Credit cards have become a popular way for Indians to make payments. However, in recent months, many credit card issuers have started excluding important categories such as utility bill, insurance, and rent payments from their reward-earning category list.
Reasons for Exclusion
There are a few reasons why credit card issuers are excluding these categories:
- Misuse: Some individuals misuse credit cards to earn rewards on these categories. For example, they may pay their business utility bills with their personal credit card, or they may purchase high-value insurance policies just to meet credit card milestones and earn rewards.
- High transaction costs: Credit card issuers pay interchange fees to the bank that issued the card used to make a purchase. These fees are higher for certain categories, such as utility bills and insurance.
- Competition: Credit card issuers are competing for market share, and one way to do this is to offer more rewards on certain categories. By excluding certain categories, they can offer higher rewards on other categories.
Impact on Consumers
The exclusion of these categories from reward-earning lists can have a negative impact on consumers. For example, if you pay your rent with a credit card, you will no longer be able to earn rewards on those payments. This can mean that you miss out on valuable points or miles.
What Consumers Can Do
If you are concerned about the exclusion of these categories, there are a few things you can do:
- Shop around: There are still some credit cards that offer rewards on utility bills, insurance, and rent payments. Compare different cards to find one that meets your needs.
- Use a debit card: Debit cards do not typically offer rewards, but they do not have interchange fees. This means that you may be able to save money by using a debit card for certain purchases.
- Pay your bills directly: If you can, pay your bills directly to the biller. This way, you will avoid any fees associated with using a credit card.
The Future of Credit Card Rewards
It is likely that credit card issuers will continue to exclude certain categories from their reward-earning lists in the future. However, there are also some trends that suggest that the future of credit card rewards may be brighter. For example, some issuers are now offering rewards based on your spending habits, rather than on the category of the purchase. This could mean that you can earn rewards on all of your purchases, regardless of where you shop.
Keep watching our YouTube Channel ‘DNP INDIA’. Also, please subscribe and follow us on FACEBOOK, INSTAGRAM, and TWITTER
