Not all reward points are created equal. A point on one card might be worth ₹1, while a point on another might be worth ₹0.20.
Step 1: Find the Earning Rate
How many points do you earn per ₹100 spent?
Example: Card X gives 4 points per ₹100.
Step 2: Find the Redemption Value
What is the monetary value of one point when you redeem it? Check the catalog carefully. Sometimes points are worth more when booked for flights vs. statement credit.
Example: 1 point = ₹0.25 for statement credit.
Step 3: Calculate the Effective Reward Rate
Multiply the points earned by their value, then divide by the spend amount.
(4 points * ₹0.25) / ₹100 = 0.01 = 1% Effective Reward Rate.
Step 4: Subtract Hidden Costs
Don't forget the redemption fee! If redeeming points costs you ₹99 + 18% GST (₹116.82), you must subtract this from your total reward value.
DhanChakshu automatically calculates these effective reward rates behind the scenes, ensuring you always compare apples to apples.