Credit card reward points expiring? Why you should avoid unnecessary spending
During the festive season, credit card reward points can help cardholders save money on e-commerce purchases, travel, everyday spending and other expenses.
However, when these points approach their expiry date, credit cardholders may feel pressured to redeem them before they lose their value. This raises an important question: Should you make a purchase simply to avoid losing your rewards? How should you handle expiring points, and what strategy should you follow?
The answer depends on the available redemption options, the value of the points, and an individual’s budget. Spending more than planned to redeem expiring rewards can strain finances and potentially affect a person’s credit profile if it leads to higher outstanding balances or missed payments. It can also defeat the very purpose of earning reward points.
Credit card issuers offer reward points, add-on services, promotional offers and other benefits to enhance the credit card experience. Cardholders should use these benefits to their advantage rather than feel compelled to redeem every point, regardless of whether doing so makes financial sense.
Check expiry dates and redemption options
Before deciding what to do with expiring points, check your credit card issuer’s terms and conditions. Review the validity period, redemption rules, available options and any restrictions. Depending on the card, points may be redeemable for merchandise, vouchers, bookings or statement credits.
Kaushik Chatterjee, founder and CEO of LendingPlate, explained, “Credit card reward points should encourage smarter spending, not unnecessary purchases. Consumers should evaluate the actual value of their points, available redemption options and expiry dates before making a decision. If redeeming points means spending more than planned, it may be better to let them expire than compromise their budget. The key is to use rewards strategically, without letting them dictate spending habits.”
Prudent credit card users should compare the value of different redemption options rather than assume that every point is worth the same. If a suitable redemption option is available without requiring additional spending, redeeming the points before they expire may make financial sense.
Avoid unnecessary purchases to save rewards
The fear of losing accumulated points and rewards can encourage cardholders to buy products or services they neither need nor planned to purchase. Such spending can backfire, potentially outweighing the benefits of the rewards, particularly if it increases the outstanding balance on a credit card.
Shakti Shekhawat, business head at BharatLoan, said, “Reward points can help consumers save money when used wisely, but chasing them can lead to unnecessary purchases. Consumers should check expiry dates, compare redemption options and understand any applicable restrictions. If using the points requires additional spending, they should consider whether the purchase fits their budget and serves a genuine need rather than making decisions out of fear of losing the rewards.”
Ultimately, credit card rewards should complement planned spending, not drive it. Strategic planning is key. Redeem expiring points when you can do so sensibly, but do not stretch your budget or take on additional debt just to avoid losing them. Sometimes, letting a few points expire can be the more financially prudent choice.
Disclaimer: This article is for general information only and should not be considered financial advice. Credit card users should review their card issuer’s terms and conditions and assess their individual financial circumstances before making redemption or spending decisions.
