Thanks to budget airlines and affordable accommodations, more people can now travel without breaking the bank. Many individuals are also becoming more strategic with how they travel by waiting for low-fare sales, searching for cost-friendly destinations, and even exploring ways to make the most out of every peso spent. One option that often comes up in these conversations is the use of a travel-focused credit card.
This type of credit card is designed to reward users for spending on travel-related purchases like airline tickets, hotel bookings, and international transactions. These cards typically offer credit card miles or points that can be redeemed for various travel perks
But before you get caught up in the appeal of air miles and exclusive travel privileges, it’s important to pause and assess whether such a card is a good fit for your lifestyle and financial habits. In this article, we’ll walk you through some key considerations to help you determine if a travel-focused credit card is worth it for you.
1. Travel Rewards and Perks
One of the main advantages of a travel-focused credit card is the potential to earn rewards and access exclusive travel perks. As mentioned previously, these cards allow you to accumulate credit card miles or points for every peso you spend. Over time, these points can be redeemed for free or discounted airline tickets, seat upgrades, and more. Some cards also provide added benefits like free airport lounge access, travel insurance, and exclusive hotel privileges such as early check-in or room upgrades.
However, these benefits only add value if you actually use them. For instance, a card with free international lounge access may sound appealing, but if you mostly travel domestically or only once a year, you won’t be able to maximize or even use the reward at all. It’s important to review what specific perks are being offered and whether they align with your travel habits and preferences.
2. Your Spending Habits
Another critical factor is how your current spending habits align with the rewards structure of a travel credit card. Many of these cards provide higher points or cashback for certain categories such as airline bookings, hotel accommodations, dining, or international transactions. If your monthly expenses are already concentrated in these areas, then you can easily rack up points and take full advantage of the rewards program.
On the other hand, if most of your credit card spending goes toward groceries, utilities, or school expenses, then it might be harder to maximize your points. Additionally, consider how you manage your balances. Travel credit cards often have higher interest rates than basic credit cards. Thus, if you’re unable to pay off your balance in full each month, the interest charges may outweigh the value of any rewards you earn.
3. Annual Fees
Travel-focused credit cards in the Philippines usually come with annual fees that range from PHP 1,500 to over PHP 5,000, depending on the issuer and card tier. While some premium cards offer high-value perks that justify this cost, it’s still worth examining whether the benefits you’ll receive outweigh the annual fee.
Do note that some cards might offer to waive the annual fee based on a few conditions. However, it’s not a good idea to chase the waiver if you’re going to end up overspending.
4. Foreign Transaction Fees
When using your Philippine-issued credit card abroad or for online purchases in foreign currencies, banks often charge a foreign transaction fee, typically ranging between 1% and 3% of the transaction amount. While this might seem like a small fee at first glance, it can accumulate quickly throughout an international trip.
Fortunately, some travel credit cards are designed to minimize or eliminate this fee, making them more cost-effective for international travelers. If you frequently shop from overseas websites or travel abroad several times a year, a card that offers reasonable foreign transaction fees can help you save a significant amount of money.
5. Currency Conversion Fees
In addition to foreign transaction charges, there’s also the matter of currency conversion rates. Every time you use your card abroad, the transaction amount in the local currency is converted to Philippine pesos based on the rates of the credit card network (Visa, Mastercard, or American Express), plus any additional margins added by the issuing bank. These conversions can result in an inflated cost, especially if you’re not keeping track of exchange rates.
While some issuers are more transparent than others when it comes to conversion rates, it still helps to read the fine print or ask your bank for clarifications to avoid any surprises.
6. Point Expiry and Redemption Options
While earning points sounds rewarding, it’s also important to know how long those points remain valid. Some credit card rewards programs in the Philippines have expiration dates on points, while others offer non-expiring points as long as your account remains in good standing.
Redemption flexibility is another key factor. Look for cards that allow you to convert points into airline miles with both local carriers and international airline partners. Additionally, check if there are restrictions such as blackout dates or minimum point thresholds for redemption. A user-friendly rewards portal and quick processing time can also greatly enhance the experience, making your rewards more accessible and enjoyable.
So, is a travel-focused credit card worth it for you? The answer depends on a combination of your travel frequency and financial discipline. These cards offer undeniable value to frequent travelers who can maximize their rewards and perks, especially if they consistently pay off their balances and take advantage of features like lounge access or free travel insurance. However, if you’re someone who only travels occasionally, rarely spends in travel-friendly categories, or tends to carry a balance, you might be better off with a more general-purpose or cashback credit card.
Before applying for a travel card, take the time to compare your options and make sure that what you’re signing up for will truly benefit you. After all, the right credit card should make your journeys smoother.
