How Credit Card Reward Points Work in India — Complete Guide
Reward points are the primary benefit of most credit cards. Understanding how they work helps you maximise value from every purchase.
How You Earn Points
Every eligible purchase earns reward points based on the card's earn rate. For example, a card offering 2 points per ₹100 gives you 20 points on a ₹1,000 purchase. Many cards offer accelerated earn rates (2x–10x) on specific categories like online shopping, dining or travel. Some purchases like fuel, utilities and EMI payments may earn fewer points or none at all — check the exclusions list.
Understanding Point Value
Each reward point has a monetary value that depends on how you redeem it. Typical values range from ₹0.20 to ₹1.00 per point. For example, HDFC Infinia points are worth ₹1 when redeemed for flights via SmartBuy, but only ₹0.30 for statement credits. Always calculate the effective cashback by multiplying your earn rate by the point value.
Redemption Options
Common redemption options include: product catalogue (usually poor value), statement credit (moderate value), flight/hotel bookings through bank portals (often best value), gift cards, and transfer to airline miles programmes. Transfer to airline miles is typically the highest-value option for premium cards — 1 point can be worth ₹1–2 when used for business class flights.
Points Expiry
Most cards expire points after 2–3 years of inactivity. Some premium cards offer points that never expire. Always check your card's expiry policy and redeem before points lapse. Setting a calendar reminder every 6 months to review your points balance is a good practice.
Cashback vs Points vs Miles
Cashback cards return a fixed percentage directly to your account — simple but typically 1–5%. Points cards offer higher potential value but require effort to redeem optimally. Miles cards are best for frequent flyers who can use airline redemption charts. Choose based on your spending pattern and willingness to manage redemption.