Archive · 6 Aug 2026
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.
Using reward points for flight tickets can deliver 2.5 times more value than redeeming them for statement credit or shopping vouchers, according to BankBazaar CEO Adhil Shetty.
A 10,000-point redemption for a Rs 5,000 flight ticket yields Rs 0.50 per point, while statement credit or vouchers may yield only Rs 2,000, or Rs 0.20 per point.
Cash is recommended for routine expenses such as house rent, insurance premiums, and utility bills because these categories offer low point-to-rupee redemption rates.
To calculate reward value, multiply total points earned by the points' monetary value at redemption, as shown in a Rs 25,000 purchase example earning 500 points worth Rs 125.
Cardholders should compare redemption values across travel, vouchers, and cashback, watch for hidden costs and expiration dates, and avoid overspending just to earn rewards.
A Rs 10,000 utility bill paid with points could cost 66,000 points at Rs 0.15 per point, versus Rs 33,000 in value if those points were used for flight bookings.
- Who
- Credit cardholders and consumers; expert Adhil Shetty, CEO of BankBazaar, is quoted.
- What
- Guidance on when to redeem credit card reward points versus paying cash, including calculation methods and common mistakes.
- When
- Not specified in the articles; no specific date is mentioned.
- Where
- India, indicated by rupee (Rs) values and references to CIBIL scores.
- Why
- To help consumers maximize the value of reward points and reduce their overall expenses by redeeming strategically.
- 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