These are uncertain times: 5 months of pandemic already and it will not go away anytime soon. Covid has eaten away at summer vacation this year; everyone was forced to reschedule the trip, except critical. While it is not safe to plan unnecessary travel until the pandemic is under control, one can spend wisely to earn nearly free vacations once travel resumes. Yes, you read that right – free vacations!
Credit cards, especially travel benefit cards, when played well, can be very rewarding. There are over 150 variations of credit cards at 28 banks available in India; Over 25 cards offer travel benefits.
The best travel maps are below. Go choose the card that suits you the most.
Air India SBI Signature Card
Ideal for big spenders, this card costs Rs 4,999 (+ GST) per year. The card is optimized at 20 lakh spent per year, which allows the cardholder to accumulate at least 200,000 Flying Returns miles equivalent to 6 Delhi-Singapore tickets or 20 Delhi-Mumbai one-way tickets on the Air India network. Miles can also be redeemed for Star Alliance members, but the appeal varies by airline. Points are accumulated on all expenses (ex wallets) regardless of the merchant category. Additional benefits include 8 free visits to domestic airport lounges per year. No special privilege from Air India is a drag, but it is easily offset by other benefits.
Club Vistara SBI Card Prime
Ideal for moderate spenders, this card costs Rs 2,999 (+ GST) per year. Spending is optimized at 8 lakh per year, which earns the cardholder 9 one-way Vistara tickets (5 Premium Economy + CV miles equivalent to 4 Delhi-Mumbai tickets). The cardholder also receives a Yatra hotel voucher of 10,000 for reaching the spending milestone of 8 lakh. 12 visits to airport lounges (8 national + 4 international) are free each year. The cardholder also benefits from a free membership in Club Vistara Silver which offers benefits such as separate check-in counters, 5 kg of additional baggage, etc. Points are accumulated on all expenses (excluding wallets), regardless of the merchant category.
HDFC Bank Diners Club black credit card
More of a lifestyle card, Diners Black still offers some good travel benefits to get a place on this list. Although the perks have been gradually reduced over the past year and are now paltry compared to what they were before, this super premium card still has a big impact.
The card is billed at 10,000 rupees per year (+ GST; exempt on annual expenses of 5 lakh) and offers base rewards equivalent to 3.3% on all expenses (old wallets and EMI). A cardholder can earn up to 10 times more rewards (33% value) on the HDFC Bank “SmartBuy” portal capped at 7,500 points per month. SmartBuy offers a wide assortment ranging from Amazon, Flipkart, over 100 branded vouchers and travel bookings. Reward points can be redeemed for travel subject to a cap of 70% of the value of the reservation. Cardholders also get a number of free subscriptions like Zomato Gold, Times Prime, Amazon Prime, etc. Upon reaching the spending threshold of 80,000, the cardholder has the right to select 1,000 merchant vouchers each month. The cardholder gets unlimited lounge access and limited golf privileges. The profit quotient of this card is directly proportional to the quantum of 10X rewards transactions. This card is best suited for big spenders with a minimum annual spend of 10 lakh with at least 25% 10X rewards. A huge handicap is the limited acceptance by merchants for Diners Club cards.
American Express Platinum Travel Credit Card
A simple non-airline card with good travel benefits, suitable for small spenders. The annual fee of Rs 3,500 (+ GST) and the optimal benefits translates into an annual expenditure of 4 lakh with travel vouchers worth 15,800 and a Taj Hotels voucher worth 10k. The card holder also benefits from 4 free visits to the lounges per year. No reward points on fuel, insurance, utilities, and point-of-sale EMI conversion. Like Diners, the low acceptance of American Express cards by merchants plays a role of spoiler.
The above cards, when used on their own or in smart combination with other credit cards, can lead to accelerated rewards and significant savings on travel. Customers should divert all their spending to different credit cards for maximum benefits. If they fail to meet spending milestones, I recommend cardholders explore paying rent through various websites (Cred, NoBroker, etc.) where the only requirement is bank account and details of the PAN of recipient with money instantly credited. These websites charge a fee of 1% to 1.6% offering a direct rewards arbitrage opportunity as well as a 45 day free credit period. HDFC and SBI also have many other merchant refund offers etc. over American Express and therefore are preferred. These dream vacations are much closer than we think, they just need smart planning and spending.
(By Ashish Lath, Vice-President-Strategy & Marketing, Clix Capital)
Disclaimer: This is the personal view of the author.