Learn the real value of credit card reward points and tips to maximize your savings.
New Delhi | In today's digital era, the use of credit cards has increased rapidly. Banks offer reward points to customers on almost every purchase.
However, did you know that spending these points immediately is not a wise decision? Using them at the right place can double their value.
Knowing the real value of your credit card points is very simple. For this, you need to look at the total points and the redemption value.
For example, if you earn 500 points by spending 25,000 rupees. If one point is worth 25 paise during travel booking, the total value is 125 rupees.
This way, you can easily understand how much money your points are actually worth and what their true value is.
According to financial experts, everyday bills like house rent, insurance premiums, and electricity or water bills should never be paid using reward points.
In these categories, banks usually set a very low value per reward point. This exhausts your valuable points for a much lower return.
Suppose for a utility bill of 10,000 rupees, the bank values each point at only 15 paise. In this case, you will spend nearly 66,000 points.
Conversely, if you use these same points for flight bookings at a rate of 25 paise, you can get a massive value of 16,500 rupees.
"By adopting the right financial strategy and using reward points wisely, you can easily save thousands of rupees every year." - Adhil Shetty, CEO, BankBazaar
Always try to pay for monthly and regular expenses using cash or directly from your bank account. Keep your reward points saved for future major travels.
Credit card companies often offer excellent deals on air travel and hotel bookings. Redeeming points on these deals gives you the maximum possible benefit.
Credit card reward points are an excellent tool for financial savings. By using them wisely, you can make your travels and major purchases highly affordable.
*Edit with Google AI Studio
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