Slowly yet steadily, our country has turned into a hub for banking services of all kinds especially Credit cards. Credit cards have gripped the people’s minds in such a way that sometimes we end up applying for unnecessary ones even when we may be aware of their non-utility. Due to this ready availability of money, people prefer to use them to pay for everything from cars to groceries to even intangible stuff like movies and entertainment; in short, it ends up as a means of spending more than an individual’s financial status permits. To lure in more and more potential customers, the banks offer an attractive welcome bonus or roll back reward points with each new sign up.
There’s nothing more gratifying than acquiring reward points which can be redeemed through future travel reservations such as airfare, hotels, rental cars, cruises, and tours. As the famous adage goes, “It doesn’t matter where you are going, it’s whom you have beside you that matters,” and it does hold true. There isn’t anybody who, if given an opportunity, wouldn’t want to travel around the world. The only obstacle which pops up in our minds at this thought is ‘shortage of money’. No matter if it’s a backpacker’s trip on a shoestring budget; one would need a constant flow of readily available cash to travel unhindered.
How would it be if a detailed and structured guide is dished out to you laying down some smart ways of ticking off this major bucket list of yours? Read on!
So What Is A Travel Credit Card And How Does It Work?
Tourism is the leading business globally. In tandem with this humongous trade, Travel Rewards Credit Cards have been a rage the world over in recent times. There are two types of Travel Credit Cards as mentioned below:
Airline, Hotel or Car rental privileged cards: The major perk this card offers is its Air Miles reward programs. In addition to it, they provide priority boarding, expedited security, free baggage check-ins, and exclusive lounge access. One would have to fly exclusively by one airline brand to avail of these loyalty redemption options. Same holds for the Hotel industry as well as each repeat check-ins.
General travel Credit cards: These cards work in affiliation with travel brand partnerships. The customer is given an option to redeem the accumulated reward points with the card company partners. This is advantageous because the partner lists tend to include a more comprehensive list of possibilities for multiple airlines and hotel brands, unlike the privilege cards.
There are numerous travel Credit cards to choose from, but with a little bit of thorough study on which one is best suited in line with the individual needs, one can end up saving on much money in the form of good reward points and cash backs. It is advisable to compare two or more cards for their sign-up bonuses, loyalty programs, perks, offers, arcane rules, and hidden fees. Some globetrotters have accumulated hefty points through the sign-up bonuses alone. They may be cash poor but call themselves miles rich. All these reward points and miles allow them to travel the world cheap. Apart from the one with the lowest interest rate, low/ no annual fees, hefty sign-up bonus and good rewards package, there are indeed other aspects to be analyzed before choosing a travel credit card which works to your benefit. Listed below are a few things to consider:
Interest rates: This should be the primary aspect of concern. In an untoward situation where one isn’t able to clear the monthly due, high-interest rates can be a real pain.
Annual fees: There are banks which waive off the first year fees and may continue to even the next year also depending on the card’s financial transaction.
Card’s expiration dates: It is suggested to keep a regular tab on the expiry dates of the reward points.
Loss of points during redemption/ Cashback devaluation: It has been noticed that while transferring points to the travel partner, the value of the points sometimes differ drastically. Also, many cards offer cash back at a fraction of the actual amount spent.
Overseas transaction fees: Most travel credit cards waive off this fee, but it is better to check on it before signing on the dotted line.
Constant revising of the Reward program: To reduce the value of their reward points without irking their customers, travel companies continuously change their program structure and rules. It is best to get a general travel credit card for this very reason since even if one airline devalues its points, the ‘air miles’ can be redeemed on another airline.
Sign-up bonuses: Many cards offer bonus miles on signing up with them, but these offers keep on fluctuating depending on the promotional programs like online sign-ups or phone sign-ups. It is better to check all available promotions before committing to it.
Advantages And Drawbacks Of Travel Cards
The advantages of travel cards: There have been instances where the acquired travel reward points and air miles have yielded an all-expense-paid family vacation. Along with that, an excellent travel card can proffer travel benefits just for having the account such as free baggage check-ins and exclusive lounge access, at the same time as a hotel credit card customer will be given privilege that can put forward room upgrades, late checkouts, and even complimentary breakfast. Some travel cards may go an extra mile and provide its clients travel insurance policy coverage for any untoward incident like lost or delayed baggage, trip delay or even cancellation.
The drawbacks of travel cards: With so many benefits, travel cards have their own set of disadvantages also. One needs to have a healthy creditworthiness to qualify for a competitive travel card. Compared to other kinds of reward credit card, travel cards generally have a higher interest rate. Also, most cash back credit cards and retailer reward cards don’t levy an annual fee, unlike their counterpart travel cards. Most travel cardholders would find these reward programs to be complex and puzzling. The frequent flyer programs and hotel loyalty programs usually have many terms and conditions, and patrons can sometimes be let down when a program doesn’t live up to their expectations.
Credit cards aren’t merely about expenditures that our financial strength doesn’t permit. They have also turned out to be a way to get perks for the expenses made through them. Before selecting a travel rewards card, its advantages and drawbacks must be sifted through.