You are in a store, shopping? It’s very likely the salesperson there tries to talk you into signing up for the store’s loyalty programme. Not only brick-and-mortar stores, credit card bills also often highlight all the wonderful offers and gifts available in exchange for your reward points. All these points and programmes sound good, but how useful are they? We spoke to some card users.

Spending often Reward points are racked up based on how much you spend, since credit card companies want to encourage spending. How often you spend, what you spend on, and what you can redeem these points for, dictate how effective your reward points system is.

Frequent spending is the easiest way to accumulate a good many points for Hyderabad-based Jairam Kannan. “I swipe my ICICI Bank card for virtually every purchase, from groceries to electricity bills. And this deepens the reward points pool quicker. I use only one credit card because it is easier to consolidate all points into a single card than manage to reach reasonable totals on multiple cards,” explains Jairam. He’s got up to 20,000 to 24,000 points at times.

ICICI Bank’s rewards programme has partnered with Payback which, in turn, has tie-ups with several retailers. The choices, therefore, are plenty and are a good mix, says Jairam. “The other positive about the Payback system is that all ICICI Bank reward programmes are in partnership with Payback; points earned on debit card spending and banking transactions are also pooled in,” explains Jairam. However he says, he has not really exploited that aspect of his rewards programme.

Spending types Then, spending in certain retail outlets, for instance, chains with which the card company has tie-ups, or spending types such as airline tickets, can earn more points. Cards that are at higher levels, such as a titatnium or signature award also more points on spending compared to, say, a gold or silver card.

This has worked well for Sona Pant, who has a higher-ranking Coral card from ICICI Bank; picking and choosing where she spends has also helped.

“I swipe my credit card only for airline tickets and high-value purchases. But since my card is among the higher-ranking ones in ICICI Bank’s card line-up, I have managed to accumulate a good many points relatively easily,” explains Sona. So far, she’s got a few thousands’ worth of gift vouchers from an apparel store, got knick-knacks for her house, and been allowed to convert the points into cash and reduce her credit card bill. “Since these rewards programmes allow me to redeem items for as little as 25 points, their applicability is more,” adds Sona.

Spending avenues

Then there are those specialised, frequent spending and taking advantage of this works. Take frequent travellers, for example. Credit cards incentivising travel work like a charm for them. Affirming that is Chennai-based Varun Krishnan, whose job as a tech writer and founder of FoneArena.com sends him globe-trotting. “My Citibank Premier Miles credit card works very well. It’s a good card for frequent travellers,” asserts Varun. Since, it isn’t tied to a particular airline unlike a co-branded card, its applicability is that much wider. Most recently, he made a trip to Hong Kong, paid for entirely with airmiles. “These benefits make it worth the couple of thousands I pay as card membership fee,” feels Varun. He also has a co-branded card with Emirates and Standard Chartered, which was a sweet deal as it came with an approximate 20,000 airmiles as a joining bonus.

He’s even managed to snag business class seats on economy tickets using his airmiles. Like Jairam, Varun also uses his credit card for virtually all purchases. “For one thing, it’s easier to get refunds on cancelled orders in both domestic and overseas transactions with a credit card than with a debit card. Two, there’s really no incentive to use debit cards,” he explains.

Also read: Not sold on reward points

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