6 traps that make a credit card's reward rate look bigger than it is
By Card Manager · 10 Jun 2026 · 4 min read
Every card wants you to remember one big number — "10% rewards!", "5% cashback!". The problem is that the headline rate and the rate you'll actually earn on everyday spending are often very different things.
After modelling the reward structures of 350+ Indian cards, the same handful of tricks come up again and again. None of them are scams — they're just narrow conditions dressed up as a broad rate. Here are the six to watch for, and how to read past them.
1. Portal-only rates
The classic one. A card advertises "up to 10X rewards", but that multiplier only applies when you book through the bank's own portal — HDFC SmartBuy, PayZapp, Axis Travel Edge, ICICI iShop, and so on. Buy the same flight or product directly from the merchant and you earn the plain base rate.
How to read it: treat portal multipliers as a bonus for a specific behaviour, not the card's rate. If you won't reliably route purchases through the portal, the portal rate isn't yours.
2. Single-merchant rates
"10% on Swiggy", "5% on Amazon". Genuinely great — at that one merchant. It is not the card's dining rate or its online-shopping rate. A co-brand card can have a fantastic merchant number and a very ordinary rate everywhere else.
How to read it: match merchant rates to where you actually spend. A 10% Swiggy rate is only worth 10% on the slice of your budget that goes to Swiggy.
3. Introductory / time-limited rates
Some of the best-looking rates are promotional — "5% for the first 12 months", welcome-period boosts, first-90-day accelerators. They're real, but they expire, and the steady-state rate underneath is usually much lower.
How to read it: for a card you'll hold for years, the post-promo rate is the one that matters. Discount anything labelled "first N months".
4. Milestone / spend-threshold rates
"Earn 5X on spends above ₹1.5L/month", "bonus points after ₹10,000". These are gated: you only get the boost on spend beyond a threshold, or as a one-time bonus once you cross it. They reward heavy, concentrated spending — not the average user.
How to read it: ask "do I clear that threshold every cycle?" If not, that rate is hypothetical for you.
5. Surcharge waivers counted as "rewards"
A fuel "surcharge waiver" reverses the 1% fee the payment network charges on fuel. It's a saving — not an earn on your spend — yet it frequently gets folded into a card's headline "value-back" number. It's also capped (often ₹250–500/month) and conditional on transaction size.
How to read it: a waiver is money you don't lose, not money you make. Don't add it to the reward rate.
6. Caps that quietly throttle the rate
This is the one that catches careful people. A category can genuinely earn 5% — but only up to a monthly cap. Spend past it and the rate silently drops to base. A card advertising "5% on groceries, capped at ₹500/month" is really 5% on your first ₹10,000 of groceries, then ~1%. Above the cap, the effective rate decays toward the base rate.
How to read it: always pair a rate with its cap. The honest version of a rate is "X% up to ₹Y per month".
The number under all of this: what a point is worth
Even a clean, uncapped points rate isn't a percentage until you know what one point is worth in rupees — and that varies wildly by how you redeem. The same point can be worth ₹0.25 as statement cashback or ₹1 transferred to an airline. So "4 points per ₹150" could be anywhere from ~0.7% to ~2.7% depending on redemption. Cashback is the easy case: ₹1 is ₹1.
How to actually compare cards
Put plainly, a reward rate is only an everyday rate if it's:
- earned on all spend in a category (not one merchant, not via a portal),
- issuer-funded and not gated on a promo window or a spend threshold,
- quoted with its monthly cap, and
- converted at an honest point value for how you'll redeem.
Everything else is a real but conditional perk — worth knowing, not worth treating as the card's rate.
This is exactly the lens the catalog and optimizer on Card Manager are built around: separating genuine category earn rates from portal, merchant, promo, milestone, and waiver perks, and respecting caps — so the "best card for X" answer is the honest one.
Card details change often and this is general information, not financial advice — always verify current terms with the issuer. See our disclaimer.
Card Manager
Founder, cardmanager.co.in
Card Manager analyses 350+ Indian credit cards — separating real category earn rates from portal, merchant, promo and capped perks. General information, not financial advice; see our disclaimer.