What’s The Point of Credit Card Reward Points?

by RinggitPlus Team

Credit Card Reward Points

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What’s The Point of Credit Card Reward Points?Here at RinggitPlus there are two things we love about credit card reward points:

  1. It is the only number we like to see getting BIGGER on our monthly credit card bills
  2. We get to flip through some awesome point redemption catalogues (even if you don’t have their credit cards, you should definitely checkout Citibank’s Citireward Catalogue and Maybank’s Maybankard Treatspoints)

But no matter how much we love our points-funded treats, there’s one question that has really been bugging us – what is a reward point worth? Here is a quick look at what you can get back for your reward points:

ItemValue (RM)Rewards Points
RM50 Parkson VoucherRM509,300 – 13,000
Samsung Galaxy SIIIRM 1,699376,000 – 451,000
iPod Nano 16GBRM519119,800
Elba Vacuum Cleaner (EV-6070)RM153 34,200– 35,200

Looking at this table has helped us realise what a reward point is really worth. Starting with the Parkson shopping voucher – the RM50 is around 0.5% of 9,300 – 13,000 points. For the Samsung Galaxy SIII, iPod Nano and Elbal Vacuum Cleaner, the value of each item is around 0.4% of the credit card rewards points required to redeem the gift.

What does this mean in plain English?

It means that each reward point you earn is worth about 0.5cents. So if you earn 10,000 rewards points by spending RM10,000 on your credit card, you will get back around RM50 in value from your points redemption. Another way to look at it is that earning rewards points is like earning 0.5% cash back on your credit card.

Now that we know each reward point is worth RM0.005 (or 0.5 cents), do we still love them as much?

The RinggitPlus Team’s Conclusion

If you love watching your credit card reward points grow every month so that you can save them up for a great gift in the catalogue then don’t let us spoil your fun. But if you want to get more for your money then keep reading.

The first thing you need to do is check your credit card rewards points policy. If you are only earning 1 point for every RM1 you spend then you are basically getting a 0.5% rebate on your spending. As much as we love our points, we love our money more. Cash back credit cards can earn 5% cash back – that’s 10 x more than you would get with rewards points!

Does this spell the end for credit card rewards points? Has cash back killed the credit card reward points star? Stay tuned for our full comparison later this week, “Cash Back vs. Rewards Points is Lin Dan vs. Chong Wei”.