Globetrotters Guide to Credit Card Advantages

Imagine getaways from the heat and bustle – Enjoying the cool breeze strolling down the Mall in Shimla, trekking in the high peaks of Nepal Himalayas, living up life at the Big Apple New York, savoring the street delicacies on offer in London or shopping for the latest fashion in Milan. The life of a Globetrotter or even a part time one is the stuff of dreams. Travel almost always charges one with a feeling of exhilaration, discovery and escape.

Indians are a fast growing part of global tourism flows. Increased economic empowerment, better jobs and income, low cost air travel, availability of easy debt, rising aspirations and opening up of travel and tourism opportunities for the average Indian, has meant new vistas to explore and new experiences to curate and share with friends online and offline.

Whilst traditionally travel and tourism was funded from own savings or awarded as gifts from friends and family, recent times have seen a surge of personal debt based financing of such activities. Easy availability of loans and limits on Credit Cards has allowed the aspiring traveler to leverage these platforms for ensuring seamless and smooth travel planning.

Hence, planning a vacation prudently has become a norm to ensure a great travel or vacation. Usually this involves deciding on the destination(s) and preparing the travel itinerary with air/train travel schedules along with hotels and stay options. Since most of this information comparison and booking happens online, increasingly electronic ways of payment and financing are growing in prominence, with their range of rewards, easy payment options and loans. No longer does one have to wait for savings to be enough to be able to sling the backpack and head off to the hills.

Whilst there are many options available for financing personal travel, two of the more popular ones include taking an Unsecured Personal Loan or leveraging a travel branded credit card. Before understanding the benefits of credit cards, a short appreciation of personal loans is appropriate. Personal loans (typically ranging from 50,000/- and going up to 30,00,000/- currently at quite competitive interest rates starting 10.99% per annum) are generally easy to raise; in just 24 hours at times; and at terms which can be customized as per individual’s need such a tenure of 3 years or 5 years or with options such as convenient pre-closure. These loans require limited documentation and no collateral.

Turning to Credit cards, over the decades, it has emerged as an important financing option for travel and tourism activities. So much so that several well know travel co branded credit cards offer focused and significant benefits on travel expenses. These could range from discounts on hotel bookings, cash backs on international travel bookings, special rewards basis the amount spent and accumulation of swipe reward points.

The ongoing trend of credit card usage by travelers is to use the same for airline / travel / hotel or stay bookings and using it as a reserve / dip in fund during the actual travel abroad. The unique feature of Credit Cards is that it acts as a relatively safer financial cushion and its universal acceptability till pre-defined limits allows one to use it for any routine or unforeseen expenses while travelling (as against local currency for instance, which can only be carried in relatively smaller amounts). However, it always helps to know the additional charges that a card issuer levies on foreign currency expenses (which are chargeable if the card is used outside India), to know the total impact of the credit card spend.

Furthermore, several levels of security and card holder data protection covers against risk from theft, if any. Whilst losing or misplacing a Credit card, may be charged upfront depending on the card issuers policies, but usually long term card holder’s interest are protected by the issuer.

The other benefits include travel protections such as reimbursement on lost luggage, insurance on travel accidents, travel emergency assistance services; which are offered exclusively along with such type of credit cards.

In conclusion, whilst traditionally, one’s savings primarily funded travel and tourism , in recent times, there has been a growing role of credit cards and personal loans to fund such activities. Especially because every time a card is swiped; along with it come cash backs, extra miles, rewards and discounts. Such offers and rewards are like a cherry topping on a delightful vacation!

To know more about such cards and offers please refer to our credit card webpage and for further information specific to such co branded travel cards,