Travel With Your Job 3: How to select a Travel Credit Card, and the one we use.

We have all been duly warned about the dangers and pitfalls of credit cards. Why is it then that most of the travel hackers and experts swear by their favorite cards and some even recommend getting multiple cards. There are a few reasons for this

Everything in moderation and control can yield good to great results. Anyone who buys within their spending limits but routes it through heir credit card is going to do good no matter how bad the credit card fine print is.
No body tells you to buy run of the mill credit cards. The cards recommended are specific and suit one purpose or another.

Why should I get a credit Card?

Credit cards as their name suggest are a way of taking money from the bank for a small predetermined time, specified in the credit card agreements as billing cycle. These cards allow you to earn interest from your money and while receiving kickbacks for using the card. My first card was way back in 2010 when I needed it to book our honeymoon tickets. Completely oblivious to how it should work I would put money back in the card as soon as I spent anything. I never got in debt but I never used the card and its facilities to their fullest potential.
If you direct 10000 worth of expenses through your card and have to pay it back 40 days later you can earn around 30 bucks or so in interest. Someone good at accounting can probably give you an exact figure. Most of the cards provide much more incentives than just saving some interest.They might offer a 5% cash back, movie tickets or air miles which happen to be something most of us travelers are lusting after all throughout the year. If you still do not believe what I am saying let me tell you we flew from India to Sri Lanka and back for just 4000 combined because of the miles our regular expenses had saved us just like return flights for two people to Andaman cost us around 12000 while our friends had to pay over 13000 each for the same flights. We have taken multiple free flights in last year all because we found and use the right credit card and this is not including all the ones we paid half price for, like the one from Mumbai to Hyderabad in August while coming abck form Diu.
Did I mention it also gives the holder free access to many airport lounges around the country?

How can I select a credit card?

There are a few criteria to select a credit card which can best suit your requirement which stay true for any par of the world and any purpose. To decide on a credit card to buy look at these major points.

Annual Fees

This is perhaps the smallest of the criteria but it can be considered to be the biggest deal breaker for many. A free for life credit card is going to do nothing for you, you will not see flights or or that matter even get you a discount on a eCommerce site. As with most of the things in material life you get what you pay for. We pay 3000 a year for our card and it has more than made up for over five years of fees in past fifteen months. If you are still hell bent on the free card, go through the pointers below and then choose your card.
Another factor to remember is the waived off fee, which means when you accrue certain amount of expenditure on your card in a year they will waive off you annual fee. Just like fees is a deal breaker or many this clause is usually a deal breaker for me. What if for whatever reason I did not meet the amount and had to pay up the fees, more often than not these cards do carry a bigger fees one such I know of comes for 5000 a year double of what we currently hold but you can get it waived off if you spend 400000 or more in a year. If you are committing to these cards always consider the annual fee in you expenditures if it is waived off take it as a bonus.

Purpose of the card

Why do you want a credit card? Is it just because you want to have a means to pay at places where there is no other paying option, or you are looking to gain something from owning the card. If you are looking for the former it is best to go for lifetime free cards which offer minor discounts and offers along the way without burdening you with the  fees. If you are looking to get more out of the card ownership it is time to define exactly what you want and how yo wish to utilize the card.

There are card for everything from airlines to major shopping chains and some with their own points store where you can buy stuff for free once you have accumulated enough points to qualify through your spending. If your biggest expense if gas you might want to go ahead and look for a card which gives you free petrol. There is nothing better than leveraging your mandatory expenses to help reduce them and make your money stretch. No matter what way you save up it is finally going to go in the same kitty. One of my friend has a card which gives them loyalty points for a famous shopping chain, for him it means easy and cheaper shopping. There is no right purpose and you can want anything from free movie tickets to free flights it's all on you.

Kickback totals

This has to be the most important of all factors which should direct you towards a suitable card. Why? Because this is the reason why you are getting a card in the first place.
The card we own gives every new enrollment bonus 10000 miles which translate to 5000 Rs for a fees of 3000 Rs a year this doesn't seem like a bad deal. Additionally you will still be earning miles and getting those free flights. If you  do not want to take matters to next year feel free to cancel the card before your renewal date and use up your miles too.

