Best Rewards credit cards

Rewards credit cards pay points rather than cash, and the points are worth whatever the issuer's catalogue says — commonly about Rs. 0.25 each. Six rewards cards are tracked here, with annual fees from nil to Rs. 499 and earn rates from 2 to 10 points per Rs. 100.

That difference in point value is why a rewards card and a cashback card cannot be compared on the headline number alone: 10 points per Rs. 100 at Rs. 0.25 a point is 2.5% back, not 10%.

Four things, in this order:

Two of the six cost nothing to hold. The other four are effectively free once you cross their waiver, which is Rs. 50,000 a year on the Kotak and YES Bank cards — about Rs. 4,200 a month.

Convert before you choose: at Rs. 0.25 a point, 10 points per Rs. 100 is 2.5% back and 2 points is 0.5%. Against a flat 1.5% cashback card, only the accelerated category wins.

SBM Novio and HSBC RuPay Platinum carry no joining or annual fee at all, so every point they earn is profit.

The Rs. 499 cards pay for themselves at modest spending. At 2.5% value back, a Rs. 499 fee is covered by about Rs. 20,000 of accelerated-category spending in the year — and all four also reverse the fee entirely once annual spends reach Rs. 50,000 or Rs. 1,00,000.

What kills the maths is holding a fee card for a category you do not spend in. A travel-accelerated card used for groceries earns the base rate and still charges the fee.

Every rewards card here excludes some of the biggest lines in a household budget:

Points also expire — usually 24 to 36 months after they are earned. A card earning 10 points per Rs. 100 that you never redeem pays nothing at all.

If you would rather have money off the statement than a catalogue, compare the cashback category instead, or price both against your own spending with the card value calculator.