Please share meaning of redemption fee.
The reward redemption fee is a charge by the bank when you use reward points. Banks take a small amount each time you redeem reward points. But not every credit card comes with a reward redemption fee.
In my case, I keep saving my reward points and redeem only when the value exceeds at least 4,000.
Just a few days ago, I got a ₹1,250 voucher with 5,000 reward points. In the next statement, I saw ₹49 plus GST as a redemption fee.
If I use the same for small rewards, it will not be beneficial for me. For example, if I claim vouchers worth ₹200 and pay ₹99 as a fee, I will lose half of the value.
Here are some personal tips for you:
- Read the reward redemption fee chart before claiming any reward.
- Save points for higher-value gifts or vouchers so the fee feels worth it.
- If you are claiming a gift voucher, carefully read the instructions on its usage.
Another important thing is that credit cards offer different values per reward point depending on the type of reward you choose.
For example, my credit card offers ₹0.20 reward points for e-commerce gift cards, but for OTT vouchers, it offers ₹0.30 against every point.
In case reward points are going to expire soon, do not think too much. Just redeem the best option for you, as you cannot get them back after the expiry date.