Redeeming credit card reward points or airline miles can be exciting — free flights, hotel stays, shopping vouchers, and more. But many cardholders face an unpleasant surprise: a redemption fee when converting points or miles into value. This small fee can eat into your hard-earned rewards and reduce the overall benefit of using your credit card.
To get maximum value, it’s best to choose credit cards that have zero or minimal redemption fees. In this blog, we’ll explore what these fees are, why they matter, and which cards in India offer the best deals for redemptions without extra costs.
What Is a Redemption Fee?
A redemption fee is a charge levied by credit card issuers when you redeem your accumulated reward points or miles for vouchers, flight bookings, or statement credits.
For example, if you’ve earned 10,000 points worth ₹1,000 and your bank charges a ₹99 redemption fee, your net value reduces to ₹901. Over time, these small deductions can make a noticeable difference.
Most Indian banks charge around ₹50–₹199 per redemption transaction, depending on the type of redemption and card variant.
Why Redemption Fees Matter
The purpose of collecting points or miles is to save money or enjoy premium perks. Paying fees at redemption defeats that purpose.
Here’s why you should look for cards with zero redemption fees:
- Better Reward Value:
Every rupee saved on fees increases your effective reward rate.
- Encourages Frequent Redemptions:
When there’s no fee, you can redeem points whenever you want — not just when you’ve accumulated a large number.
- Transparent Earnings:
Zero-fee redemptions ensure that the value of your earned points remains consistent and predictable.
- Smoother Experience:
It eliminates the hassle of calculating net value after charges.
How Redemption Fees Are Usually Charged
Redemption fees can appear in different forms depending on your card type:
- Per Redemption Transaction: A flat fee (like ₹99) each time you redeem points.
- Per Miles Transfer: A charge when converting reward points to airline miles or hotel loyalty programs.
- Processing Fee: Hidden under “service” or “handling” charges.
- Catalog or Voucher Redemption Fee: A charge when redeeming for shopping vouchers or merchandise.
Most users discover these fees only when the charge appears in their next billing statement. Hence, checking the card’s “Schedule of Fees & Charges” before applying is essential.
What to Look for in a Zero Redemption Fee Card
When evaluating credit cards, check these specific details in the terms and conditions:
- Reward Redemption Fee Clause:
Look for the line “Reward Redemption Fee: Nil” under the fee schedule.
- Airline Miles Transfer Fee:
Some cards offer free redemption but charge for miles transfer. Ensure both are zero.
- Minimum Redemption Threshold:
Some cards have no fee but require a high number of points to start redeeming.
- Redemption Channels:
Ensure the zero-fee policy applies to all redemption options — statement credits, flights, hotels, and vouchers.
- Premium Variants:
Higher-end cards often waive redemption fees as a loyalty or premium privilege.
- Updated Terms:
Banks frequently change their reward structures, so confirm the latest details on official sources.
Popular Indian Credit Cards With Zero or Minimal Redemption Fees
While many banks in India have started adding redemption fees, a few still offer zero or low redemption charges on selected cards.
Here are some of the most user-friendly options in 2025:
Overview:
American Express is known for its smooth reward redemption experience, and many of its cards do not charge a redemption fee for converting points into statement credits, travel bookings, or partner redemptions.
Key Features:
- Annual Fee: ₹1,000 for the first year, ₹4,500 from second year
- Redemption Fee: Nil for most redemptions
- Reward Rate: 1 Membership Reward Point per ₹50 spent
- Redemption Options: Flights, hotel bookings, shopping vouchers, or statement credit
- Highlights:
- Frequent “Bonus Points” offers for milestone spends
- Access to Amex Travel portal for redemptions at no extra cost
Best For:
Users who frequently redeem points for shopping and travel and want flexibility without added charges.
Overview:
This premium travel card allows users to earn reward points and convert them into Avios miles without paying additional redemption or transfer fees.
