Swipe Smart: A step-by-step guide to optimising credit-card rewards

Opt for credit cards that match your habitual spending.

For most people, credit cards are an everyday payment tools for groceries, subscriptions and online shopping and not just limited to travel or luxury purchases. Yet, maximising rewards demands discipline to avoid debt.

With different cards offering a string of benefits, it's essential to understand how to optimise your rewards earnings. By assessing your spending habits, selecting the right cards and tracking key metrics, you can earn valuable rewards without overspending.

Assess spending and select categories

Begin by analysing expenses to match cards with high-reward areas. Discretionary spends such as travel, dining and e-commerce often yield accelerated points, while groceries or utilities may not unless targeted.

Track current patterns via fintech apps that consolidate data. “Match cards to your spending categories: use travel cards for flights and hotels, shopping cards for e-commerce and dining cards for restaurants, ensuring that you can earn accelerated rewards without increasing your total spending,” said Ashish Lath, founder & CEO of SaveSage, a fintech platform that helps manage and optimise their credit card rewards and loyalty programs.

Many cards offer extra reward points after reaching certain spend thresholds. So, plan your usage to capture these milestones efficiently, but only within budgeted limits.

Understand reward types and metrics

Cashback provides instant, transparent value — ideal for beginners. “Reward points and miles offer significantly higher value compared to cashback cards but they offer value in terms of travel or other benefits which may not appeal to everyone,” Lath said.

To optimise your rewards strategy, track key metrics monthly, including earn rates per category, total spend versus rewards earned, expiry dates of points, bonus category utilisation, and consolidated point balances across multiple cards.

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Choose cards for long-term alignment

Prioritise sustained value over sign-up bonuses. Opt for cards that match your spending habits.

“No-fee cards are sufficient for most users. Premium cards make sense if the benefits (accelerated rewards, partner perks) clearly outweigh the cost, and if you already spend within those categories without overspending,” Lath said.

Consolidate to fewer cards for meaningful redemptions.

Avoid pitfalls and traps

Banks design promotions and accelerated reward structures to encourage more swipes, often using milestone bonuses and festive multipliers to tempt users.

“A common pitfall is using credit cards like debit cards, where you spend without having the funds to pay off the bill,” said Lath. Then, card users are making impulsive buys just for the offers and snapping up unnecessary items via no-cost EMI plans.

Use the right card for the right merchant. For instance, the ICICI Amazon Pay card accelerates rewards for Amazon transactions.

Also read | Hotel loyalty programmes: How to turn nights into free stays and upgrades

Recognise warnings and course-correct

Red flags include accumulating balances with interest charges, overspending to hit milestone targets and scattering points across multiple cards without a clear redemption plan.

To get back on track, stop making discretionary purchases, pay off outstanding balances in full, consolidate points into one programme and reassess if your cards align with your spending habits.

Rewards optimisation

Redeem points in bulk to avoid redemption fees, which can range from Rs 99 to Rs 199 per transaction, rather than making multiple small redemptions.

Know the expiry rules for your points i.e., some expire in two-three years, while others stay active with regular card use. You can extend their validity by transferring points to travel loyalty programmes.

“Leverage fintech platforms to track points, monitor value across multiple cards, and identify the most effective redemption options,” Lath said.

Pay statements fully — interest erases gains. Always check your statements monthly.