Travelling has increased in popularity and frequency in recent years and so has the demand for travel credit cards. With lucrative travel benefits like complimentary air tickets, rewards, air miles and discounts on travel bookings, travel cards seem to be a great companion for any traveller. However, the question arises whether the benefits that these travel credit cards claim to offer really help one save as much on their spends or can actually be utilised by an average traveller or not. Let us attempt to understand what travel credit cards are, what they offer and how we can use them before deciding whether these cards are worth the hype or not.
What are Travel Credit Cards?
Travel credit cards that help the users save on their travel expenses. These are often co-branded with various airlines, hotel chains or travel booking platforms. These might come with accelerated rewards on travel spends, airmiles, travel discounts, complimentary travel memberships, etc. to help the cardholders to maximise the value back on their travel spends.
How Do Travel Credit Cards Help you Save?
Travel credit cards can help you save on both domestic as well as international travels based on the card variant. Some of the benefits that you can utilise to increase your savings are listed below:
Accelerated Travel Rewards: Many travel credit cards come with accelerated reward points on travel spends or even come with co-branded travel rewards, like Club Vistara points, InterMiles, etc. Some cards allow you to convert the earned reward points into airmiles or redeem points for travel bookings at a higher conversion value.
Savings on Travel Bookings: Travel cardholders are offered several deals on travel through complimentary travel memberships and discounts or cashback on every flight or hotel bookings. For instance, Standard Chartered EaseMyTrip credit card offers up to 20% off on travel bookings made via EaseMyTrip platform. Moreover, some cards also offer complimentary flight tickets or hotel stays as joining as well as milestone benefits.
More Comfortable Travelling Experience: You can avail complimentary services, including domestic and international airport lounge access, priority check-ins, airport pick-ups and drops, flight upgrades, etc. by using travel credit cards. These services help you to have a smoother hassle-free travel experience.
Reduced Forex Charges: Several travel credit cards come with a reduced or no foreign currency exchange mark-up fee, which allows you to avoid additional charges while making international purchases during your travel. While cards like AU Zenith+ credit card come with a low forex mark-up fee of just 0.99%, others like Scapia Federal Bank credit card do not charge any such fee at all.
Insured Travel: Since there are always some risks involved with travelling, travel credit cards come with extensive travel insurance cover. Such travel insurance offered by these cards usually covers loss or delay of check-in luggage, loss of travel documents, death in an air accident, missed connecting flight, etc. This provides a safety net for any unfortunate incidents that may take place during your travel.
Things to Keep in Mind
Be Mindful of the Card Annual Fee: Apart from very few credit cards that might come with low or no annual fee, most travel credit cards with decent value-back come with considerable annual fees. So, it is important to compare the annual card fee of your preferred card and the corresponding value-back that you can avail by using it during your travels. The annual fee should be within your budget and the savings on that card should ideally outweigh the fee amount for that credit card to be a profitable tool for you. In case the annual fee is too high for you, then you should also check the card fee waiver condition, if available, and estimate whether you can avail it based on your average annual spends.
Limitations or Restrictions on Card Benefits: Oftentimes, the credit card benefits come with certain capping or restrictions. There might be a set upper limit on the monthly rewards earning or discount offered on travel-related spends. So, it is advised to go through all such terms and conditions applicable on the card benefits before deciding upon which travel card to apply for and whether it will prove to be beneficial for you.
Whether You Can Utilise the Card Benefits Well: Even though the travel credit cards come with welcome bonus, milestone benefits and other complimentary benefits, this does not entail that every cardholder will be able to maximise the benefits. For example, some might not be able to reach the spending milestones required to avail complimentary air tickets or some may not use the golf benefits offered by the card. Those who are not frequent international travellers, may not benefit from certain card features.
Hence, before choosing to get a travel credit card, you must analyse if you can utilise the benefits up to their potential and calculate the actual value-back that you would get on any card. Furthermore, you must also track the redemption value of any rewards that you might earn using your card and check which redemption option comes with the maximum value-back.
Travel credit cards can prove to be a great choice for frequent travellers who choose their card based on their spending habits, needs and travel plans. If you prefer a certain airline or travel destination, then a card with more benefits targeted towards your preferences would be more useful. Similarly, depending upon your preferred form of credit card rewards, like loyalty points for airlines or travel portals, reward points, discount or cashback, you can choose which travel credit card would be the best-suited one. Therefore, travel cards, when chosen wisely, while keeping the above details in mind, are an asset for the cardholders and deserve all the publicity.