Our Terms & Conditions | Our Privacy Policy
Why banks offer up to 50X reward points on credit card spends on their loyalty portals
Major banks aim to build loyalty by linking their broader relationship with their most desirable credit cards. They also offer loyalty perks, trying to keep you engaged by giving extra points when you shop through their loyalty portal for anything under the sun. And this is the part that many people often overlook, as it turbocharges their rewards accumulation journey.
Bulk your rewards
Many years ago, HDFC Bank took the first step by launching a loyalty portal for its credit and debit card users, called HDFC Bank SmartBuy. This portal lets card members earn bonus points for select transactions. If you book flight tickets on this website, you can earn five times the regular points for your flight bookings (25 points for every Rs.150 spent). On hotel bookings, you can earn up to 10 times the regular points (50 points for every `150 spent). You can also earn points on shopping via the portal. Buying medicines through PharmEasy (when clicked through the site) earns you 10 times the normal points, and Myntra gives you 5 times the points.
At a value of Rs.1 per point for the HDFC Bank Infinia and Diners Club Black credit cards, that amounts to up to 33% points earned on spending via the portal. Each card has a cap. The most you can earn is 15,000 points per month on the Infinia, the bank’s top-tier card. Points earned this way can be transferred to hotel or airline loyalty programmes or used as cash to redeem for air tickets or hotel stays. On debit cards and some cash-back cards, you can earn some money back instead of points.
American Express has two such offerings. The first, which is similar to HDFC Bank SmartBuy, is called American Express Rewards Multiplier. American Express India cardholders can use this portal to book travel, buy electronics, jewellery, and more, earn 5X Membership Rewards points by swiping the Amex Platinum Metal or Gold Charge card, as well as lower multiples on other Amex cards. However, American Express takes a much longer time (up to 120 days) to credit points compared to HDFC Bank SmartBuy.
The other American Express programme is Rewards Xcelerator. Here, the company has tied up with select lifestyle brands to offer 10-20 times the usual points when you shop online with your American Express Platinum or Centurion card. Brands include Bvlgari, Air India, Tata Cliq, Kama Ayurveda, among others. If you have an American Express Platinum Metal Card, it currently has the most lucrative option to book Air India tickets on the airline’s website, where you can earn 2,500 Membership Rewards points for a Rs.10,000 spend (equivalent to 1,250 miles in most of Air India’s transfer partners).
Axis Bank offers a range of lifestyle and travel cards and also acquired Citi’s retail banking business in India. It has TravelEDGE for a few years now, where, for select credit cards, you can earn five times the usual Axis Bank EDGE Rewards points for booking flights and hotels. Similarly, on its GrabDeals portal, you can get 5X EDGE Rewards.
Make sure you swipe right
Newer players more aggressive
Newer entrants are becoming more aggressive as they realise that they must offer more to gain wallet share. HSBC, which is revamping its card portfolio in India, has just launched Travel With Points, which allows you to book travel through the HSBC India app. When you go through this microsite, you can earn up to six times the usual points on flights and 12 times on hotel bookings.
For HSBC Premier, the group’s premium offering, the top-tier HSBC card is publicly available; this means you can earn 18 points per Rs.100 spent on booking flights via this microsite. You can either transfer these points to loyalty programme partners or use them at a value of Rs.1 to redeem on future flights or hotels with HSBC, using the same site.
IDFC First Bank has integrated its accelerator within its app instead of its website. For the Mayura credit card, it offers 30X points on flights and 50X points on hotels, which means you can earn points worth up to 18% of the transaction value when booking a hotel.
ICICI Bank, which was late to the party, launched the iShop for its card members earlier this year, where you can earn up to six times the normal points for flights and 12 times for hotels.
With all card portals, the objective is the same: lifestyle shopping and travel are among the highest-margin categories, and frequent bookings here serve as a feedback loop to keep customers engaged with the bank, rather than having them sign up for the card and then forget about it.
With the rewards boost, banks are hoping not just to keep their high net-worth individuals (HNIs) and mass affluent customers happy and engaged, but also to make a neat profit on them, given that their portals have a slightly higher fare compared to booking directly with the airline or hotels. Customers look at the higher rewards they earn and, hence, tend to look the other way when comparison shopping. The strategy has been successful for global banks such as JPMorgan Chase and American Express in the US, and there is no reason to believe it will not also start to work for them in India.
The author is founder and editor, livefromalounge.com
(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)
Images are for reference only.Images and contents gathered automatic from google or 3rd party sources.All rights on the images and contents are with their legal original owners.
Aggregated From –
Comments are closed.