Now open a savings account and earn reward points
Find
out about the eligibility and types of transactions you need to conduct before
redeeming reward points.
The big
spenders are expectedly pampered, with credit card issuers and merchant outlets
showering them with discounts and freebies. In recent months, however, two
private-sector majors—ICICI Bank and Axis Bank—have expanded their scope of
offerings to cover the savers as well. The banks are promising to reward
customers having savings bank accounts with loyalty points for carrying out a
variety of transactions. While a plethora of freebies is being offered on a
platter, on the flip side, there is the tedium of keeping tabs on the reward
points and redeeming them. If you want to make the most of the loyalty
programmes, you need to understand how they work and avoid the peril of
over-spending.
How does it work?
The savings account holders in banks that offer reward point programmes do not have to make an effort to sign up for it since they are enrolled by default as soon as they open an account. “Our MySavings Rewards Program and credit card programmes are designed to reward and encourage customers to carry out more transactions with us. These help them accumulate points for almost every transaction,” says Rajiv Sabharwal, executive director, ICICI Bank.
The transactions include simple ones like activating Internet or mobile banking, opening a recurring deposit account, updating your mobile number through an ATM, or registering for an e-statement. Then there are more complex activities like taking a loan or paying utility bills using the online payment platform, even making an EMI (equated monthly instalment) payment on time.
To be eligible for the reward points, the retail customer needs to fulfil certain conditions. For instance, in the case of ICICI Bank, the account holders are required to maintain a minimum monthly average balance of 15,000, while the NRI customers are not eligible at all. Similarly, you become eligible for the Axis Bank’s eDGE Loyalty Rewards Points programme when you open a savings account, use its debit or credit cards, and online channels of shopping. However, to qualify, you should have no outstanding dues and the eligibility criteria are open to review from time to time.
The public-sector banks, however, are not rewarding their savings account holders and have largely limited themselves to card spends for now. “Banks are increasingly using loyalty programmes to induce consumers to use debit/credit cards, as well as Internet and mobile banking. The objective is to incentivise them to use their cards instead of withdrawing cash from the branch or ATM. Once consumers have accumulated points, they can redeem these in return for free goods or services,” says Bijaei Jayaraj, CEO, Loylty Rewardz, which manages loyalty programmes for several PSU banks, including the State Bank of India.
How to redeem reward points
You earn different reward points depending on the kind of transaction and card type. So while you earn 1 point for every 100 you spend online through Net or mobile banking with the ICICI Bank, you can get 100 points for just activating the Net or mobile banking. In the case of Axis Bank, you can earn 25 points for ordering a new chequebook online or via an ATM, but get 500 points one time when you open a Wealth or Privee account.
How do you keep track of your reward points? Since the ICICI Bank’s points are managed by PAYBACK, the multi-brand loyalty programme, you can either get in touch with its contact centre/website, through the bank’s website, or even via your account statement. To redeem points, you have to choose from the list of products or services up on the bank’s website and call up the bank to communicate your decision. You can also redeem the points directly through the Internet channel by clicking on ‘redeem’ at the bank site. You’ll be taken to the PAYBACK website, where you can pick your product/service. You can also shop at PAYBACK’s online partner sites, or directly at specified merchant outlets by swiping your card. As for the Axis Bank, you can pick from 500 rewards from a range of lifestyle and entertainment products and services, provided that you have accumulated a minimum of 300 points.
Rewards on card spends
A high-end credit card is bound to offer a better spend-to-reward point conversion ratio compared with a no-frills card. However, such cards typically entail a huge membership fee. Plain-vanilla cards may not levy a big fee, but could require you to make substantial purchases to be eligible for worthwhile rewards. Availing of cash-back offers is relatively easy as you have to simply swipe your card at the merchant outlets or make an online purchase and the applicable amount
will either be credited to your account or
the discount factored into the bill. While both cash-back and reward point programmes seem attractive, it requires you to choose your bank or card, as well as rewards, carefully. “So, if you watch movies or dine out often,
pick a lifestyle card that offers additional points on such spending. If
you are a frequent flier, look for a card that converts points into miles and entitles you to concessional fares,” says Harsh Roongta, CEO of Roongta Securities. Another popular category is the one that offers points on refuelling.
On the other hand, cards or savings accounts that entitle you to, say, 5% cash-back on payment of utility bills will be useful for all segments as it is an unavoidable expense.
Ensure that you exercise caution while choosing cards for the cash-back benefits as banks and card issuers routinely revise their offerings. Besides, your spending pattern should justify the membership fee. The last thing you should do is to sign up for a card only to avail of the reward points or cashback offers. Moreover, your bank or card issuer could levy an ad-hoc handling fee for delivering your product at your doorstep, reducing the actual value of the benefit.
Many credit card users believe that hoarding a large number of points for months or years will help them buy an expensive TV or a high-end refrigerator. However, you need to ascertain whether the bank or card issuer has specified a validity period for redeeming the points. Otherwise, you may end up waiting for months only to find out that the offer period has expired.
