This credit card is beneficial to frequent domestic as well as international travellers, business travellers, families, and individuals who spend a lot on travelling.
The travel credit card market has witnessed tremendous growth in the past few years, mostly characterized by incentive-loaded cards, in addition to some unique travel benefits.
Based on a survey conducted by Pristine Market Insights, the awakening factor for the majority of consumers who drive the evolution of travel credit cards comprises values attached to the cards; as a result, they offer miles or points with which one can pay for flights, car rentals, hotels, etc.
Understanding Travel Rewards Programs
It is essential to understand how rewards programs function. Travel rewards mostly entail reward points or miles that one accumulates and later uses to pay for any purchases using a credit card.
These rewards are easily convertible to credit for travel-related expenses like flights, hotels, car rentals, or even tourism. There are two types of travel rewards programs: miles and points.
Miles mostly refer to a particular airline’s frequent flyer program. Points, on the other hand, are generally attached to credit cards and occasionally converted to miles for a particular airline.
There is also a tendency to transfer points to partner airlines or hotels and have ease when redeeming rewards. In general, there are two major rewards programs, and these are miles and points.
Types of Travel Credit Cards:
There are different types of credit cards in India, and these include:
- Airline- focused Credit Cards: These cards focus on catering to frequent domestic and international buyers and provide benefits like air miles, flight ticket, seat upgrades, for priority boarding, and airline loyalty rewards.
- Lounge Access Credit Cards: Business travellers and frequent flyers are the target audience for this category of credit cards and the benefits include domestic and international lounge access, premium lounge networks.
- 3. International Travel Credit Cards: Targeted at International travellers, overseas students, and business professionals and the benefits may include lower forex mark up, international lounge access, travel insurance, emergency assistance, rewards on foreign spending, and so much more.
- General Travel Rewards Credit Cards: These cards target travellers who seek to be more flexible when it comes to booking flights and accommodation at hotels; they offer various benefits like reward points that are usable for flights, hotels, holiday packages, and travel bookings at multiple partners.
Benefits of Travel Credit Cards:
- Earn Miles and Points for Every Purchase: Amongst the many advantages that travellers gain from using these credit cards is that, with every purchase they make, they earn points and miles. Moreover, most cards offer bonus points for purchases made in certain categories. The rewards can then be used for travel-related expenses; therefore, enabling one to save more money. In addition, these rewards can be used to purchase highly expensive flights or even to book a holiday.
- Sign-up Bonuses: These bonuses are mostly provided to customers on signing-up, they can accumulate to a huge number of travel rewards. However, one has to fulfill a specific set of criteria within a particular period of time and in the same period of time, they should have met minimum spending to be eligible for these bonuses. Once it has been fulfilled, one can expect to receive bonus points to enable them to book a flight or even to pay for hotels.
- Priority Boarding and Airport Lounge Access: This feature makes it easier for one to travel as it enables them to access the lounge areas found at the airports to have a more relaxing time when waiting for their flight. Priority boarding is also another beneficial feature that allows one to be at the front line of the queue during boarding, as a result, travellers can spend extra time relaxing before taking off.
- No Foreign Transaction Fees: These travel credit cards mostly do not charge their customers any foreign transaction fees; hence, being able to save up large amounts of money. The foreign transaction fees charged by the cards that do not support this feature can be quite high.
- Travel Insurance and Protection: These cards come with various benefits when it comes to insurance and protections. Some of them are free of charge while others might impose a fee. These benefits offer some financial assistance in case of unforeseen circumstances during travel. It is essential to understand the benefits and their requirements to know the suitable instances and the extent to which they can help.
- No Risk of Fraud: One of the major drawbacks of having Credit or Debit Cards or even cash is at risk of being robbed or phished. The robbers usually aim to capture bank details in order to access bank funds and they can effortlessly cause serious financial harm. In such cases, it is quite challenging to get compensated as one has to prove where and how fraud was conducted. In addition to this, in case one carries cash and they get robbed, it entails a direct personal loss. With Travel Credit Cards, there is no risk of fraud; hence, no financial loss or liability.
Consumers Travel Spending Management
Once you have chosen a credit card it is now time to get earning those rewards. There are several points to keep in mind while maximizing your rewards
- Use the Credit Card for Everyday Purchases: In order to maximize your rewards make sure that you spend every single purchase you make with your travel credit card. Whether you are buying food, eating at a restaurant, or even paying for your gas you can get a crazy amount of points or miles on your everyday purchases by simply using your travel credit card.
- Take Advantage of Bonus Categories: You must remember to take advantage of any bonus categories your travel credit card may offer. Certain categories tend to offer higher rewards than others. Therefore, using your card to swipe for these purchases will assist you in earning more rewards. Bonus categories sometimes vary depending on the specific card that one is using. There is a probability that the category that you find the most rewarding may be different from that of another person.
- Make Large Purchase with Reward Cards: When making big purchases like flights or for your hotel, you should pay as much as you can with your reward cards; that way you can take advantage of maximizing your rewards. This means that you can receive lots of points or miles while also getting a good balance.
- Track Your Points and Miles: It is important to always track your points or miles so you don’t waste any. Travel credit cards make this easy since you are able to see your progress. This feature is usually found on either the mobile app or on the website of the company. This way you can always know how much you have and you can maximize it.
- Use Referral programs: One of the referral programs that one can use when it comes to increasing one’s benefits entails recommending the credit card to friends and family. It should be noted that most credit cards offer rewards to the person when they refer someone in regards to using the credit card.
Travel Rewards Turn Everyday Spending into Journeys
Instead of focusing on a single perfect travel credit card, it is essential to make a note based on your needs and the benefits that one is willing and able to offer.
Being aware of the general features of travel cards is important in order for one to make an informed decision based on his or her preferences and spending patterns.
Being aware of what different types of travel credit cards are available to the consumer ensures that one gets the most out of their spending whether this is in the form of miles, lounge access, reduction of foreign transaction fees, or hotel privileges, among other related financial benefits.
Author Bio:
Teja Kurane is a Research Analyst specializing in banking and finance, consumer finance, and emerging financial technologies.
Her research focuses on evolving payment solutions, digital financial services, travel spending behaviour, and technology-driven changes shaping how consumers and businesses manage financial transactions.
