Credit Card Reward Points Guide: Earn, Value, Redeem

Credit card reward points are a small rebate on your spending: you earn points per ₹100 or ₹150 spent, and each point is typically worth about ₹0.20 to ₹1 depending on how you redeem it. Most of the value is decided not when you earn but when you redeem, after fees, expiry and the issuer's frequent rule changes. This guide is the hub for our reward-points series: it explains the whole cycle and links to a detailed guide for each step.

Nothing here recommends a particular card. Earn rates, exclusions and fees differ by card and change often, so check the current terms on your issuer's website before acting on any figure below.

The reward points series at a glance

How credit card reward points are earned

Every reward card has a base rate, such as 2 to 5 points per ₹100 or ₹150 of eligible spending. Points are usually calculated per complete block, so a ₹290 purchase on a "per ₹150" card earns points on ₹150 only.

On top of that, many cards offer an accelerated rate (often marketed as 5x or 10x) on partner merchants, online spending or certain categories. These extra points almost always come with a monthly or statement-cycle cap, after which you earn the base rate again.

Spends that commonly earn nothing or less

Issuers decide eligibility from the merchant category code (MCC). As of October 2026, these categories are commonly excluded or capped on Indian cards, though the exact list differs by card:

Refunded or cancelled purchases have their points reversed. Read your card's MITC (most important terms and conditions) and reward terms for the exact rules.

What a reward point is worth

Credit card points value depends on the redemption you choose. Indicative ranges as of October 2026, in line with our detailed guides:

To compare options, use two formulas:

• Value per point = (rupee value received − redemption fee incl. GST) ÷ points used
• Effective return % = (points per block × value per point) ÷ block size × 100

Worked example: same points, different value

Illustrative. Sana's hypothetical card earns 4 points per ₹150 on eligible spends. She spends ₹40,000 a month on eligible categories for a year.

• Points per month: ₹40,000 ÷ ₹150 = 266 complete blocks (₹39,900); 266 × 4 = 1,064 points.
• Points in a year: 1,064 × 12 = 12,768 points.

Her issuer charges a ₹99 redemption fee plus 18% GST, so ₹116.82 per request.

The math: 12,768 × ₹0.25 = ₹3,192; 12,768 × ₹0.50 = ₹6,384; 12,768 × ₹0.75 = ₹9,576. Each net figure is gross minus ₹116.82. Return = net value ÷ ₹4,80,000 × 100.

Same card, same spending, three times the value. If she had redeemed every month instead of once, she would have paid ₹116.82 × 12 = ₹1,401.84 in fees, wiping out almost half of the statement-credit value.

How to use credit card reward points well

How to use credit card reward points comes down to a few habits. The best way to redeem reward points guide goes deeper.

1. Redeem for something you would buy anyway. A ₹1-a-point voucher for a brand you never use is worth nothing.
2. Airline and hotel transfers can give the highest value, but only when award seats or rooms are available and you account for transfer fees, transfer ratios and the partner's own expiry rules.
3. Vouchers and the issuer's travel portal usually sit in the middle; compare the portal fare with the direct price.
4. Statement credit is the lowest value on most cards, but it is as good as cash and cannot go unused.
5. Avoid product catalogues unless you have compared the catalogue price with market prices.
6. Batch redemptions to pay the per-request fee fewer times, while staying ahead of expiry.

Fees and GST on redemption

Points themselves do not attract GST. But many issuers charge:

• a redemption fee per request, commonly around ₹99 to ₹299, plus 18% GST;
• a separate transfer fee for converting points to airline or hotel partners on some cards;
• a percentage fee on some "pay with points" features.

At ₹99 + 18% GST, a redemption costs ₹116.82. On a 1,000-point statement-credit redemption at ₹0.25 (₹250), that fee eats nearly half the value. Keep fees in mind when you calculate reward point value.

Expiry: use them before you lose them

There is no RBI rule on how long points last; each issuer sets validity in its reward terms. Common patterns are rolling validity of about two to three years from when points are earned, a fixed annual expiry date, or no expiry while the card stays active. Points are usually forfeited when a card is closed or the account falls seriously overdue.

RBI's card directions also allow an issuer to start closing a card unused for over a year, after informing you; if you do not respond within 30 days, it is closed and points usually go with it. Our reward points expiry guide explains how to check batch-wise expiry dates.

Devaluation risk

Reward points cost issuers money, funded largely by the fees merchants pay on card transactions. When those economics change, issuers trim rewards: during 2025 and 2026, several Indian issuers cut earn rates, added caps on accelerated categories, removed categories or raised redemption fees.

RBI's credit card directions require the MITC to be shared and changes in charges to be notified in advance, but the reward programme itself is the issuer's to change. To protect yourself:

• Treat points as a rebate, not savings; do not hoard them for years.
• Read issuer emails about programme changes and redeem before a cut takes effect.
• Recheck whether the card still earns its annual fee each year.

Spend-linked points on personal purchases are generally treated as a discount rather than income; see is credit card cashback taxable for the exceptions.

If points are not credited

1. Check the reward summary in your statement; some points post only after the statement date.
2. Check whether the spend was excluded, capped or coded under a different MCC.
3. Raise a request in the card app or with customer care, quoting the transaction date and amount.
4. Escalate in writing to the issuer's grievance officer, then the nodal officer.
5. If there is no reply within 30 days or you are unhappy with it, complain free of cost to the RBI Ombudsman at cms.rbi.org.in (helpline 14448).

Our step-by-step guide on reward points not credited includes a sample complaint.

Maximise credit card rewards without overspending

To maximise credit card rewards, use the card for spending you would do anyway, pay the full bill on time, and redeem at the highest value per point. Interest wipes out rewards fast: an unpaid ₹20,000 balance at about 3.5% a month costs ₹700, plus ₹126 GST, which is more than Sana earns in points in a month at statement-credit value. Check the cost with our credit card interest calculator.

Key takeaways

• Points are earned at a base rate per ₹100 or ₹150, with capped accelerated rates; fuel, rent, wallet loads and similar spends commonly earn little or nothing.
• A point is typically worth ₹0.20 to ₹1; the redemption option decides where you land.
• Calculate value per point after fees, and batch redemptions to limit ₹99-₹299 + 18% GST fees.
• Points commonly expire in two to three years and are usually lost on card closure or default.
• Issuers can and do cut reward value, so redeem regularly rather than hoarding.
• Missing points: issuer, grievance officer, then the RBI Ombudsman after 30 days.
• Never carry a balance for rewards; interest costs far more than points earn.