A significant shift in consumer behavior is reshaping how Indians use their credit card benefits. According to a major new report, booking flights has emerged as the single most preferred way for customers to redeem their hard-earned credit card reward points in 2025. This trend highlights a growing preference for experiential spending over material goods, especially in the post-pandemic era where travel has seen a massive resurgence.
Travel Takes Flight as the Top Redemption Choice
The comprehensive analysis, which studied spending and redemption patterns across millions of credit card users in India, found that air travel bookings now account for the largest share of reward point redemptions. This marks a notable change from previous years, where options like cashback, voucher redemptions for electronics, or statement credits often competed for the top spot. The desire to travel, both domestically and internationally, is powerfully driving credit card usage and loyalty program strategies.
Industry experts point to several factors behind this surge. The Indian middle class is increasingly aspirational, viewing travel as a key lifestyle component. Furthermore, the seamless integration of reward points with airline booking portals offered by major banks has made the redemption process exceptionally easy. Customers can now often book tickets directly, covering part or all of the fare with their accumulated points, which enhances the perceived value of their credit card.
Beyond Travel: Other Popular Redemption Avenues
While flight bookings lead the pack, the report also sheds light on other popular categories where Indians are spending their reward points. Following travel, consumers show a strong preference for redeeming points for fuel purchases and for buying grocery vouchers. This indicates a practical side to reward usage, where everyday essentials are being subsidized through loyalty programs.
The data suggests a bifurcation in redemption behavior: luxury and experience-based spending for flights, and utilitarian spending for fuel and groceries. This pattern reflects the broad user base of credit cards in India, encompassing both premium and mass-market segments. The report emphasizes that banks and card issuers are taking note of these trends to tailor their reward portfolios, ensuring they offer relevant and attractive options to retain customers.
Implications for Banks and the Future of Loyalty Programs
The clear consumer preference for flight bookings carries major implications for the banking and financial services sector. To stay competitive, issuers are likely to forge stronger partnerships with airlines and travel aggregators. We can expect to see more co-branded credit cards specifically focused on travel, offering accelerated point earnings on flight bookings and hotel stays. Additionally, the value proposition of reward points will increasingly be measured by their power in the travel domain.
This trend is also a strong indicator of economic sentiment. The willingness to spend points on travel, a discretionary expense, signals consumer confidence. As the report concludes, the dominance of flight bookings in reward point redemptions is more than just a spending pattern; it is a reflection of India's growing economy and the aspirational mindset of its consumers. Loyalty programs that successfully tap into this desire for experiences, particularly travel, are poised to win in the competitive credit card market of 2025 and beyond.
