rs. 100 you spend online. You swipe your card to make an online payment of Rs. 10,000 and you also use your card to purchase groceries worth Rs. 5,000 offline. These two transactions would result in you getting 500 reward points for your online transaction [(Rs. 10,000 ÷ Rs. 100) * 5] and 50 reward points for your offline transaction [(Rs. 10,000 ÷ Rs. 100) * 5].

How to use credit card reward points?

As you’ve already seen above, you get reward points with every transaction you make on your credit card. Once you accumulate a certain number of reward points, you can choose to redeem them for exciting rewards like discount vouchers, free tickets, and more. 

All you need to do is log into your credit card account and navigate to the reward point redemption section. Here, you can look at the total number of reward points you’ve accumulated so far and check out the various rewards on offer. Once you’ve determined the reward that you want, you can proceed to redeem your points. 

In the case of a physical reward, it will be sent to the registered address. And if the credit card reward is a discount voucher or a coupon, it will be sent electronically as an SMS or email. 


There is a certain category of credit cards that are designed to offer cashback on certain transactions you make. Cashback is a refund and is usually denoted as a percentage of the value of the transaction. 

The amount of cashback you’re eligible to receive depends on the credit card and the kind of transaction you make. Also, most cards tend to cap the maximum amount of refund that you’re eligible to get on a transaction. However, a few cards offer cashback with no cap on the maximum amount. 

How to use cashback rewards?

One of the advantages of opting for a credit card that offers cashback rewards is that you don’t have to do anything to enjoy the benefit. Once the transaction is complete, the cashback automatically arrives in your account — without manual intervention.  

Here’s an example to help you understand how cashback rewards work. Say that you have a credit card that offers a 5% cashback on all online transactions that you make. And that you use the card to make an online purchase worth Rs. 15,000. Once the transaction is complete, a cashback of Rs. 750 (Rs. 15,000 * 5%) will be automatically transferred to your account in a few days. Thanks to this refund, your total credit card liability will decrease from Rs. 15,000 to Rs. 14,250. 

Air Miles 

The third kind of credit card rewards offered by card issuers is air miles. Here, credit cards offer air miles for using your cards to make payments. The quantum of air miles you're likely to get may vary depending on the type of credit card you have and the transaction you make. 

For instance, say that you have a credit card that offers 10 air miles for every Rs. 200 spent on dining. When you spend about Rs. 4,000 on dining, you stand to receive 200 air miles on this transaction. 

How to use air miles?

As you continue to use your card, you keep on accumulating air miles. Once you reach a certain level, you can choose to redeem the air miles in favour of rewards like free air tickets, free hotel stays, or travel-related discount coupons. 

The process that you would have to follow to redeem your accumulated air miles is very similar to how you use credit card reward points. However, in the case of air miles, your rewards will be sent electronically through an SMS or email. 


With this, you must now have a comprehensive understanding of what credit card rewards are. Before getting yourself a rewards credit card, thoroughly review the entire list of features and benefits. This way, you can ensure that you opt for a credit card — more in line with your expectations. 


1. How can I apply for a reward credit card?

Once you’ve determined the credit card you want, you can apply for one by visiting the card issuer’s official website and submitting an application online via Fi Money.

2. What rewards can you get from a credit card?

Depending on the card that you apply for, you can get either of the following three credit card rewards - cashback rewards, reward points, and air miles.

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