Optimise credit card rewards by picking high-value redemption option

About 70 per cent of credit card users do not optimise their rewards, according to a February-March 2025 survey of over 5,000 users across nine major cities. The survey was conducted by SaveSage, a fintech platform that helps users optimise their credit card rewards and loyalty programmes. 

Why reward points are not optimised

  Many users who hold multiple cards fail to use them strategically. 

“They swipe the same card for every transaction, regardless of whether it offers optimal rewards for that category,” says Adhil Shetty, chief executive officer (CEO), Bankbazaar.com. 

Ashish Lath, founder, SaveSage, attributes the expiry of reward points to lack of awareness, forgetfulness, and poor tracking. “Due to the absence of a unified dashboard, tracking scattered points becomes difficult,” says Shetty. Complexity also plays a part. 

“The redemption options are sometimes too complex to understand,” says Lath. He explains that categories like utilities may have caps or charge convenience fees, which confuses users and prevents them from optimising spends. 

Many users overlook additional benefits. “These include activation bonuses, milestone rewards, or renewal perks — which can significantly add to overall value. Many are also unaware of free perks such as lounge and golf access, insurance, and concierge services,” says Rohit Chhibbar, chief business officer, credit cards, Paisabazaar. 

Many users are also unaware of their cards’ bonus categories, expiry timelines, and redemption thresholds. 

Strategies to maximise rewards 

To maximise benefits, users must choose the right card — one that offers benefits matching their lifestyle and spending preferences. “Consumers who own multiple cards need to understand their reward structures and use the right card for the right purchase. Most credit cards offer accelerated rewards on select categories or brands, which must be leveraged to derive maximum value,” says Chhibbar. 

By choosing the right cards, users can earn accelerated points in categories like dining, travel, etc. 

Shetty recommends setting monthly reminders to check rewa­rds, using apps to track points, and monitoring expiry dates. Many users settle for cashback, which is simple and convenient, and directly reduces the credit card bill, making it the default choice.  

Chhibbar suggests comparing all the available redemption options periodically and redeeming in categories where the point value is highest (provided it matches the user’s spending pattern). “In most cases, point-to-mile conversion or vouchers deliver higher value than direct cashback,” he says. 

Lath agrees. “Travel, merchandise, and exclusive partner offers are often more valuable than cashback,” he says. He adds that the per-point value for cashback credit is way lower than transferring those points to an airline or hotel loyalty programme. 

Chhibbar suggests reviewing transaction limits, spending caps, fees, and waiver conditions. Shetty highlights the value of tracking promotional offers, where redemptions can offer higher value. 

When to switch cards

  The SaveSage survey found 65 per cent of users are open to switching their primary card for better benefits. As spending patterns evolve, existing cards may no longer offer the best rewards in those newer spending categories. Switching or supplementing with a new card can help. 

For instance, travel-focused users may benefit from a card offering air miles rewards. “Check if the new card offers better rewards in your main spending categories, whether it has a high annual fee, and how its customer service and redemption experience stack up,” says Shetty. 

He adds that older cards contribute positively to credit history and score, so it helps to keep them active even when their usage has reduced.

 

UPI on credit cards: Benefits & pitfalls

 

*  UPI is linked to credit card instead of bank account, enabling QR-based UPI payments up to credit limit

 

*  Combines convenience of UPI with reward points and free credit period of card

 

*  High interest cost if dues not paid on time 

 

*  Limit credit utilisation to 30%