Points To Consider Before Applying For A Travel Credit Card

Signing up for a travel credit card is a great way to save some cash while you are traveling. These cards are highly rewarding and enhance your travel experiences by providing reward points, travel-related offers and discounts, and much more exciting benefits. Some cards also provide additional benefits such as complimentary airport lounge access, free checked bags, and priority check-in at the airport.

Nevertheless, most of these credit cards come with comparatively higher annual and other associated fees. Travel-related credit cards offer exciting sign-up bonuses such as vouchers, AirMiles, and reward points. But, before applying for a credit card, it is imperative to understand the terms and conditions associated with it so that you can use it to your maximum advantage.

Also Check: List of Top Travel Rewards Credit Cards

Things That You Need To Consider

Choosing the right travel credit card for yourself is not really an easy task. You need to keep a lot of things in mind before applying for one. A few points to consider while applying for a travel credit card are as follows:

Your Credit Score and Eligibility

Before applying for a travel credit card, or any credit card, you have to check whether your credit score falls in the bracket of the required credit score range for the application process. Credit card rejections can decrease your credit score and become a part of your credit history and that is something that you wouldn’t want for sure. Therefore, if your credit score is below the required range, take some time to improve it before applying for the card of your interest. Apart from this, multiple other factors come into play when checking your eligibility. For example, your card application might be rejected if you have applied for too many credit cards in a short period. For that reason, it is important to read all the terms and conditions before you proceed with the credit card application.

Joining and Renewal Fees

Travel credit cards tend to have higher joining and renewal fees as compared to regular credit cards. The joining fee of some credit cards is as high as Rs. 50,000 or even more. Therefore, it is important to weigh the rewards, discounts, and other benefits such as air miles against the total of all fees that you’ll have to pay for a certain card. Only if you are a frequent traveler and your spending budget helps you in redeeming rewards that would outweigh the cumulative fee should you opt for a travel credit card. Although there are some travel credit cards such as IndusInd Bank Pinnacle World Credit Card which have a joining fee but no further annual fee, choosing cards that have an annual fee helps you accumulate rewards at a faster rate.

Type of The Card

There are two types of travel credit cards to choose from: co-branded or non-co-branded. Co-branded credit cards are offered as a product of the partnership between a merchant and a credit card issuer. These cards offer higher reward points when you spend on that specific partner brand and the points earned can only be redeemed against further spending on that brand. Axis Bank Vistara Credit Card offers 2 CV points on the expenditure of Rs. 200 and air insurance of up to Rs. 2.55 crore.

On the other hand, non-co-branded credit cards or brand-neutral travel credit cards offer better options for redeeming the accrued reward points. Also, the accumulated Airmiles can be used to book flight tickets for any airline. You can also use the points to redeem gift vouchers or shop at partner retail stores. If you are loyal to a particular travel brand and use it frequently, then a co-branded credit card is a better choice, otherwise, go for the non-co-branded card.

Sign up bonuses

Sign-up bonuses are offered by credit card companies to attract people to sign-up for their credit cards. These benefits can be lucrative as they offer additional travel miles, reward points, and other perks. Different credit card issuers may have different sign programs. Many travel credit cards offer sign-up bonuses which include free flights and hotel rewards, so take enough time to research the bonuses. Also, if 2 credit cards are offering 3000 reward points as a sign-up bonus, they may or may not be of the same value, as it depends on the redemption rate. The sign-up programs might vary all year long so it is important to keep an eye on the best offer that you get.

Additional Travel-Related Benefits

There are multiple travel benefits that credit cards offer and they vary from one credit card issuer to another. Some of the perks include lost luggage insurance, free checked bags, discounts, boarding the flight on priority, and complimentary access to airport lounges. Such benefits can be helpful for frequent travelers while other benefits such as dining discounts, fuel surcharge waivers, and renewal fee waivers can help you save through your travel card even when you are not traveling. Therefore, it is a good idea to take some time to compare these benefits and choose the travel credit card that suits your travel lifestyle the best.

Validity of Accumulated Reward Points and Airmiles

Different credit cards offer different expiry dates on reward points. Some credit cards offer no expiry date on reward points, which is an ideal bargain, whereas others let you use your reward points until a certain day. Certain credit cards such as Axis Bank Miles and More World Credit Card offer amazing rewards and the reward points do not have an expiry date. Hence, it is recommended that you read all terms and conditions of the credit card properly to avoid any misconceptions related to it.

Reward Redemption Rate

Every time you use your travel credit card, you earn a certain number of points/miles based on the kind of purchase you made. For example, when you use Axis Bank Miles and More World Credit Card, you get 20 points on every Rs. 200 spent. When comparing reward points, you should either look for a larger number of points accumulated on every transaction or if the number of points is less, then their redemption amount should be high. You should also look for credit cards that offer more reward points in the category that you spend often. For example, If you are a frequent traveler, getting 5 reward points on every Rs. 100 spent on travel would be more beneficial for you than getting 5 reward points on Rs. 100 spent on dining out.

Foreign Transaction Fees

If you use your credit card often while traveling internationally, you’ll have to consider the foreign transaction fees of the credit card while applying for one. This fee is charged when a user makes a payment to an international merchant or if the transaction is processed through a bank overseas. These are basically currency conversion costs charged by the banks. Generally, credit cards charge a forex markup fee of 3.5%, but for frequent flyers, some of the premium cards having a 2% or lesser forex markup fee would be a great option. If you frequently use your credit card for transactions overseas, it is ideal if you get a credit card with a low foreign transaction fee.

The Bottom Line

With a plethora of travel credit card options available in the market, it becomes important to understand your travel goals first and then take some time to research credit cards that would best align with your travel plans. You must consider all aspects such as annual fees, reward points, additional benefits offered, etc before applying for a credit card. Eventually, if you find a suitable travel credit card, it would help you in cutting down your travel expenses significantly. Just make sure to use your card responsibly and wisely to get the most out of it.