There’s been a lot of chatter about whether credit cards in India are still rewarding. Let’s break down the reality of the current landscape and clarify why they still offer great value.
Current Reward Structures
- Entry-Level Rewards: You can earn 5% cashback on entry-level credit cards.
- High Spenders: If you’re spending over ₹1.5 lakhs per month, you can unlock rewards exceeding 10%.
- Miles Game: For those focused on travel, expect decent rewards at 4% miles on relevant spending.
Specific Cashback Offers
- Recharge: Enjoy 25% cashback on mobile recharges.
- Dining: Get 10% cashback on food purchases and up to 30% on selected fine dining.
- Accessible Cards: Many of these rewards come from cards that are easy to obtain.
Managing Expectations
While earning 25,000 points for ₹1 lakh spent may not happen every month, that doesn’t mean credit cards are losing their appeal. It’s akin to saying the stock market isn’t rewarding just because recent gains aren’t as high as post-COVID-19 peaks.
Rational Expectations:
We need to adjust our expectations. Exclusions and restrictions on certain transactions, like rent or government payments, are understandable. The value lies in how we utilize the cards effectively.
Optimizing Your Credit Card Strategy
- Be Grateful for Rewards: Many cards still offer rewards on everyday spending, so take advantage of what’s available.
- 3-5 Cards Strategy: Whether you’re a newbie or an expert, managing 3-5 well-chosen cards can optimize about 90% of your spending.
- Research is Key: Trying to optimize 100% of your spend can become cumbersome, requiring significant effort and research.
Conclusion
India continues to be one of the most rewarding markets for credit card users. Don’t overthink it. If you start leveraging rewards now, you’ll be glad you did in five years.
Start earning cashback and points today!