Buying a travel credit card? Consider these points before applying

Sahil Arora

Travel credit cards have become an excellent tool for business travellers and holidaymakers. These cards earn higher benefits on travel-related swipes and allow the accumulated reward points to be redeemed for air tickets and hotel stays. They also enrich the travel experience by providing complimentary airport lounge accesses, dedicated concierge service, additional baggage allowance and priority check-in at airports.

If you too are planning to avail a travel credit card, keep these factors in mind while selecting your travel credit card.

Loyalty towards travel brand

Travel credit cards are available in both co-branded and non-co-branded varieties. Co-branded travel credit cards offer higher reward points on spends made at the partner travel brands.

For example, Jet Privilege HDFC Diners Club Credit Card credits 8 JPMiles on every retail expense of Rs 150 whereas it credits 24 JPMiles on tickets booked on Jet Airways website for the same spend amount.

Moreover, the reward points of co-branded travel credit cards can only be redeemed at its partner brands for air tickets, hotel stays or select merchandise.

Although brand neutral travel credit cards also offer higher benefits on travel expenses, they offer greater choice for earning higher rewards points or redeeming them.

For example, Citibank PremierMiles Credit Card offers 10 Miles on every Rs 100 spent on booking air tickets and hotel stays through the website of PremeirMiles. The same rate is also applicable on booking air tickets directly through the websites and air ticket counters of all airlines.

Similarly, the accumulated Miles can be redeemed for booking air tickets of all airlines, either through the PremierMiles website or through the online travel partners of Citibank. The accumulated Miles can also be redeemed at non-travel partner brands of Citibank.

Hence, opt for a co-branded travel card only if you are loyal to a particular travel brand. Else, go for a brand-neutral travel credit card for greater flexibility.

Joining and renewal benefits

Most of the travel credit cards offer free reward points and travel vouchers as joining and renewal benefits. These benefits can recover your joining and renewal fee in part or entirety.

For example, Axis Bank Vistara Signature Credit Card charges Rs 3,000 as joining and renewal fees while offering 1 complimentary domestic air ticket as a joining and renewal benefit.

In many cases, the benefit realised from the free complimentary ticket may well surpass the cost incurred in terms of joining and renewal fee. Thus, always compare the monetary value of your travel credit card’s joining and renewal benefits and opt for the one having the highest potential of recovering or surpassing your cards’ cost.

Joining and renewal fees

Travel credit cards usually have higher joining and renewal fees than other credit cards types. While the annual fees of travels card can go up to Rs.10,000, their renewal fees can go up to Rs.5,000. Hence, carry out a cost-benefit analysis of travel credit cards and choose the one whose benefits in terms of reward points, discounts, cashback, etc exceed its costs by the widest margin.

Ancillary benefits

Like other credit cards, travel credit cards also offer benefits like dining discounts, free movie tickets, fuel surcharge waiver, discount vouchers, etc.

For example, Jet Airways ICICI Bank Coral Credit Card offers 15 percent dining discount at over 2,500 restaurants and 1+1 movie tickets on booking movie tickets through bookmyshow.

These ancillary benefits can significantly increase the utility of your travel credit card and reduce the necessity for availing an additional card for those spend types. Hence, choose a travel credit card that suits your non-travel spending habits the most.

Airmiles/reward points expiry

Just like most credit cards, the reward points offered on travel credit cards come with their expiry dates. However, there could be exceptions like Citi PremierMiles Card whose airmiles never expire.

Therefore, always keep an eye on the expiry dates of your reward points. If you don’t have any travels plans for redeeming your rewards points, use them to buy other services or merchandises before their expiry.

Bottom line

Go for travel credit card only if you incur sizeable travelling costs. If selected and used wisely, travel credit cards can significantly reduce your overall travel cost through reward points, cashbacks, discounts, free travel vouchers, complimentary air tickets, free lounge access, etc. Also, ensure to redeem their reward points and free vouchers before their expiry date.

The writer is Head of Payment Products at Paisabazaar.com.