This is a perfect section for you if you are interested in enhancing your knowledge about Financial Matters. A few tips and tricks about Investing, Shares, Mutual Funds and Money Saving Schemes.
Use reward points to buy
Make free money from your credit card

Chandigarh-based Manmohan Garg earns Rs 7.5 lakh worth of reward points and cash-back benefits a year. How? He uses all his 66 credit cards with extreme care and planning (see page 8). While Garg is an extreme case, shopping with your credit card can indeed be rewarding. Every time you swipe your card, you earn reward points. Some cards give you 1 point for every Rs 100 spent.

Others, especially co-branded cards, are more generous, but they give reward points only for specified usage. For instance, the SBI Spice Jet Credit Card gives 5 points for every Rs 100 spent for booking a ticket on the airline. Other spending on the card earns the normal 1 point per Rs 100.

You should choose a card depending on your spending pattern. For instance, frequent flyers may find cards co-branded by airlines very useful. They can rack up air miles that can be redeemed for free tickets. The benefits of such cards far outweigh their costs. For instance, the Jet Airways Citibank Platinum card costs Rs 2,500 a year but it not only gives you a complimentary ticket, but also a 5% discount on domestic and 3% off on international airfares. Also, you earn double the air miles on every Jet Airways ticket bought on the card.

It’s important to read the fine print on the reward points. In some entry-level cards, the points have an expiry date. They lapse if they are not redeemed within 12-18 months. However, issuers like to pamper high-end users with points that can be accumulated without fear of lapse. Keep in mind though that inflation works here as well. A gift voucher of Rs 500 that can be bought today for 1,100 points might cost 1,400 points a year later.

More importantly, don’t let the card’s reward program make you go out and splurge. “The points earned on credit card spending are incidental benefits. You shouldn’t go beyond your means to grab rewards,” says Adhil Shetty, CEO, bankbazaar.com. So, don’t overspend just to earn reward points.

Potential Gain: If you spend Rs 3 lakh a year on your card, you earn 3,000 reward points worth almost Rs 1,800

You Get Rs 1,800 Free
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