Buy jewellery worth Rs 10,000 at Tanishq on a Tata credit card and drive down to the Taj coffee shop to instantly spend the Rs 500 worth rewards points earned.

This is being made possible by an "online earn and burn" programme soon to be launched on the Tata credit card.

The Tata credit card is a combination of a white label card and a normal Visa/MasterCard card and is issued by SBI [Get Quote] Cards, a joint venture of State Bank of India and GE Money.

The launch of the "online earn and burn" programme is expected to double the redemption of rewards points earned on credit cards from the current usage of just 35 per cent.

Almost 65 per cent of rewards points earned by credit card holders are not used because of the cumbersome procedures for availing of the benefits.

"Other card issuers may also like to follow suit and offer customers avenues to spend the rewards points fast," says a senior banker.

ICICI Bank [Get Quote] has issued the maximum number of credit cards, followed by Citibank and State Bank of India. Normally, rewards points account for 1-2 per cent of the money spent on purchases made through credit cards.

Credit card holders need to get hold of a brochure listing out how one can redeem the rewards points, call up the call centre of the credit card company and then wait for receipt of the voucher to redeem it at specified outlets.

Till recently, customers used to redeem the rewards points against the annual fees for cards. This is no longer the case as most of the cards are now offered free and do not attract annual fees.

Once the "earn and burn" programme gets operationalised, rewards points will get credited immediately on making a purchase and the cardholder can instantly get them redeemed.

"When a card holder goes to a coffee shop, the customer just has to say that the bill is being paid against the rewards points outstanding. The coffee shop will then choose the option of receiving the payment against rewards points on the PoS (point of sale) terminal," says Vishal Pandit, GE Money's president & CEO, India region.

The Tata credit card is the country's first card offering a large-scale, multi-brand loyalty programme, called the Tata Privilege Programme, where the rewards points offered are in some cases five times that on a normal credit card.