4 ways to use Credit card rewards for vacationing!

The temperatures are soaring and mangoes have made an appearance in the market place. Summer is officially here. It’s time to pull out the large hat, put on those shades, pack that bag and head to some cooler place. If the hot summer sun isn’t an excuse enough, then well your credit card rewards definitely are! Make the most of summer and your reward points while planning your vacation this time around.

If you do not own a credit card currently, don’t worry. Reading this article will help you decide which one you need to apply for to avail maximum benefits as per your lifestyle. However, one must keep a track of the CIBIL score and work on maintaining a satisfactory score. The reason being, credit card companies do factor in the data in your CIBIL report and check your CIBIL score while issuing credit cards. Using a credit card regularly and smartly helps accumulate reward points which can be planned and used resulting in direct savings! Vacations are a great opportunity to reap the benefits of reward points as well accumulate further points. Let’s see how that works.

1. Signing up is a good idea sirji!
If you are indeed considering signing up for the credit card and availing benefits during this year’s summer vacation, it is a bit late. But, it is never too late to join the party. While it would have been ideal if reward points were accumulated by now, there are few credit cards which offer miles, points or hotel stays while signing up. For example, the Standard Chartered Emirates Platinum Credit Card offers 27,500 bonus skyward miles on enrollment. Air accident insurance is complimentary with this card, which is worth Rs 10 million. If you fancy airport lounges, then priority pass for over 600 lounges comes with this card. Benefits from some cards can actually translate in getting a ticket or two free! For example signing up for the Jet Privilege HDFC Bank World credit card can waive off the base fare for one domestic Jet Airways ticket. Also, they offer 10,000 bonus jpmiles as welcome benefit. The New American Express MakemyTrip credit card is offering welcome vouchers worth Rs 9,000 that can be redeemed on the travel website. What’s not to love? A joining fee may be charged while signing up for a credit card. However, many companies are now waiving that charge if customers sign up online. Do check on that while you sign up for a credit card.

2. Reward yourself wisely
Gaining reward points is not enough. One needs to plan wisely for spending the reward points to gain maximum benefits. After you have a vacation plan ready, decide which parts of the vacation you would like to cover using the reward points. Broadly it is divided into travel fare, hotel stays and dining out. Now assuming you decide to book the flights using your credit card. Check on how many miles would it take to avail the reward. While doing so, don’t ignore the airline service and other things which can potentially spoil your vacation mood. For booking stays, check on the properties around your vacation spot. Once shortlisted check on how many points would it take to book the stay reward. It is difficult to cover the entire vacation expense through reward benefits. But using it wisely will definitely help in saving a handsome sum of money.

3. Let the card pay for luxury
If you believe in travelling with style and living life king size, then there are a couple of credit cards that will interest you. For example, the Citi Prestige credit card gives away vouchers worth Rs 10,000 from the Taj group or ITC hotels every year. Complimentary stays at exquisite properties around the world and benefits from an elevated status on the loyalty programs of global partner’s opens doors to special treatment and additional luxury. Bonus airmiles and unlimited complimentary priority pass lounge access at over 700 airports are among the other benefits. Premium cards like these do come with an annual membership fee, which is slightly on the higher side. The Citi Prestige credit card annual fee is Rs 20,000. If luxury is on your mind, then the card member ship fee is comparatively a small price to pay.

4. Make your trip, make your choice

Rewards earned can be maximized by choosing the right credit card to pay for your travels. For example Air India SBI Signature card can enable you to earn up to 1,30,000 Air Miles every year. 20 Air Miles for every Rs 100 spent on Air India tickets. Whereas, HDFC Banks All Miles credit card offers 3 reward points per Rs 150. While the former charges an annual fee of Rs 5,000 plus taxes, the latter is life time free if applied through website. Foreign transaction charges are another factor to be considered before spending, if you are on a holiday abroad. Credit card companies charge anywhere between 2.5% to 3.5% of the total transaction amount as foreign transaction charges. Look out for credit cards, which do not impose these charges or go with the one with minimum charges.

While reward benefits definitely help you make a choice, other factors like travel insurance benefits, travel accident insurance, lost baggage insurance, etc. must also be considered. With so many credit card options available in the market to choose from, one must not ignore the importance of maintaining a credible CIBIL score so that availing the best credit card option becomes a cake walk. With so many benefits listed, using a credit card is a lucrative option. Needless to say spending wisely and repaying responsibly is very important to continue saving and availing amazing offers in the future as well. Happy vacations!

About the author: Rajiv Raj is the director and co-founder ofwww.creditvidya.com.