3 weeks ago

When to use credit card reward points vs paying cash

When you use a credit card, you get special points as a reward.

Those points are like pretend money you can spend.

Sometimes spending points is a great deal, and sometimes it is not a good deal at all.

A man named Adhil Shetty explains that points are worth the most when you use them for things like airplane tickets.

If you have 10,000 points, they could get you a Rs 5,000 flight, which makes each point worth a lot.

But if you use them for shopping vouchers, you might only get Rs 2,000, which is much less.

For everyday things like rent, insurance, and utility bills, it is smarter to pay with real cash because points give very little value there.

If you used points to pay a Rs 10,000 utility bill, it could cost you 66,000 points, which is a huge waste.

You should check what your points are worth before using them.

Try to save your points for big, planned purchases like travel.

Do not buy extra things you do not need just to earn more points.

And remember to use your points before they expire.

Key facts

Point value for flight booking: Rs 0.50 per point (10,000 points = Rs 5,000 flight)
Point value for statement credit/vouchers: Rs 0.20 per point (10,000 points = Rs 2,000)
Point value for utility bill payment: Rs 0.15 per point (Rs 10,000 bill = 66,000 points)
Example earning rate: 2 reward points per Rs 100 spent
Example redemption value: 500 points on Rs 25,000 spend worth Rs 125 at Rs 0.25 per point
Cash-recommended categories: House rent, insurance premiums, utility bills
Key warnings: Hidden convenience fees, taxes on reward bookings, and point expiration dates

financialexpress.com · 3 weeks ago