Why You Need the Best Reward Points Credit Card
My friend, every time you swipe your card for groceries, fuel, school fees, or electricity bills, you are leaving free money on the table. That free money is hiding inside reward points. And the best reward points credit card is the one that lets you redeem those points for cash or bill payment.
Instead of wasting points on random vouchers, you can use that cash to start or increase your mutual fund SIPs or even do lump sum investments. Think of it like invisible money that quietly builds your future.
How Reward Points Can Build Wealth
Let’s take a very simple example from a middle-class family in India.
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Monthly expense on groceries & essentials: ₹12,000
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Fuel expense: ₹5,000
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Electricity, water, mobile bills: ₹6,000
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Online shopping & entertainment: ₹7,000
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Total monthly card spend: ₹30,000
Now assume your best reward points credit card gives an average 2% cashback equivalent through points.
That means:
₹30,000 × 2% = ₹600 saved per month.
Over a year, that’s ₹7,200.
If you redeem this cash and invest it into a SIP at 12% CAGR, here’s what happens:
| Year | Monthly SIP (₹) | Value After 10 Years (₹) | Value After 20 Years (₹) |
|---|---|---|---|
| 1 | 600 | 1,15,200 | 4,95,000 |
| 2 | 600 | 2,30,400 | 9,90,000 |
| 5 | 600 | 6,91,200 | 24,75,000 |
| 10 | 600 | 13,82,400 | 49,50,000 |
👉 A small ₹600 from reward points can become nearly ₹50 lakh in 20 years.
This is why using the best reward points credit card correctly is like planting trees today for shade tomorrow.
What Makes a Credit Card the Best Reward Points Credit Card?
Redemption Flexibility
The most important factor is whether you can redeem your reward points for cash or bill payment. If not, then your points are just lifestyle discounts, not wealth creators.
Reward Rate
Some cards give you 2 points per ₹100 spent, some 10 points. What matters is how much each point is worth in rupee terms.
Example:
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If 1 point = ₹0.25, then 10 points = ₹2.50.
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On ₹100 spent, that’s 2.5% cashback.
Now compare that to a 6% FD return taxed at 20%. Clearly, the best reward points credit card gives you more effective returns.
Annual Fees vs Benefits
Some cards charge high annual fees like ₹5000 but give free lounge access, joining bonus, or 2–3% guaranteed cashback. If your spending is ₹40,000+ per month, go for premium. If not, stick to lifetime free cards.
Popular Best Reward Points Credit Cards in India
Here’s a simple scrollable table (mobile-friendly) comparing popular options:
| Card Name | Annual Fee | Effective Reward Rate | Best Feature |
|---|---|---|---|
| HDFC Millennia | ₹1000 | 1.5%–5% | Online shopping cashback |
| SBI SimplyCLICK | ₹499 | 1.25%–2.5% | Great for Amazon/Flipkart spends |
| ICICI Amazon Pay Card | Free | 1%–5% | Cashback directly into Amazon Pay balance |
| Axis Ace Credit Card | ₹499 | 2%–5% | Bill payments & Google Pay cashback |
| HDFC Regalia | ₹2500 | 2%–4% | Travel & lifestyle points with cash redemption |
| Axis Magnus | ₹10,000 | 3%+ | Premium perks + strong reward conversion |
👉 Depending on your lifestyle, your best reward points credit card may differ. But always check: Can I redeem points for statement credit?
How to Use Reward Points for Mutual Fund SIPs
Step 1: Track Your Points
Most people don’t even know their balance. Open your credit card app and check it monthly.
Step 2: Redeem for Statement Credit
Forget vouchers and gadgets. Always redeem points for cash or bill payment.
Step 3: Redirect to SIP
As soon as cashback reflects, invest that exact amount into your SIP.
Example:
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Reward redemption: ₹2000
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SIP amount set up: ₹2000 in Nifty 50 Index Fund
That’s it. Simple and powerful.
Common Mistakes to Avoid
Hoarding Points
Don’t wait for years. Some reward points expire in 24 months. Cash them out early and invest.
Choosing Wrong Redemption
A toaster worth ₹2000 in catalog may cost you 10,000 points. Instead, redeem the same points for ₹2500 cash.
Paying Minimum Due
If you revolve credit, you pay 36% interest annually. That kills your reward benefit. Always pay full bill on time.
Middle-Class Friendly Example
Let’s take Ramesh, a 35-year-old working professional with ₹40,000 monthly card spends. He uses the best reward points credit card that gives 2% cashback.
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Reward cash earned = ₹800 per month.
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Annual cashback = ₹9600.
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Invested in SIP at 12% CAGR.
After 20 years, that grows to ₹66 lakh.
Now imagine Ramesh upgrades his SIP by adding his yearly increment also. His reward points + increment SIP together can cross ₹1 crore easily.
Why This Strategy Works for the Middle Class
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No extra burden: You’re not cutting lifestyle, just redirecting invisible money.
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Guilt-free investing: Even if salary is tight, you can still invest.
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Compounding power: ₹500 today can be ₹50,000 tomorrow.
Advanced Hacks for Maximizing Reward Points
H4: Pay All Bills via Credit Card
Electricity, DTH, water, broadband – all should go through card.
H4: Use Credit Card on Insurance Premiums
Many cards give accelerated points here.
H4: Use Wallet Loads (where allowed)
Load Paytm/Amazon wallet with card, then pay expenses. Earn double benefit.
H4: Track Offers & Accelerators
Sometimes banks give 5X or 10X points on partner sites. Use those only if you need.
Final Calculation Example
Here’s a table showing how much wealth you can build just by using the best reward points credit card:
| Monthly Spend (₹) | Reward % | Monthly Cashback (₹) | 20-Year SIP Value @12% CAGR (₹) |
|---|---|---|---|
| 20,000 | 2% | 400 | 33 lakh |
| 30,000 | 2% | 600 | 50 lakh |
| 50,000 | 2% | 1000 | 83 lakh |
| 75,000 | 2% | 1500 | 1.24 crore |
👉 Even without salary increments, just redirecting points into SIP can make you a crorepati.
FAQs on Best Reward Points Credit Card
Q1. Which is the best reward points credit card in India?
It depends on your spending. For online shoppers – HDFC Millennia or SBI SimplyCLICK. For Amazon lovers – ICICI Amazon Pay. For high spenders – Axis Magnus or HDFC Regalia.
Q2. Can I directly invest reward points into mutual funds?
No, but you can redeem them as cash or statement credit and then invest.
Q3. Do reward points expire?
Yes, some expire in 24–36 months. Always redeem regularly.
Q4. Should I go for cashback cards instead of reward points?
Cashback cards are great, but the best reward points credit card often gives higher value if redeemed smartly.
Q5. Is it risky to use credit cards heavily?
Not if you pay bills in full. In fact, heavy usage means more points = more wealth, provided you are disciplined.
Conclusion
My friend, expenses are unavoidable. But what if your expenses start building your assets? That’s the magic of the best reward points credit card. Every rupee spent today plants a tree for tomorrow. Don’t waste reward points on short-lived joys. Redeem them for cash, redirect to SIP, and watch compounding create lakhs for your future.
So the next time you hold your card, don’t see it as a debt trap. See it as a wealth generator in disguise. Because when used wisely, the best reward points credit card can change your financial destiny without you even realizing it.
