Credit Card Reward Points - A Consumer Guide to Choose Smartly Among Many Reward Options

ICICI Bank has perhaps the largest credit card base in India and also has one of the most elaborate reward programs among the banks. They are the ones who started the express reward program which gives accelerated accumulation of reward points depending on the total purchase on a card and it gives incentive to customers to spend on ICICI card as they can accumulate points at up to five fold speed than the normal pace of 1 point for every Rs 100 spent. The express reward program of ICICI Bank became popular in no time as customers were accumulating more points than other cards and their express reward program were soon emulated by other banks like HDFC.

The first thing that a consumer should understand that it is not only the number of reward points that matter but also the kind of gifts that are available for redemption and the number of reward points required to redeem them. I have been using credit cards for the last 10 years for personal and business expenses and always do my analysis before redeeming the points which I accumulate on a regular basis. I have cards from almost all leading issuers like ICICI Bank, HDFC Bank, Citibank, Standard Chartered and HSBC Bank and if you ask my pick I would say HSBC among silver card and HDFC among gold.

ICICI Bank which is the most aggressive player in the credit card space but it has also the most hyped reward program. Initially it had very good reward options like Taj and Welcome group hotel vouchers for its gold members but those has been withdrawn long back. Actually their express reward program has lost its attraction as you need more ICICI reward points to redeem a gift (say a Pantaloons voucher worth Rs 500) compared to other cards like HSBC or HDFC.

Usually the banks have more or less the same gifts for its reward program but now individual banks are working to differentiate in their offerings. Still the common items across all reward programs are the departmental store vouchers, vouchers for apparel and fashion accessory brands, fast food restaurant vouchers and some consumer durable products like mixer/grinder, toaster, OTG and microwave. But a consumer having more than one credit card will do well if he first compares and then select the right reward points for claiming a particular voucher as I have found that you need almost double reward points in ICICI card than that of HSBC to claim some particular gifts.

If you have a gold card then probably you have a wider choice as most banks have some special reward options for gold card members which are generally leisure products like hotel vouchers, perfumes and collectibles. The HDFC gold card program allows you to choose between some good perfume and EDT but I would not suggest the collectibles like Victorinox Swiss Army Knife or Magpie bar set as I don't think those deals are attractive. For ICICI gold members the deals are not so good anymore as now they have more deals which require you to pay additional money and not just reward points.

ICICI Bank has something called spotlight rewards where they try to push junk and cheap Chinese made electronics products like digital camera, USB pen drive and so on and that too sometimes on cash and reward points. The spotlight rewards are highly avoidable and basically they provide the least value in any reward category by any bank. I personally ordered once for a foldable tea table by redeeming for more than 1000 points under the spotlight reward category and the stuff I got was actually defective and would hardly cost Rs 100.

It is not only ICICI that ships defective materials but other banks too and so the choice of the gift is very important if a customer wants to make the most out of its reward points. I ordered once OTG from my HDFC Gold card and the OTG was found defective. After lots of complaints and persuasion that defective OTG was replaced with another defective one and since that day I decided to never go for any consumer durables.

I think a smart consumer should avoid consumer durables and any electronic items as these credit card companies seems to source factory seconds to cut cost which is actually shameful. The best things you can get are the vouchers but don't forget to make the comparison if you have multiple credit cards. Some other things you can try are perfumes, magazine subscriptions and collectibles but make sure that they are not asking for too many reward points.

If you are holding a co-branded card like Citibank Jet Airways or Amex Indian then converting the reward points to Air miles are a good option. HSBC silver cards also offer Jet Airways and Kingfisher air miles and that's why I think it has one of the best reward programs as on today.

The final advice is don't get yourself in a debt trap by getting lured by the gifts and express reward programs. A smart consumer pays all bills and expenses thru credit cards but also pays the credit card bill in full. This is the best way to accumulate your reward points and redeem them for cool gifts at a later point with incurring interest or additional cost.