16 SEPTEMBER, 2022

Travel Credit Cards are an exciting option for travelers. They provide travel-related incentives and deals. Most of the features and advantages of travel credit cards allow for travel cost savings. Booking airline tickets and earning reward points are advantages of using a travel credit card.

Travel credit cards provide a wide range of advantages that cardholders can take advantage of while traveling. Travel credit cards offer a variety of amenities and benefits to meet the demands of regular travelers, including free airport priority boarding, greeting presents, and financial assistance to frequent travelers.

Present Credit Score

Checking one's credit score before applying for a credit card, be it a regular one or one for travel purposes, is a must. Credit scores determine whether one can actually apply for credit card. Without a healthy credit score, one's application might get rejected, leading to a further negative dip in the rating.

The applicant must know what their credit score is. Along with this, they must also read up on the general approval range for the travel credit cards they might be interested in. While there is no guarantee that the applicant would get approval in all cases, checking up on the credit score is a wise choice.

If an applicant finds themselves in a credit score range not suitable for the application of their ideal credit card, they can always work their way up. One can start by applying for a low credit limit offering card and gradually earn enough points. With more points and a higher cumulative credit score, one can apply for the travel credit card of their choice.

Eligibility and Documentation 

The requirements for applying for travel credit cards differ from bank to bank and from card to card. The minimal eligibility requirements established by several banks are listed below.

  • The applicant must be an Indian national
  • Either salaried or self-employed is appropriate
  • Must have a solid credit history
  • The minimum age should be 21, and the maximum age should be 60 or 65.

Similarly, different credit card users have varied requirements for the paperwork they need to approve a travel credit card application. 

The necessary paperwork can occasionally change depending on the sort of application. 

Below is a list of some of the usual paperwork needed to apply for a travel credit card:

  • PAN card copy
  • Aadhaar card copy
  • One or more passport-sized photos
  • The last two to three months' Salary Slip or IT returns
  • A document containing your current address, such as an Aadhaar, voter identification, driver's license, passport, etc.

Upgrade Opportunities of Existent Card

Spending the right amount of money within a short span of time. This happens to be the ideal point-earning ritual for most travel credit cards. If one is looking to upgrade their travel credit card or their existing one to a more reward-oriented card, one must look into the timing of their spending. 

One can spend large sums within a short window – earning bonuses and opportunities. A shorter spending span and subsequent timely repayment are likely to be reflected in the spending pattern of the borrower. The financial institution would then consider granting a high reward-oriented travel credit card as per the borrower's need.

Renewal Costs & Other Charges

While applying for a credit card, the applicant must take note of all costs related to the maintenance of the card. Almost all financial institutions offer a "first year free of cost" card to the borrowers. Such cards start incurring renewal charges from the second year onwards.

The applicant must be thorough on these matters. Apart from renewal charges, they must cross-refer from the authorities that there are no additional costs. Additional costs include hidden costs, transaction charges, and penalty charges to name a few. Before applying, the applicant must ensure that they are aware of all charges and amounts related to the card.

Active Rewards Earning System

While the sign-up bonus is definitely significant, choosing a credit card shouldn't be based solely on it. For every rupee spent on a card, one will receive points, although the number of points they receive will vary depending on the card and the purchase being made. It's crucial to obtain a card that one can utilize to its full potential.

Typically travel rewards cards contain at least one extra segment, or a category that will yield more points per rupee. Whether it be 4 points for 1000 rupees spent on food items, or 3 points per 1500 rupees spent on travel goods, etc., there is likely to be a consistent structure governing the same.

Travel Related Perks

A travel credit card without the availability of travel related accommodations is of no use. The majority of travel credit cards provide free access to airport lounges both domestically and abroad. During flight delays, cardholders can unwind at a few airport lounges and take advantage of its amenities without paying a dime. Some lounges let guests and family of the cardholder enter for free.

In addition, some travel credit cards offer all-inclusive insurance coverage, shielding the cardholder from unplanned costs that can result from an airplane disaster, a medical emergency, the loss of luggage, a lost passport or ticket, to name a few.

Some additional perks to consider before applying for a travel credit card, includes the following: 

  • Bonus air miles after the completion of a certain expenditure target
  • Complimentary membership in various airport and airline initiatives 
  • Both domestic and international airports offer free lounge access, an all-round access to them.
  • Accelerated reward points for spending on travel-related items 
  • Redeeming reward points for air miles 
  • Offers for cheaper rates of airline tickets 
  • Priority check-in with affiliated airlines 
  • Additional space for extra bags and luggage's one might be carrying.

Thus, Travel Credit Cards are one of the most efficient ways of using credit to fund one's dream travel expenses. With the help of them, one can visit their dream destinations, all around the globe – all while enjoying a wide range of benefits and perks.

They not only facilitate travel but also improve one’s overall credit rating.

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Disclaimer: This Article is for information purpose only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank make no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.

Disclaimer: This Article is for information purposes only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. The Bank makes no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Article. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from the Bank. The Bank, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein. Tax laws are subject to amendment from time to time. The above information is for general understanding and reference. This is not legal advice or tax advice, and users are advised to consult their tax advisors before making any decision or taking any action.