Get rewarded for spending money

Now that credit cards have given you the power to shop unlimited without worrying about the cash in your pocket, you have the power to spend money like there is no tomorrow. And since you are getting reward points for spending your money, who would want to stop shopping anyways?

There has been a rage of reward programmes, which are being offered by most credit card companies to promote card usage among customers. Each time a card-holder uses his/her credit card, he/she earns a certain number of points. After accumulating a minimum number of reward points, the customer can redeem them at participating merchant establishments for a variety of rewards/ gifts, as detailed in the rewards programme catalogue.

For example, ICICI Bank's credit card offers a scheme wherein for every transaction of Rs 200, you get one reward point. Once you have accumulated 500 points (which further means spending Rs 100,000), you may get fuel vouchers or gift/sports articles.

Rewards have started to become more significant as card providers have widened the horizon of redeemable gifts to include not only merchandise, apparel, dining, entertainment, gift vouchers, discount coupons and magazine subscriptions, but also financial services, fee waivers, credit card upgrades, air miles and so on.

General Manager of ICICI Bank, B Madhivanan says, "These reward programmes are more popular among the co-branded cards since it is adding relevance to the expenditure they make."

All credit cards companies have this scheme differently depending upon the various cards available:

Credit cards	Worth of single reward point	Minimum reward points to be accumulated
SBI	Rs 50	400 points
ICICI	Rs 200	500 points
Standard Chartered	Rs 125	500 points
Citibank	Rs 150	500 points

Popular as they maybe, reward points also do come with their share of fine print. Make sure you know about them before splurging that card.

Delivery charges

Redeeming gifts is fairly easy. You just have to book your gift online or over the phone, or fill out a redemption form and submit it at the bank branch. The gift will be delivered to your mailing address within 15-20 days of placing the order.

However, you must always check with your credit card provider if any delivery charges would be levied. While most of the companies deliver it for free of cost, there are a few companies that demand delivery charges.

Shell out some cash too

If you are getting free gifts or vouchers without spending extra money, it is definitely a good deal. But you need to be careful when asked to put in extra cash to redeem a gift along with your points.

For example, if you may want to order a vacuum cleaner from a reward catalogue, you may have to pay Rs 975 extra apart from contributing 2100 points. In such cases, it would be wise to find out the actual price of the product and then compare it with the monetary value of the points plus the extra cash that you have to shell out. You may discover that it is cheaper to buy a vacuum cleaner rather than wasting your points.

Lapsed points give no returns

The reward points in your credit can lapse under two situations. One, when the bank permanently blocks your account for non-payment of bill. The bank can forfeit your reward points. Second situation is when you yourself cancel your credit card. But in the second case, banks generally give you a grace period from 15 days to a month or so to use the balance reward points.

Restrictive points

We might feel happy thinking that whatever transaction we make through our credit card, we are sure to get the reward points for this. Stop! There may be a hidden clause to this. There are a few banks like Standard Chartered, which do not give any points when you use your card at the petrol pump. Also, no reward points are given if you use your card for cash withdrawals; this is the same for almost all the banks.

And once you've made up your mind to accumulate points, try to find means to maximize them. Purchasing high-value products will always help to get more reward points in less time. Like, if you buy a television worth Rs 40,000, and have the funds on hand to pay for it, using a credit card can immediately get you 200 points.

Similarly, if you are planning a holiday, using your credit card wherever possible can get you reward points. But make sure that you pay your credit card bills on time and do not keep any dues. If you do so, you will be levied with interest rate and later higher interest rate. And that is definitely not a trade off for collecting reward points.

We all love gifts and they are always welcomed. But be careful and make the most of it! 

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