The festival season is just around the corner again and credit card companies and banks are offering various deals to encourage customers to spend more. As per an estimate, almost half of the credit card purchases take place in the festive season. Hence banks and companies like to make the most of it and encourage spending. With the economy, hit by all the bad news, starting to look up with hopes of a stabilising US and EU market, consumers and companies are looking forward to a great festive season ahead.
Schemes on offer
Around this time of the year competition is usually quite stiff with banks trying to beat offers of their competitors and launch various schemes to make cardholders spend. The typical schemes, some of which are on offer all the year round and not restricted to the festive season alone, include:
* Cash back offers: These are the most common offers. Credit card companies return a part of the money to the cust-omers if they use the card for purchases.
The cash back offer is generally the preferred option for cardholders as they can use this cash to buy whatever they like. Cash back offers typically are from the bankers’ pocket but they are ready to take the cut for a high volume of spending.
* Outright discount offers: These are where consumers can use their card to get a discount on their purchases. This discount can be availed along with the normal discount that retailers give to the shoppers.
* Reward points: These are another very popular offer by banks. Reward points can be availed for discount in future after the card holder accumulates a certain number of points. These points are equivalent to a cash amount which can be used for discount purposes.
An example could be flying miles where travellers accumulate points for every mile they fly. Once they accumulate a significant number of points, this can be used to purchase more miles of flying.
* Joint offers: There are other offers where card companies offer deal with retail companies.
Hence, using your ICICI Bank credit card at Croma megastore or using an Amex card at The Park restaurant may fetch additional discounts.
These offers help both banks and companies in co-branding. Another exa-mple could be Hindustan Petroleum (HP) coming up with a joint card with SBI to offer five per cent discount on all petrol purchases in its outlet.
* Zero interest loans: Many cards offer zero interest loans. Hence you buy a high-value item and pay the price in instalments without paying anything extra as interest.
* Other offers: Then there are other creative offers by retailers and banks. These range from discounts in hotels, restaurants, pubs to getting tickets for international games or tours to foreign countries. For example, the railways and SBI are offering discounts on all the hotels and restaurants during the festive season.