While going through your credit card statement, you must have come across certain transactions that have not earned any reward points. These may be transactions from excluded categories or the transaction amount may be lower than the minimum spend required to earn reward points.
Banks require credit card transactions to be of a minimum amount to earn reward points. In this article, we will understand the minimum amount required to be spent to earn one reward point and how it affects your reward rate.
Minimum amount required to be spent to earn reward points
Each bank can specify the minimum amount required to be spent on their credit card to earn reward points. The minimum amount may range from Rs. 50 to Rs. 200.
For example, American Express has one of the lowest requirements for minimum spends required to earn reward points on their credit cards. An American Express credit cardholder earns 1 Membership Rewards (MR) point for every Rs. 50 spent.
Most banks require credit cardholders to spend a minimum of Rs. 100 to earn reward points. For example, BOB (Bank of Baroda) Cards require credit cardholders to spend a minimum of Rs. 100 to earn reward points.
Some banks require credit cardholders to spend a minimum of Rs. 150 to earn reward points. For example, HDFC Bank requires credit cardholders to spend a minimum Rs. 150 to earn reward points.
Lastly, some banks required credit cardholders to spend a minimum of Rs. 200 on some of their cards to earn reward points. For example, Axis Bank requires Magnus Credit Card holders to spend a minimum Rs. 200 to earn reward points.
So, the minimum spend to earn reward points on a credit card transaction can vary between Rs. 50 to Rs. 200. If the transaction amount is below the minimum amount, you will not earn reward points for that transaction. So, check the credit card features and benefit section on the bank website to understand the minimum amount required to be spent to earn reward points.
Minimum spends vary among cards within the bank
Within the bank credit card portfolio, different cards may have different minimum spends for earning reward points. For example, earlier we saw that Axis Bank requires Magnus Credit Card holders to spend a minimum of Rs. 200 to earn reward points. However, Axis Bank Atlas Credit Card holders are required to spend a minimum of Rs. 100 to earn reward points.
Similarly, ICICI Bank requires Emeralde Private Metal Credit Card holders to spend Rs. 200 to earn reward points. However, ICICI Bank Sapphiro Credit Card holders need to spend Rs. 100 to earn reward points.
Reward points are awarded for minimum spend and its multiples
A cardholder earns reward points for minimum spends and its multiples. For example, the HSBC TravelOne Credit Card holder earns 2 reward points for every Rs. 100 spent. In this case, the cardholder will earn reward points for transactions of Rs. 100 and its multiples. For example, if the cardholder spends Rs. 225, they will earn 4 reward points for Rs. 200 spent, and the remaining Rs. 25 will not earn any reward points.
Small spends count towards milestones
In the earlier section, we saw how if the transaction amount is lower than the minimum spend requirement, you will not earn reward points for that transaction. We also saw how reward points are awarded for the minimum amount spent and its multiples. Any excess amount over the multiple doesn’t earn reward points. However, these amounts that don’t earn reward points count towards the following.
Milestone spends
Some credit cards have milestone benefits. When the cardholder achieves the milestone spend, the milestone benefit is awarded. For example, the American Express Platinum Travel Credit Card has two milestones. On achieving spends of Rs. 1.9 lakhs in a card membership year, the cardholder gets 15,000 bonus reward points. Similarly, on achieving spends of Rs. 4 lakhs in a card membership year, the cardholder gets a bonus of 25,000 reward points and a Rs. 10,000 Taj vouchers.
The spends discussed earlier, that do not earn reward points, count towards the milestone spends and help the cardholder reach the milestone faster.
Annual fee waiver
Most credit cards waive the annual fee on achieving specified spends in the previous year. For example, the renewal fee for the HDFC Bank Diners Club Black Metal Credit Card is waived on spending Rs. 8 lakhs in the previous year.
The spends discussed earlier, that do not earn reward points, count towards the calculation of the total spent during the previous year for waiver of renewal fee.
Similarly, the spends count towards calculating the amount for spend-based offers and unlocking complimentary airport lounge access. For example, HDFC Bank sends spend-based offers to credit cardholders from time to time. When the cardholder achieves the specified spend between the specified dates, they get gift vouchers of specified brands for specified amounts.
These days, most banks require credit cardholders to spend a specified amount in a month/quarter to unlock airport lounge access in the subsequent month/quarter.
To conclude, banks require credit cardholders to spend a minimum of Rs. 50 to Rs. 200 to earn reward points. Further, the reward points are awarded for amounts in multiples of the minimum amount. The amount in excess of the multiple doesn’t earn reward points.
However, these amounts, which don’t earn reward points, count towards the calculation of milestone spends, annual fee waiver, spend-based offers, unlocking complimentary airport lounge access, etc.
Gopal Gidwani is a freelance personal finance content writer with 15+ years of experience. He can be reached at LinkedIn.
