A tiered rewards program pays different percentages of rewards on different categories of purchases (so petrol might earn more than general shopping) . There may be a cap on the amount of rewards you can earn in the highest earning category. This type of rewards program will require a little more calculation and strategy in using your credit card if you want to earn the maximum amount of rewards.
Example: Credit Card B pays 3% on groceries (for up to IDR60,000,000 in grocery purchases each year), 2% on petrol purchases (from standalone petrol stations), and 1% on everything else.
For every IDR1,000,000 in grocery purchases you make, you earn IDR30,000; for every IDR1,000,000 in petrol purchases you make, you earn IDR20,000, and you earn IDR10,000 for every IDR1,000,000 you spend on everything else.
Say you spent a total of IDR3,000,000 split evenly among groceries, petrol, and other purchases. With Credit Card A, you would earn IDR45,000 in cash rewards. With Credit Card B, you would earn IDR60,000 – that’s 63.5% more.