Reward points are the currency of the credit card industry — but unlike real currency, their value is deliberately opaque. A bank advertising "earn 10 reward points per ₹150 spent" tells you nothing useful until you know what each point is worth at redemption. Across India's major credit cards, point values range from 0.25 paise to 1 rupee per point, a 4× variance that completely changes the effective rewards rate.
The reward point math
The formula is simple: Earn rate × Point value × 100 = Effective cashback percentage.
Examples: - HDFC Regalia: 4 points per ₹150 spent, 1 point = ₹0.50. Effective rate: 4 × 0.50 / 150 × 100 = 1.33% - SBI SimplyCLICK: 10 points per ₹100 on Amazon (5× acceleration), 1 point = ₹0.25. Effective rate: 10 × 0.25 / 100 × 100 = 2.5% - Axis Magnus: 12 EDGE reward miles per ₹200, 1 EDGE mile = ₹1 when redeemed against flight bookings. Effective rate: 12 × 1 / 200 × 100 = 6%
The redemption trap
Most cards offer multiple redemption options with wildly different point valuations:
- Travel (flight/hotel bookings): Highest value, often 0.75–1 rupee per point
- Statement credit: Medium value, often 0.5 rupee per point
- Gift vouchers: Variable, often worse than statement credit
- Bank's own redemption catalog: Almost always the worst value — banks deliberately price their catalog redemptions poorly to absorb unredeemed points
Always check the value across redemption categories before accumulating large point balances. The "best" redemption method can be worth 3–4× the worst method for the same points.
Points expiry: the silent wealth destroyer
Most bank reward points expire 2–3 years from the date of earning. Unclaimed points are pure profit for the bank. Audit your reward points balances once a year and redeem strategically. Set a calendar reminder 6 months before expiry to redeem or plan a redemption.
Premium miles cards: when the math justifies the fee
For frequent flyers, premium travel cards (Axis Magnus, HDFC Infinia, ICICI Emeralde) offer 5–8% effective return on spends through airline miles — but only if you regularly fly and can use the miles efficiently. The annual fee of ₹5,000–₹12,500 is justified only at high monthly spend volumes (typically ₹1 lakh+/month).