With only a few weeks left before the end of 2022, travel bookings for year-end holidays are expected to surge. Travellers can plan their holiday spending with the help of many travel credit cards available in the market. With the spend now and pay later feature inbuilt into credit cards, it becomes easy for travellers to manage their expenses. However, spending with credit cards without fully understanding the implications could become a challenge later on. Choosing the right credit card for the purpose of travelling may also be difficult for many travellers.
Though travel credit cards come with several benefits, experts say that one should always assess his/her expected spends before choosing the right credit card.
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“A travel credit card should by definition help you save more when travelling. Travel benefit cards usually offer higher reward points on travel spends and they can include benefits such as low forex markup fee, and lounge access. One should always assess their expected spends and the regularity of their spending on travel to choose the right credit card,” says Gaurav Chopra, CEO & Founder of IndiaLends.
There are two categories of travel credit cards – Cobranded Card and Travel Benefit Cards. Cobranded Cards such as those with IRCTC or Airlines provide higher rewards and benefits when booking travel using these cards.
“Cobranded cards usually offer a 1:1 conversion of reward points to airline miles, which can help cardholders earn reward tickets faster and more frequently,” says Chopra.
Some co-branded cards also offer additional perks such as cashback, same-cost EMIs, and free upgrades to name a few. “People who travel outside of India frequently could opt for a card with low or no forex fee, whilst frequent travellers may opt for cobranded IRCTC or airline cards,” says Chopra.
Key points to keep in mind while spending on the trip with credit cards
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Following are some key points one should keep in mind while spending on the holiday trip with credit cards:
Planning the budget: Before you start spending on your trip, it is extremely important to know what is your budget. Budgeting would keep spending on track and it would stop you from overspending.
Research: Before using a travel credit card, you need to be well aware of the perks and offers provided by the credit card. It helps to save extra while booking flights, hotels etc.
Make payments on time: A user must be aware of the due date to pay their credit card bill. It’s important to make the payment on time as it directly impacts the credit score.
Travelling with more than 1 card: Sometimes a user might face an issue with one travel credit card. So it is important to have an alternative credit card.
Be aware of the rewards and benefits: Travel credit cards benefit users as there are various partnerships and co-branding arrangements available.
“Most travel credit cards provide Airmiles or reward points that can be converted into miles and can be utilised for planning vacations. They can be redeemed by the user while making flight or hotel bookings. The rewards and perks provided by travel credit cards are also redeemable against other travel-related bookings,” says Chopra.
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Low forex fees: While using a travel credit card abroad, banks usually charge a foreign exchange markup fee. The foreign exchange markup fee can be as high as 3.5 per cent but there are certain cards that provide low forex fees. For instance, travel credit cards have low forex fees which benefit the user. It’s important to know which travel credit cards have the lowest forex fee, it would help a user to save extra.
