How to make your credit card work for you?

Credit card users in India have jumped by 70% since the COVID pandemic and this is only expected to grow as income levels rise.
 

Many people often use credit cards to just pay their bills and are not even aware that they can get so much out of them that it justifies keeping up with their mailers, annual fee reminders and “payment due” alerts all so often.
 

But to get there you will have to spend some of your quality time identifying the right card based on your spending and thereafter - preferences for burning your points.
 

You may, for example, like business class travel but someone may prefer a luxury hotel stay. You may like the touch of an Apple iPhone but someone else may prefer to get a Tanishq voucher and buy jewellery for the points earned.
 

It all depends on you and your family's needs.
 

Therefore, it is important to start by understanding your credit card very well.  
For example, an American Express Membership Rewards card gives you 1000 bonus points for swiping Rs 1500 four times a month besides giving 1 point for every Rs 50 spent. Not to forget you get another 1000 bonus points if you spend a total of Rs 20,000 in a calendar month.
 

After you have reached 18000 points you can redeem these for a Flipkart or Amazon voucher worth Rs 6000 or a Taj Hotels voucher worth Rs 9000.
 

And if you can wait a little longer and let 24000 points accumulate you can get a Taj Voucher worth Rs 14,000 or a Flipkart / Amazon voucher of Rs 8000 or a Tanishq diamond jewellery voucher worth Rs 9000.
 

Many, however, miss out on benefitting from this because they will hardly have the time to look for the "Gold Collection" tab which is often not easy and will not be the first option thrown up when you try to redeem on the Amex website or app. That miss may hurt you because you end up paying around Rs 4500 in annual fees for this card.
 

On the other hand, if you take the American Express Platinum Travel card with nearly the same annual fee you get 15,000 points for spending Rs 1.9 lakh in a year which is worth Rs 4500 on Flipkart. If you spend Rs 4 lakhs then you get another 25,000 points worth Rs 7500 on Flipkart. You will also get a Rs 10,000 voucher for usage at the Taj Group when you spend Rs 4 lakh. Besides, the card gives you get 8 complimentary airport lounge visits per year. 
 

But you have to make the right choice – do you travel and spend a lot? If not, then the first card may work well for you because airport lounges are already available on most debit cards.
 

For those flying with a lot of baggage or with elderly parents travelling to meet their children on long-haul flights, you can train your eyes on the Axis Magnus card, with an annual fee of over Rs 12,000 that offers “meet and greet service”. 
 

This gives you a porter and a smooth entry or exit out of the airport. The card allows this service up to eight times a year. Given that Delhi Airport charges Rs 2600-4500 for a similar service when you are travelling domestically and Rs 4000-6500 when flying internationally, the card would be worth the price tag.
 

Always read the fine print of your credit cards carefully. Your SBI Air India co-branded miles card, for example, may offer you the luxury of not just traveling on Air India but because Air India is a member of the largest airline alliance called Star Alliance you can redeem those points to fly on most of the two dozen airlines part of the alliance including Turkish Airlines, Singapore Airlines, Lufthansa, and United.
 

Most premium credit cards come with hefty annual fees but often if you bargain with the firm at the time of renewal these fees will be waived. Typically, credit cards do this when you reach a certain threshold of spending every year but also bend backwards to retain customers.
 

Remember credit cards in India have become a cut-throat business even though only around 3% of the people – around 77 million or just about the size of Germany’s entire population - use them. 
 

Credit card users in India jumped by 70% between 2020 and now despite the pandemic and the economic contraction that followed but there is tough competition to gain market share. HDFC Bank has a 20% share of the Indian market but others are not behind - SBI Cards, ICICI Bank and Axis Bank have 19%, 17% and 14% market share as of August 2023.
 

To get the most from your card you will have to also keep only two or three cards and concentrate spending on those cards based on their features – an American Express swipe at a non-HPCL petrol station, for example, will cost you additional fees. Many credit cards give spends-based bonus points which can make or break your return on the card especially if you are paying hefty annual fees.
 

One also needs to choose credit card firms that are more lenient with customers. For example, some global firms often waive the late-payment fees on request while others will not even give a patient hearing. Users should also make credit card bill payments from platforms that have no hidden fees. Paytm, which earlier used to give cashback for making credit card bill payments, has instead started charging a “platform fee”. Using net banking or apps like Cred, which offers points to pay your bills but asks for access to your email data, is a better choice for now.
 

Those who use a lot of credit cards should also keep an eye out for offers from their credit card companies like a hawk. Some offer bonus points if you take a no-fee supplementary card. Similarly, they will offer vouchers or accelerated points for shopping during a certain month but you can only get those points if you enroll in the promotion when that offer hits your inbox.
 

Clearly, if you want your credit card to work for you, you have to sweat out a little bit too.

Some of the popular premium credit cards in India include American Express Platinum, HDFC Bank Infinia, Axis Bank Magnus, SBI Aurum and ICICI Bank Emerald Private Metal.

Most of these cards are meant for high spenders because they come with sizeable annual fees. Amex Platinum for example comes with a Rs 60,000 fee but offers access to premium Amex airport lounges, Rs 45,000 worth of Taj vouchers and several other travel and dining benefits.

The same is true for Infinia and Magnus which cost Rs 12500, Aurum which comes for Rs 9999, and Emerald at Rs 12499.

Some of them are by invite only and are also based on your net relationship value with the bank or in other words your fixed deposits, mutual funds holdings etc.

The most premium credit card, of course, is the Amex Centurion or the "Black Card" as it is widely known which is given to very few and costs an astonishing Rs 2.5 lakh annually.

BOX: What can you do with your premium credit card?

Lounge access at premium airport lounges, free hotel and air ticket upgrades, and baggage and travel insurance

Concierge services for your travel bookings, hotel reservations, entertainment booking arrangements, and help to pass through airports

Access to Michelin-starred restaurants and exclusive fine-dining establishments

Rewards and points for spending, often in the form of airline miles

Air accident insurance cover, overseas medical insurance cover, travel insurance cover, and more.