Updated on October 4, 2023
Reward points are a type of incentive offered by credit card companies to encourage cardholders to use their cards for purchases. These reward points are essentially a form of loyalty program where cardholders are rewarded for each transaction they make using their credit card. These points accumulate based on the amount spent using the credit card and can be redeemed for various rewards, benefits, discounts, or even cashback.
Understanding reward points in detail
The beauty of these reward points lies in their flexibility and potential benefits. Accumulated reward points can be subsequently redeemed for various incentives, ranging from gifts, merchandise, to select product purchases, and even for offsetting annual fees associated with the credit card. Essentially, each reward point holds a tangible value equivalent to one rupee or as per the terms of the credit card agreed upon at the time of issuing the same. By offering a direct correlation between spending and tangible rewards, card companies create a value proposition that incentivizes cardholders to opt for their card over others and to make the card an integral part of their financial transactions.
Most credit card companies provide online platforms or mobile apps that allow cardholders to view their reward points balance, browse available rewards, and initiate redemption requests with ease. Reward points typically have an expiry date, after which they may become void. Therefore. It is important to keep track of the reward points and their validity to ensure that they have not lapsed.