Decoding Reward Points: The Main Feature to Look for in Credit Cards

Decoding Reward Points: The Main Feature to Look for in Credit Cards


Credit cards have simplified spending. In addition to being convenient and simple to use, they offer discounts and reward points to customers. Yes, customers are rewarded by banks or credit card firms for using their credit cards for various transactions. These reward points can be redeemed by the customer against vouchers, discounts, and a lot more. This has made reward points a significant factor when choosing among the wide range of credit cards available. Let’s explore more about reward programmes and how they function.

Reward Programmes: How They Benefit Cardholders

There are a variety of credit cards available to consumers these days; some are designed for certain groups of people and some for specific purposes. Credit cards offer three types of rewards - cashback, miles, and reward points.

Individuals can accumulate these reward points over time. Credit card reward programmes benefit cardholders in the following ways:

  1. Cardholders can earn rewards on every purchase.
  2. The reward points can be used to offset expenses.
  3. Some cards provide exclusive discounts, bonus points, or offers.
  4. Some cards offer customised rewards based on the preferences and spending habits of the cardholder

Reward Points: How They Work in Credit Card Programmes

Reward points are perks offered by the credit card company or bank to their cardholders for every transaction made using the card. The reward programmes offered vary across different cards. They could be either of the following or a combination of any.

  1. Cashback: A simple reward wherein a certain percentage of the amount spent is returned to the cardholder.
  2. Air miles: This reward programme is best suited for frequent flyers. Any purchases made using the card earn the cardholder air miles.
  3. Reward points: The cardholder is allocated points for every transaction made using the card. The point value differs across banks and cards.

The VISA Celesta Credit Card by Federal Bank provides a lot of offers on shopping, travel, dining, lifestyle, and entertainment. Additionally, cardholders can enjoy the bespoke 3-2-1 reward structure, wherein they receive 3x rewards on travel and international spending, 2x rewards on dining categories, and 1x rewards on other categories. Check out their Credit Card section to know more. 

How to Earn Reward Points and Convert Them into Rewards

Individuals can earn reward points in many ways on their credit cards. A few common ways of earning reward points are:

  1. Welcome points: Few credit card companies offer welcome reward points to their new cardholders.  
  2. High-value transactions: Using the card for high-value transactions such as travel bookings or jewellery can help earn high reward points.
  3. International usage: Few credit cards offer extra points when the card is used internationally. 
  4. Loyalty Points: Rewards are offered on renewing credit cards as well.
  5. Bonus points: On spending a specific amount on the card, bonus points are rewarded by some companies/banks.
  6. Regular reward points: Every transaction made using the card earns reward points.

Visit the Federal Bank Rewards Page to learn more about the reward point programme on various credit cards offered by Federal Bank.

Reward Point Redemption Options

Credit cardholders can redeem their accumulated reward points against either of the following, as offered by their credit card company or bank. Most banks allow the cardholder to redeem their points within 2 to 3 years.

  1. Gift Vouchers for clothing/lifestyle brands or restaurants
  2. Cashback that can be used to pay outstanding balances on the card
  3. Merchandise as offered by the bank
  4. Donations towards charitable institutions listed with the bank
  5. Air miles that can be used for air tickets or discounts


Conclusion

Credit card reward points have changed the way people use their credit cards. They offer a lot of benefits to cardholders through flashbacks, reward points, and air miles. Reward points can help cardholders make the best use of their credit cards and enhance their wellbeing and lifestyle. Visit the Federal Bank Rewards Page to learn more about the reward programmes offered, reward points, and redemption options on Federal Bank Credit Cards.