Treating a credit card as nothing more than a way to pay bills is an outdated idea. Used wisely, the same card can put real money back into your pocket. The trouble begins when people pick up any card without first understanding their own needs and spending patterns. As a result, the rewards, cashback and other perks they should be earning either arrive in part or slip away entirely.
A finance study has laid this out clearly. It found that because of poor card choices, many people miss out on benefits ranging from thousands of rupees to as much as ₹2 lakh every year. Financial experts put it simply: real savings come only when the right card meets the right way of using it.
What the study found
The study examined the spending and reward patterns of 129 credit card users, and the result was striking. Around 92% were using a card that did not match the way they actually spent. Because of this, the rewards and cashback they earned fell short of what was possible. On average, most people were getting back only about 4% of their total spending as rewards. With the right card and the right strategy, that figure can climb to 10%. For heavy spenders, the benefit can even reach 13% to 14%.
How much you lose, by spending level
The size of the loss depends on how much you spend in a year. Those with annual credit card spending of up to ₹5 lakh could be missing out on roughly ₹20,000 to ₹25,000. People spending between ₹5 lakh and ₹8 lakh stand to lose ₹38,000 to ₹42,000. If annual spending falls between ₹8 lakh and ₹15 lakh, the amount left on the table can be around ₹85,000 to ₹90,000. And for those spending more than ₹15 lakh a year, this potential loss can run past ₹2 lakh annually.
Where people go wrong
According to experts, the most common mistake is sticking to a single card for every kind of expense. Different cards offer different benefits across categories such as groceries, travel, online shopping, dining and fuel. The second big slip-up is around reward points, many people simply do not redeem them at the right time or in the right way. In several cases, the value of those points through travel bookings or brand vouchers can be many times higher than ordinary cashback. Yet for lack of awareness, people leave this extra benefit unclaimed.
How to pick the right card
The expert advice is straightforward. Start by reviewing your spending over the past 6 to 12 months and identify which categories take up the most money. Then choose a card that covers around 60% to 70% of your regular spending. If needed, you can keep a second card that offers better rewards in the remaining categories. On top of that, it is important to keep using your reward points from time to time and to stay alert to the offers your card runs. With a little planning, a credit card can become a reliable means of saving rather than just a way to spend.