5 questions to ask before you sign up for reward points
• Is it a limited period offer?
• Does your spending pattern justify the annual fee?
• Is it restricted to transactions with select merchants?
• Does it exclude any spending categories such as the one on fuel?
• For what can you redeem your points?
How does it work?
The savings account holders in banks that offer reward point programmes do not have to make an effort to sign up for it since they are enrolled by default as soon as they open an account. “Our MySavings Rewards Program and credit card programmes are designed to reward and encourage customers to carry out more transactions with us. These help them accumulate points for almost every transaction,” says Rajiv Sabharwal, executive director, ICICI Bank.
The transactions include simple ones like activating Internet or mobile banking, opening a recurring deposit account, updating your mobile number through an ATM, or registering for an e-statement. Then there are more complex activities like taking a loan or paying utility bills using the online payment platform, even making an EMI (equated monthly instalment) payment on time.
To be eligible for the reward points, the retail customer needs to fulfil certain conditions. For instance, in the case of ICICI Bank, the account holders are required to maintain a minimum monthly average balance of 15,000, while the NRI customers are not eligible at all. Similarly, you become eligible for the Axis Bank’s eDGE Loyalty Rewards Points programme when you open a savings account, use its debit or credit cards, and online channels of shopping. However, to qualify, you should have no outstanding dues and the eligibility criteria are open to review from time to time.
The public-sector banks, however, are not rewarding their savings account holders and have largely limited themselves to card spends for now. “Banks are increasingly using loyalty programmes to induce consumers to use debit/credit cards, as well as Internet and mobile banking. The objective is to incentivise them to use their cards instead of withdrawing cash from the branch or ATM. Once consumers have accumulated points, they can redeem these in return for free goods or services,” says Bijaei Jayaraj, CEO, Loylty Rewardz, which manages loyalty programmes for several PSU banks, including the State Bank of India.
How to redeem reward points
You earn different reward points depending on the kind of transaction and card type. So while you earn 1 point for every 100 you spend online through Net or mobile banking with the ICICI Bank, you can get 100 points for just activating the Net or mobile banking. In the case of Axis Bank, you can earn 25 points for ordering a new chequebook online or via an ATM, but get 500 points one time when you open a Wealth or Privee account.
How do you keep track of your reward points? Since the ICICI Bank’s points are managed by PAYBACK, the multi-brand loyalty programme, you can either get in touch with its contact centre/website, through the bank’s website, or even via your account statement. To redeem points, you have to choose from the list of products or services up on the bank’s website and call up the bank to communicate your decision. You can also redeem the points directly through the Internet channel by clicking on ‘redeem’ at the bank site. You’ll be taken to the PAYBACK website, where you can pick your product/service. You can also shop at PAYBACK’s online partner sites, or directly at specified merchant outlets by swiping your card. As for the Axis Bank, you can pick from 500 rewards from a range of lifestyle and entertainment products and services, provided that you have accumulated a minimum of 300 points.
Rewards on card spends
A high-end credit card is bound to offer a better spend-to-reward point conversion ratio compared with a no-frills card. However, such cards typically entail a huge membership fee. Plain-vanilla cards may not levy a big fee, but could require you to make substantial purchases to be eligible for worthwhile rewards. Availing of cash-back offers is relatively easy as you have to simply swipe your card at the merchant outlets or make an online purchase and the applicable amount
will either be credited to your account or
the discount factored into the bill. While both cash-back and reward point programmes seem attractive, it requires you to choose your bank or card, as well as rewards, carefully. “So, if you watch movies or dine out often,
pick a lifestyle card that offers additional points on such spending. If
you are a frequent flier, look for a card that converts points into miles and entitles you to concessional fares,” says Harsh Roongta, CEO of Roongta Securities. Another popular category is the one that offers points on refuelling.
On the other hand, cards or savings accounts that entitle you to, say, 5% cash-back on payment of utility bills will be useful for all segments as it is an unavoidable expense.
Ensure that you exercise caution while choosing cards for the cash-back benefits as banks and card issuers routinely revise their offerings. Besides, your spending pattern should justify the membership fee. The last thing you should do is to sign up for a card only to avail of the reward points or cashback offers. Moreover, your bank or card issuer could levy an ad-hoc handling fee for delivering your product at your doorstep, reducing the actual value of the benefit.
Many credit card users believe that hoarding a large number of points for months or years will help them buy an expensive TV or a high-end refrigerator. However, you need to ascertain whether the bank or card issuer has specified a validity period for redeeming the points. Otherwise, you may end up waiting for months only to find out that the offer period has expired.
5 questions to ask before you sign up for reward points
• Is it a limited period offer?
• Does your spending pattern justify the annual fee?
• Is it restricted to transactions with select merchants?
• Does it exclude any spending categories such as the one on fuel?
• For what can you redeem your points?
PREETI
KULKARNI ETW130617
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