Many card users spend a lot of time picking the right card and earning points, but the real value is unlocked when you redeem them. Experts say the way you use points matters more than how many you collect.
A poorly timed transfer, ignoring taxes or overlooking transfer ratios can reduce the value of your rewards. In some cases, paying cash for a flight and saving your points may actually leave you better off.
Here are five mistakes experts say you should avoid when planning to use credit card rewards for your next holiday.
One of the biggest mistakes is sending points to an airline or hotel loyalty program before you confirm that a seat or room is available. Because transfers are usually irreversible, you could lock your points with no usable award. Ashish Lath, Founder and CEO of SaveSage, advises to transfer only after you have a confirmed booking.
A reward ticket is not always free. Many airline redemptions still require taxes, airport charges and fuel surcharges, which can erode your savings. Also check the transfer ratio before moving points, as different banks convert points at different rates, affecting the value you receive.
Cashback, statement credits and shopping vouchers are convenient but often give lower value per point than airline or hotel transfers. Lath estimates bank portals offer about Rs 0.25 to Rs 1 per point, while transfers can fetch Rs 0.50 to Rs 2 per point or more, depending on the redemption. But if availability is low or cash fares are very cheap, the bank portal may still be the better choice.
Waiting for the perfect redemption can backfire because banks and loyalty programmes can change partners, rates or rules, reducing the value of points that sit idle. Adhil Shetty, CEO of BankBazaar, says it often makes more sense to redeem points periodically, unless you are saving for a specific premium trip. Salila Pande, MD and CEO of SBI Card, reminds customers to view points as a tool for use rather than a savings bucket.
Assuming points always give the best deal is risky. Compare the cash fare, the number of points required, taxes and transfer ratio before each redemption. A Rs 5,000 domestic economy ticket may not give much extra value, but using the same points for a Rs 2 lakh international business‑class flight can significantly improve the value per point. The best redemption is the one that gives the highest value per point, not necessarily the one that uses the most points.
Reward points have no fixed value; they depend on how and when you redeem them. A few extra minutes of planning—checking availability, comparing cash fares, understanding taxes and transfer ratios—can turn an average redemption into a savings of thousands of rupees on your next trip.