12 tips to choose the right credit cards and travel for free
travel is a dream for millions of people around the world. the joy of discovering new places, exploring new cultures, visiting family around the world, and experiencing diverse cuisines, landscapes, and activities is on millions of bucket lists. so, how do you make your travel dreams come true?
Eugene Fodor once said, "you don't need to be rich to travel well." well, that's why we have travel credit cards.
many consumers are unaware that they can fund their travel dreams by strategically choosing the best credit cards. on the other hand, savvy consumers are able to travel the world and indulge their wanderlust, albeit with a little planning and strategy.
the founder of a startup was recently in the news because he not only funded his honeymoon with travel miles and destination points but was also able to extend these benefits to his videographer and her husband. in return, she filmed his honeymoon for free.
yes, lots of savvy credit card users are making smart choices. here's how you can go about it, too.
12 tips to choose the right travel credit card
tip 1: travel includes much more than your commute
many consumers believe that the main benefits of credit cards are getting access to travel miles that enable free airline travel. but that's really not all.
any vacation or trip also includes accommodation, meals, and transportation. when looking for the right card or mix of cards, keep an eye out for multiple benefits.
these can include:
- exclusive and elite hotel memberships
- access to international and domestic airport lounges
- domestic and travel miles/vouchers
- fuel surcharge if you plan to rent a car
- access to railway lounges when you're traveling by train
tip 2: international or domestic travel?
it's important to delve deeper into your travel goals, habits, and aspirations. that's the key to choosing the right travel card for you. for example, if your dream destination is Japan, then you will need to look at a card that offers international miles and hotel memberships, as these are two of the major costs when traveling internationally.
if you are a frequent domestic traveler, look up cards that offer domestic travel miles and domestic hotel access. if you like to travel by specific airlines or hotels, seek out cards that have tie-ups with them.
tip 3: compare air mile rewards
air miles are by far the most popular and sought after reward by travelers because one can still hack accommodations by living with friends and family or exploring options like Airbnb.
before choosing a card, understand the rates at which you can earn miles as well as how you can redeem them. it could be through vouchers or miles based on spends.
tip 4: offers with travel aggregators
some cards have a partnership with specific online travel aggregators. this means that if you want to access the offers on your newly acquired cards, you will need to make bookings via that specific online travel aggregator only.
most consumers tend to have personal favorites among travel aggregators. so, check out the ease of use factor before going for the card and understand the exact offer.
for example, some cards offer discounts on both airline and hotel bookings. it might be helpful to understand the percentage of discounts: for example, you might get 10 miles per ₹100 spent.
tip 5: airline partnerships
some cards offer benefits with specific airlines. for example, on accessing a new card, you may be eligible for vouchers with a specific airline. however, if you are not a fan of this airline, you might feel stuck with something that is not your first choice.
if an airline has a frequent flyer club, and a card has an exclusive partnership, then you will get access to the club.
some cards are specifically designed for a travel miles partnership with a premium airline. if you do a lot of business or leisure travel with an airline that does not fall in the "low-cost airline" category, then exclusive partnership cards are a great bet.
access to lounge visits is also a useful benefit, especially if you are a frequent traveler, as it makes the trip more comfortable.
tip 6: welcome gifts and rewards
the best travel credit cards come with seductive welcome incentives, ranging from thousands of instant reward points to gift vouchers for airline and hotel memberships. evaluate the overall value of the card before signing up merely for the initial gifts.
this is important because the best travel credit cards are accompanied by several fees, and unless you use the card effectively and frequently, you will end up paying extra with no joyful returns.
tip 7: fees on your card
most of the top-rated travel cards come with annual fees of between ₹2,000 to ₹5,999. some super-premium cards can come with annual fees of up to ₹20,000, and these are not easily accessible as the eligibility is way more exclusive. this amount is automatically deducted every year and is known as "renewal fees" after you complete year 1.
some cards also have an additional joining fee. when comparing cards, evaluate the overall cost to sustain the cards alongside the benefits and see whether they align with your travel goals.
tip 8: foreign currency markup fee
when you use your card on foreign soil, there tends to be a currency markup fee due to the exchange rate. this usually amounts to around 3.5% plus GST and is charged per spend on the transaction value. so, factor this in your budget when planning your travels.
when the annual fees are much higher, then the markup rate can come down to as low as 2% plus GST.
tip 9: cultivate frequent traveler habits
this breed of traveler, over some time, builds habits that allow them to travel more and access all the best benefits from their credit card journey. for example, keeping a tab on when your travel miles will expire is an intuitive thing with frequent travelers.
they also tend not to use travel cards for non-travel spends, as this limits usage when they are traveling.
this stands in contrast to poor travel card practices that include ignoring the air mile programs and using rewards to redeem non-travel benefits or merchandise.
travel credit cards are most effective when used for travel-related expenses and rewards. over time, you get superior benefits and premium treatment from the card company.
tip 10: maximize the benefits
while it's recommended not to make big non-travel spends on the card, it is also advisable to maximize benefits by putting big purchases on the card.
the key is to make sure you replenish the card before a big trip so that you have enough credit to cover you during the length and breadth of your international or domestic vacation.
tip 11: check your eligibility
once you've decided which credit card works for you, the application process takes into account your credit score and monthly income. typically, a credit score of around 700 is ideal. if your credit score ranks below this, it's time to build it up by cultivating good financial practices.
an important aspect of the journey is to always make your credit card payment on time, as delays and practices like only paying the minimum amount due, or even less, diminishes your credit score.
tip 12: build your credit score
it's very important to understand that while travel credit cards come with attractive benefits, it is even more important to make your credit card bill payments on time. this is because the annual rate of interest is typically between 37% to 42%.
put reminders on your calendar, and ensure that you have enough buffer before the due date. timely credit card bill payment will help you build your credit score and open up access to other financial products, too.
enjoy your travels
planning your travels can also be challenging and exciting. make sure you enjoy this aspect as much as the actual journey. for example, you could start off by creating a vision board of the places you'd love to visit.
then move on to more practical aspects such as budgeting and plotting the best time to request leave for your vacation. as you travel more by leveraging all the benefits of your credit cards, you will gradually bring all your travel goals to fruition and be a more confident traveler.