A rewards credit card lets you earn points when you use your credit card. This is a great way to get some extra benefits from your expenses. Different rewards cards offer different benefits. Some are more focused on a specific segment like overseas travel, while some are focused on everyday spending. It's important to choose a card that is suitable for your lifestyle.
The credit card reward points that you earn can be redeemed at a range of merchants and airlines, for things like shopping, dining and flights. They can also be used for discounts at local hotels or supermarkets.
While credit card reward points can be a smart way to benefit from your spending, it's important to always spend within your means and understand exactly how the reward programme works.
You can normally earn points every time you use your card. Some programmes offer extra incentives like bonus rewards when you spend in certain categories. Some rewards programmes allow you to earn unlimited credit card rewards points, but others might limit the amount you can earn with a maximum monthly cap.
You can redeem rewards points within the bank's nominated merchant network, or you could also convert them to air miles.
However most programmes have a minimum points requirement you need to earn before you can redeem anything. It's also important to know when and how your points expire. Normally this is indicated in your credit card statement, where you can also keep a track of all your earned, redeemed and expired points.
Before getting a credit card you should make sure that it will give you great value based on your normal spending patterns.
Some rewards cards also come with annual fees. So you should consider whether the programme is still a good value for you, after the fees are included.
Most importantly, you need to use your credit card responsibly. Before taking a reward credit card you want to be confident you'll be able to repay your balance in full each month and also can afford to pay any annual fee.
This document is issued by HSBC, Sri Lanka and is intended for reference and illustrative purposes only. It does not constitute an offer or advice for you to purchase from or otherwise enter into a transaction with HSBC.
Please note you should make your own independent assessment prior to opting for any product or using the product.