Pay with points, transfer them, statement credit - what to do?
Pay with points, transfer them, statement credit - what to do?
When it comes to maximizing the value of your credit card reward points in India, many cardholders face a familiar question — should you pay with points, transfer them to partners, or redeem them for a statement credit? Each of these redemption options comes with its own pros and cons, and the right choice depends on your financial habits, travel preferences, and the type of card you hold. Let’s explore these options in detail to help you make an informed decision.
Every time you use your credit card, you earn points based on the amount you spend. Depending on the card issuer and the category of spending, you might earn anywhere from one to ten points per hundred rupees spent. For instance, premium cards from HDFC, SBI Card, Axis Bank, ICICI Bank, and American Express often reward higher points for travel, dining, and online spending. Over time, these points can accumulate into a valuable pool of rewards — but the key lies in how you redeem them.
The simplest and most common option many people see is “Pay with Points.” This is a feature offered by many Indian banks where you can use your accumulated points directly at partner merchants or while making a purchase online. For example, HDFC Bank’s SmartBuy platform allows you to pay for flights, hotels, and shopping using reward points. Similarly, SBI Card lets you redeem points on its rewards portal for e-vouchers and merchandise. The main advantage of this option is convenience. It’s straightforward, requires no special knowledge of travel programs or conversions, and gives you an immediate sense of savings. However, the downside is that the value you get per point is usually low. For instance, in many Indian credit cards, one reward point is valued at only 20 to 25 paise when redeemed for purchases or shopping vouchers. So, if you redeem 10,000 points, you might get only Rs. 2,000 to Rs. 2,500 worth of value.
If you’re looking for more value, then transferring your points to airline or hotel partners can be a smarter strategy. This option is available mostly on mid-tier to premium credit cards such as HDFC Bank Diners Club Privilege, Axis Bank Atlas, American Express Platinum Travel, or Citi Prestige (before its phase-out). These cards allow you to convert your points into frequent flyer miles with partners like Air India Flying Returns, Singapore Airlines KrisFlyer, or British Airways Executive Club, or into hotel loyalty programs like Marriott Bonvoy. The main advantage here is the potential for higher redemption value. If you use your transferred miles strategically — for example, booking business-class tickets during peak travel seasons — you can get a value of Rs. 1 or even more per point. That’s often three to five times higher than what you’d get by redeeming for merchandise or vouchers.
However, transferring points requires more planning and awareness. You need to keep track of transfer ratios (for example, 1 reward point might equal 1 airline mile or sometimes 2 reward points per mile), transfer time, and any expiry conditions once the miles reach your airline account. You also need to check for availability of reward seats or rooms before transferring. The flexibility of points reduces once they are moved out of your credit card ecosystem. Still, for people who travel frequently or plan vacations using air miles, this option offers unmatched value and a feeling of luxury for far less money.
Now let’s talk about statement credit — another common way to use your points. In this method, you redeem your accumulated points to offset your credit card bill. For instance, if your total outstanding amount is Rs. 10,000 and you redeem 5,000 points (each worth 25 paise), your payable balance might reduce to Rs. 8,750. This is simple and practical, especially if you want to reduce your monthly expenses. Many card issuers, such as HDFC, Axis, and ICICI, offer this redemption feature through their netbanking portals. The convenience factor is high, and it can feel like a small cashback. However, the value per point is again usually lower than other methods. It rarely exceeds 25 to 35 paise per point, making it the least efficient way to redeem from a rewards perspective. Yet for those who prioritize liquidity and don’t want to spend time on planning redemptions, it serves as a useful option.
When deciding between these three redemption routes, the first step is to understand your lifestyle and spending goals. If you’re a frequent traveler or aspire to travel in style, transferring points to airline and hotel partners will give you the best return. But if your spending pattern is more domestic and focused on everyday expenses, then redeeming for shopping or statement credits might suit you better. Also, it’s important to check the fine print of your credit card’s rewards program. Many cards in India, especially entry-level ones, have points that expire after two or three years, while some premium cards offer points that never expire. Losing points due to expiry is one of the most common mistakes cardholders make, so setting reminders to redeem them in time is crucial.
Another factor to consider is the conversion ratio. Different banks have different systems. For example, HDFC Bank’s Infinia and Diners Club Black cards typically offer 1 point = 1 rupee for travel bookings via SmartBuy, making them among the most rewarding. On the other hand, cards like SBI Card Prime or ICICI Bank Rubyx might offer lesser redemption rates. Understanding this helps you calculate your real reward rate — that is, how much benefit you get per rupee spent. For instance, if you earn 3 points per Rs. 150 spent and each point is worth 25 paise, your effective reward rate is 0.5%. But if you transfer those same points and get Rs. 1 of value per point, your reward rate jumps to 2%. That’s a significant difference over time.
Some cardholders even mix strategies. For example, they might transfer points for travel redemptions but use smaller leftover points for statement credits or e-vouchers. This balanced approach ensures that no points go unused while maximizing value for big-ticket redemptions. It’s also smart to keep track of limited-time transfer bonuses. Indian banks occasionally run promotions where transferring points to a partner airline gives you an extra 25% or 50% bonus. Taking advantage of these can stretch your points further.
In conclusion, there is no single “best” way to redeem credit card points in India. Paying with points offers simplicity, transferring them offers maximum value for travelers, and using them for statement credit offers practicality. The right choice depends on how you spend, what you value, and how much effort you’re willing to invest in managing your rewards. What matters most is being intentional — understand the worth of your points, stay alert for expiry, and choose redemptions that align with your lifestyle. Over time, this can turn your everyday credit card spending into real savings or memorable travel experiences, proving that smart reward management is just as important as earning the rewards in the first place.