How to make the most of credit cards during the festive season?

The major e-commerce players have announced festive sales. It is that time of the year when you can get the biggest discount offers on most categories, along with other benefits. You can further enhance your benefits with your credit cards.

When used correctly during the festive season, credit cards can give you benefits like instant discounts, additional benefits with spend-based offers, completion of milestone benefits, annual fee reversal, lounge access during travel, etc. Let us explore how

Instant discounts

During the festive sale, the big e-commerce players have announced tie-ups with various banks to offer instant discounts on debit and credit cards. For example, during its “Great Indian Festival” sale, Amazon is offering a 10% instant discount on SBI debit and credit cards.

Amazon 10% instant discount on SBI credit cards

(Source: Amazon website)

The above table shows how a customer can get a 10% instant discount on SBI credit cards in various categories. The maximum discount on a day is Rs. 1,750, and it resets every day. So, if you avail of the maximum discount on a particular day, you can place another order the next day and avail of the discount again. Apart from this, you can get additional bonus discounts for higher value orders as follows.

Note: The bonus discount is applicable on select products and can be availed only once.

Similarly, for its “The Big Billion Days” sale, Flipkart has tied up with HDFC Bank. The sale offers a 10% instant discount on HDFC Bank debit and credit cards. Myntra has partnered with ICICI Bank, Axis Bank, Kotak Bank, etc., for its “Big Fashion Festival” sale. The sale offers a 10% instant discount on credit cards of these banks.

Spend-based festive offers

Some banks send spend-based offers during the festive seasons. When the cardholder spends the specified amount or more during the specified period, they get additional benefits through bonus reward points, gift vouchers of specified brands, etc.

For example, American Express sends spend-based offers to customers just before the start of the festive season. These are targeted offers sent to selected customers. If you are an American Express credit cardholder, the spend-based festive offer will apply to you if you have received communication (email, SMS, etc.) from American Express. The communication email specifies the amount required to be spent, the duration within which it has to be spent, and the reward you will get on achieving the specified spends.

In September 2024, some of the offers that American Express customers have received include the following.

(Source: www.LiveFromALounge.com)

If you are an American Express cardholder, you may have received an email with your customised offer. The above offer spends have to be completed between 20th September to 10th November 2024. Enrolment for the offer is compulsory.

The above table shows how you can earn an additional reward rate of up to 4%, depending on the offer you have received, and if you enrol and achieve the required spends. The additional reward rate of up to 4% is over and above the base reward points, milestone-based reward points and instant discounts you get based on the American Express card you hold.

Similarly, other banks may send selected customers targeted spend-based offers during the festive season.

Travel-related benefits

Children have a school break during Diwali and Christmas. Many individuals take the much-awaited and deserved family vacation during this period. Many banks come up with travel-related discount/cashback offers on credit cards during this period.

You can avail of travel-related benefits like instant discounts with online travel aggregators (OTAs) like MakeMyTrip, Yatra, EaseMyTrip, etc. The discounts are offered on services like flight, bus, train ticket booking, hotel booking, etc.

Airport lounge access

Some credit cards of some banks offer domestic and international airport lounge access. As discussed in the earlier section, while taking your family vacation, you can have a meal and/or relax at the airport lounge before taking your flight.

In the last few months, some banks have introduced spend-based criteria for lounge access. When you spend a specified amount with the credit card in a month/quarter, you can unlock the lounge access.

For example, you need to spend Rs. 50,000 with your Axis Bank credit cards in the previous three calendar months to get access to domestic airport lounges. The spend-based criteria is waived for Burgundy Private Credit Card, Reserve Credit Card, and Atlas Credit Card.

During the festive season, your regular spends or big-ticket planned spends on your credit card(s) can help you unlock spend-based lounge access. Once unlocked, you can avail of lounge access and enjoy its benefits during travel.

Achieving milestone spends and annual fee reversal

Many people plan big-ticket purchases during the festive season. Some of these include consumer durables, electronics, gadgets, etc. When you make these planned purchases using your credit cards, you can avail some benefits.

These include availing the instant discount, achieving the festive spend-based offer, etc., as discussed in the earlier sections. Apart from these, the other benefits of using credit cards for the planned festive big-ticket purchases include the following:

Achieving the milestone spends on credit cards

Some credit cards give certain benefits for achieving specified milestones during the month/quarter/year. When you achieve these spends with your planned festive season purchases, you will get the milestone benefit.

For example, the American Express Platinum Travel Card has two milestones in a year. When you spend Rs. 1.9 lakhs in a card membership year, you get 15,000 bonus reward points. When you spend Rs. 4 lakhs in a card membership year, you get an additional 25,000 bonus reward points and a Rs. 10,000 Taj vouchers.

Similarly, with the Diners Club Black Metal Edition Credit Card, when you spend Rs. 4 lakhs in a calendar quarter, you get 10,000 bonus reward points.

Waiver of annual fees on achieving the specified spends

Many credit cards waive the annual fee on spending a specified amount in the previous year. For example, the Rs. 10,000 + GST annual fee for Diners Club Black Metal Edition Credit Card is waived on spending Rs. 8 lakhs in the previous year. Your festive season planned spends can help you cover some or a major percentage of the amount required to be spent for the waiver of annual fees.

Enjoy the festive season spend-based benefits with responsibility

During the festive season, banks will shower you with various offers like instant discounts, spend-based festive offers, etc. When you club these offers with milestone spends and annual spends required to get the renewal fee waiver, it will look like a great deal and tempting to go for it.

However, you should go for these credit card offers only when you have genuine, planned spends. Don’t spend just to avail of the offer for the benefits. Also, make sure you pay the entire monthly bill without carrying forward any outstanding balance.

If you carry forward any outstanding balance and pay heavy interest charges of 36% to 45% p.a., the reward points and other benefits will not be worth it. Hence, always make need-based credit card spends and enjoy the festive season offers with responsibility.

Gopal Gidwani is a freelance personal finance content writer with 15+ years of experience. He can be reached at LinkedIn.