Similarly there are cards which give you free nights at a hotel or a straight away domestic flight calculate what the total kickback as are worth and then you shall have the winner. Most of the benefits of the card in question are related to your original purpose that you defined in previous point. Remember there is nothing wrong in holding more than one card as long as the benefits are in your favor and they serve a purpose.

If you are in US or hold a US address options are many and have been discussed in great lengths by many renowned travel hackers from The Points Guy to Nomadic Matt. But if you are in India not only are the available options too few and miserly they are usually not discussed in detail.

As we started travelling more in 2013 we were on a lookout for a good credit card which could get us the benefits I would hear everyone talking about but still fit our pockets. This meant we needed travel related cards but not those which had over 5000 as a yearly fees. There were a few cards that we considered mostly from the banks we had used over the years but we decided on Citibank Premier Miles to be the card of choice. If you are interested in other options or if for some reason you can't or won't get a Citibank card go ahead and have a look at the comparison here, a handy tool would be this calculator by the same person.

Lets go ahead and see how this card did on our criteria scale.

1. Annual Fees 

The card has an annual fees set at 3000 which though a bit expensive wasn't something that we couldn't afford, or would burn a big size hole in our pockets.

2. Purpose of the Card

We were looking at travel card specifically those which would help us get enough miles for a few free flights in a year. We also wanted the liberty to not be chained to one airlines and have the option to book from whichever one was cheaper or had better deal going on. Additionally if we could use or convert those miles for hotels and other transport options that would be a plus. This cut out most of the other travel cards because they would bind us to one airline or another. This card allows us to book our tickets through various sites and rewards us with miles as well as allows us to redeem them on various sites including a dedicated portal.

Additionally we can use the miles to pay for hotel rooms and buses too. All in all a good deal for us with flexibility and freedom of use across various sites.
Another one of our criteria was to easily earn miles which is what this card gets you, this card makes it very easy to earn miles from your daily expenses and you get accelerated miles with most of the travel expenses.

3.Kickback Totals

Even though I call them kickbacks these benefits are the reason why we are interested in buying the card. Credit card is now not just a means to pay for your online expenses or delay paying for stuff you bought today it is a means to get the luxury you have been looking forward to.

Joining bonus and annual fee

This card gave us 10000 joining miles which translates to 5000 Rs for a joining fees of 3000 so it was a no brainer 2000 Rs earned by spending first 1000 on the card within 60 days. Every subsequent year you get 3000 miles whenever you pay your annual fees basically reducing the annual fees to 1500.

Earning miles

We earn 10 miles for every 100 spent on flights and some partner sites which include even online clothing and other shopping sites. For all other regular expenses we get 4 miles for every 100 sent. As a thumb rule we spend around 20,000 a month in groceries and around 10,000 quarterly in flights and other partner sites which gets us 3400 miles every quarter. In addition to this we also route our insurance through the card and most often we are the people who pay the bill and later split it with friends giving us around 1,00,000 in other expenses over the year. This comes to around 4000 miles earned a year or around 3900 miles every quarter. In one year we make 7,800 in actual money which we can then use to buy our free flights. Combined with 3000 miles earned for annual fees this the total comes to Rs.9300 which is more than three times of the annual fees we pay.

We usually try to book flight tickets for friends and family which helps us to get even more miles without spending any money.

Other benefits

The card allows the primary card holder to access multiple Airport lounges around the country for free. Our regular debit card also lets us access many of the same lounges but the card includes many more lounges and we have many a times saved over 500 per person by stuffing ourselves full in these lounges. With all the flying involved I would put this benefit at around 3000 a year at-least.

The kickback or benefit total for the card comes around 12000 a year which being a 300% profit over the 3000 Rs annual fees is a good deal.

Other factors we haven't used yet

Citibank allows you to convert your premier miles to other airline miles at quite a good rate more often than not these are converted at 1:1.

Cons of the card

Even though I love the card there is definitely one point which I find can be a disadvantage compared to regular airline miles. As the miles earned are directly related to money with a ratio of 1 mile=0.5 .45Rs it can be a problem when flight prices are too high. In most airline the miles required to fly a sector remain constant as long as the seats are available, but in premier miles you can end up paying considerably more if you do not book on time.

You can apply and get more details for the card here.

What credit card do you use? Are you now convinced to use a travel related credit card?

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