Key Features:
- Annual Fee: ₹10,000 plus taxes
- Redemption Fee: Nil for Avios transfer
- Reward Rate: 1 point = 1 Avios mile (conversion rate varies)
- Other Benefits:
- Complimentary international and domestic lounge access
- Travel insurance coverage
- Concierge and global emergency assistance
Best For:
Frequent flyers who want to earn and redeem Avios miles with zero conversion or redemption fees.
Overview:
The HDFC Diners Club Privilege card offers excellent travel and lifestyle benefits with zero or minimal redemption fees when redeemed via the HDFC SmartBuy portal.
Key Features:
- Annual Fee: ₹2,500 plus taxes
- Redemption Fee: Nil for redemptions on SmartBuy portal
- Reward Rate: 4 Reward Points per ₹150 spent
- Redemption Options: Flights, hotels, and vouchers
- Additional Benefits:
- Lounge access worldwide
- Comprehensive insurance cover
- Travel concierge assistance
Best For:
Travel enthusiasts who frequently redeem points for flights and hotels.
Overview:
The SBI PRIME Credit Card offers a good balance between rewards and redemptions. For most travel and voucher redemptions, the fee is either waived or minimal, especially for PRIME members.
Key Features:
- Annual Fee: ₹2,999 plus taxes
- Redemption Fee: Nil for selected vouchers and travel bookings
- Reward Rate: 2 points per ₹100 spent on dining, groceries, and department stores
- Other Benefits:
- Complimentary airport lounge access
- Welcome e-vouchers worth ₹3,000
- Fuel surcharge waiver
Best For:
Users who want a mid-range travel card with minimal redemption and strong reward structure.
Overview:
ICICI’s Emeralde Amex variant is a luxury card designed for high-spending individuals, offering reward redemption flexibility with zero or minimal processing fees.
Key Features:
- Annual Fee: ₹12,000 plus taxes
- Redemption Fee: Nil for statement credit and partner conversions
- Reward Rate: 4 points per ₹100 spent on travel and lifestyle categories
- Additional Perks:
- Unlimited airport lounge access
- Complimentary golf sessions and spa benefits
- 24x7 concierge service
Best For:
Luxury travelers who want maximum value from reward points without worrying about redemption charges.
Tips to Maximize Zero-Fee Redemptions
- Redeem Smartly:
Choose redemptions that offer high value per point, like flight tickets or hotel bookings.
- Combine with Offers:
Use bank portals or limited-time offers for boosted redemption value (e.g., “10% extra value on travel bookings”).
- Avoid Partial Redemptions:
Even if there’s no fee, redeeming in bulk ensures better clarity and maximized usage of your points.
- Check for Time-Limited Points:
Don’t let reward points expire — redeem them before the validity period ends.
- Track Value per Point:
Calculate how much each point is worth after redemption to ensure you’re getting a good deal.
Use Bank Portals:
Many banks waive redemption fees if you redeem directly through their travel or lifestyle portals.
Common Mistakes to Avoid
- Not Reading Terms: Always check the fee schedule before redeeming. Some cards charge for one redemption method but not another.
- Ignoring Conversion Fees: Airline miles transfers can have hidden charges. Confirm before converting.
- Low-Value Redemptions: Merchandise or small vouchers often give poor point value compared to travel redemptions.
- Missing Expiry Dates: Points usually expire in 2–3 years, and expired points cannot be reinstated.
Conclusion
Choosing a credit card with zero redemption fees can help you maximize every rupee you spend. While some banks in India have introduced redemption charges recently, several premium and mid-tier cards — like American Express Membership Rewards, IndusInd Avios Visa Infinite, HDFC Diners Club Privilege, SBI PRIME, and ICICI Emeralde Amex — still offer no or minimal fees.
Always verify current terms before applying, as fee structures can change. If you travel frequently or use your card for high monthly spending, picking a card that waives redemption fees will ensure you get the true value of your reward points or miles.