5 Ways Credit Card Points Were Built To Confuse You
If you’re planning on paying for your next holiday with points, read this first.
You’ve gotten all fired up because your new credit card is going to take you places – literally! All you have to do is charge your groceries, petrol and everything else in between and, if your calculations are correct, you’ll have enough points to pay your way to Halong Bay!
Except. The fine print. Such a pain.
Compound that with reward tiers, qualifiers and disqualifiers. And you’re as far from your holiday in points as you are in actual physical kilometres!
But first, do you know what credit card points are?
In general, credit card points are rewards that a user earns while using specific credit cards. ‘Points’ is the common term used, however it may also take the form of miles or cashback, depending on the provider.
One point from one card is rarely the same as one point from another card. For instance, to redeem a RM100 Agoda e-voucher, Maybank (58,000), CIMB (43,600), and HSBC (30,000) (among a slew of other banks) currently list different point requirements respectively.
Therefore, it is the value of one point from one card that is rarely the same as one point from another, making credit card comparison (and their rewards) a tricky process.
So before you count on your redemption blessings before they hatch, here are a few of those hidden clauses you should note:
1. A case of new better than old
Cards often include a clause or two to minimise your rewards but the most important one is the “Introductory offer”. Your first months as a card-holding member might earn you more rewards than after – maybe up to two times more. Once you’re over that hill, however, the card kicks back to its regular rates.
2. Credit cards are like a good type of stalkers
They track everything you’ve spent whether that’s on travel, restaurants, petrol, movies, groceries or shopping. Now they’re using that data to help – or hurt – your rewards. Some cards will reward you with up to 3% cash rebates on shopping but that may drop to as low as 0.25% if it’s on groceries.
Each card is different. Make sure to read up on the category spend so that you are matching up the right spend with the right card.
3. A dollar isn’t worth a dollar anymore
And that’s true too in the credit card world. One HSBC Reward Point isn’t quite the same value as an OCBC$ or even a UNI$. Each bank has its own – complicated – rewards calculator. And when you stack up clause over clause, it becomes an exercise of extreme patience to compare cards against each other.
A comparison engine like GoBear’s equals the rewards so you can immediately tell dollar-for-dollar (or Ringgit for Ringgit) how much rewards you’ll receive.
4. Overachievers won’t benefit here
Cap limits kick in when you’ve spent on your card - too little or too much - but won’t earn your rewards.
This happens in two situations: when you use a card that only starts rewarding once you’ve spent over a certain amount. Or when it stops rewarding you once you’ve hit the ceiling limits for spend. These can be reviewed monthly, quarterly even annually.
Know the cap limits so you can cut off spending when the card stops rewarding you.
5. Where you spend matters
Some cards pay more if you shop at designated stores. Some may have high rebates for online shopping – which is great if that’s all you ever do.
Even the day of the week matters in a clause. New cards are rewarding weekend spend more than weekday ones with a difference of as much as 2% cashback.
3 top tips to maximise your credit card points
1. Transfer your unused points
Some points do expire. Before you apply for a credit card that keeps preaching about how you’ll be enjoying luxuries and privileges when you swipe their card, do find out if there’s an expiration date for the points earned. Three years is a common validity period, and grace periods are highly uncommon.
If you do approach an expiration date with a bucketload of unused points, consider transferring or converting them to another program to be used.
For example, if you’re a Hong Leong Bank credit cardholder, you can convert your Hong Leong Rewards Points to AirAsia BIG Points. Likewise, your CIMB Bonus Points can also be used to redeem Malaysia Airlines Enrich Miles.
Not only will such air miles redemption programmes help nudge you towards your planned vacation, but also ensures that your credit card points do not go to waste!
2. Stay on the good side of your credit card provider
In order to be eligible to redeem (or even earn) credit card rewards points, you do need to comply with several terms and conditions as set by your provider.
These rules might differ from one company to another, but it generally requires you to be in “good standing”:
- You need to be operating within your credit card limit
- You are not overdue or defaulting on your payments
3. Remember which card to use – there are special deals and exemptions!
The best and fastest way to earn points (and cash back) is to use your credit cards to pay for all your expenses. Sounds a bit risqué to some of us, but not unheard of. If used irresponsibly, it can get ugly real fast.
However, more importantly, be sure to pull out the right card for the purchases you’re making to maximise the points that you can earn. Get to know which card you have in your wallet offers more points for the category of purchases you’re making.
Remember that from time to time, certain card transactions or payments might not earn you points. Maybank recently announced that any reload to third-party e-wallets using Maybank cards would no longer entitle the cardholder to any rewards or cashback.
On the other hand, there are promotional periods where you are entitled to earn double the amount of reward points for the same spend. Buying a big ticket item – which offers you twice as many points – can easily pad up your points total in your rewards program.
Get organised and maintain a spreadsheet (or any method you deem efficient and easy-to-use) to keep track of the cards you use for your expenses and the points accrued.
Whether you're applying for your first credit card or even a second, take a few precious minutes to find out what kind of rewards and incentives that you want out of your credit card points. While you're at it, it's not a bad time to see where your credit scores stand as well.