Money Saver India
Pay less for redeeming card points

Pay less for redeeming card points

Card issuers have initiated a handling charge for credit and debit card loyalty redemptions. But there are ways to reduce your redemption charge outgo.

Marketing professional Shashank Gupta, 33, acted upon an email he received from his bank about expiring credit card points. After going through the rigmarole of selecting the products he wanted to spend the points on and ordering the products, he got a message from the bank about Rs309 being debited for three items he had purchased.

Yes, banks have started slapping charges for honouring redemption requests. ICICI Bank is the latest to jump onto the wagon of banks charging for redeeming card points. The bank has stated that it will be initiating a redemption handling fee as well as service tax for every redemption request to the extent of Rs99. This money is for courier and handling charges of purchases made when redeeming points.

Earlier, Standard Chartered Bank, SBI Credit Cards too initiated redemption handling charges of Rs99 for each request. HDFC Bank charges Rs75 as a redemption handling charge.

Ways to reduce your redemption fee

– Use the points for online shopping. The charges here are lower (Rs25 per request) or, in many cases, nil.

– Buy one expensive item instead of multiple items while redeeming accrued points.

– Many card issuers give you the option of redeeming points through a gift card as well.

– So a card loaded with the redemption amount would give you many more options rather than physical gifts delivered at your doorstep, at the cost of Rs99 for each packet.

– Ask for online vouchers, where a coupon code is sent to your email. Voila! You can redeem online.

– Pay phone bills using the points, as just the loyalty card number is asked for. Though the conversion ratio of points to money is lower, you won’t have to shell money from your pocket to redeem points.

It’s important to note that in the event of card issuers charging money to redeem points, does it still make sense to opt for cards purely for the points they give. This is an assessment one must make before redeeming points.

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