Going cash-lite for more agile travels

ILLUSTRATION BY RUTH MACAPAGAL

Some people spend their weekends or long breaks curled up in their beds, reading a new book off the shelf or watching a cozy film while nestled under a warm blanket. But 28-year-old Mef Marzan has other plans.

During her much-awaited time off from work, she travels to places that provide her comfort and leave her in awe, a stark contrast to her buzzing life as a manager and communications professional.

“Nothing comes close to being transported to a different place,” Marzan tells the Inquirer. “Whether familiar or unfamiliar, travel allows you to disrupt your everyday patterns in the best way possible.”

Of course, traveling entails a lot of expenses, from booking flights and hotels to paying for food and souvenirs.

It is for these purposes that Marzan, who has recently been to Bohol province, mainly uses her credit cards.

Despite a high interest rate environment, she often chooses card transactions for her travel expenses, as these offer safety and convenience, seeing that she will not have to scout for ATM machines just to withdraw cash.

According to the Credit Card Association of the Philippines (CCAP), frequent flyers like Marzan are in a “unique position to benefit from the robust growth of the credit card industry.”

READ: Credit growth picked up pace in Feb, fastest in nine months – BSP

“Credit card companies constantly release new products and programs specifically geared toward travelers, allowing them to earn points or miles quickly, gain access to airport lounges, and obtain other perks that improve their travel experience,” says Alex Ilagan, CCAP executive director.

This is among the reasons why Marzan uses her credit cards during travels. In fact, she uses one specific card that was advertised as a travel card, with perks that are mostly travel- or experience-related, like hotel discounts.

For purchases, she uses a lifestyle card with shopping-related benefits.

Paolo Balderia, who travels to at least two countries or destinations a year, was able to use the points he earned to purchase tour packages during his recent trip to Hong Kong.

His card also came in handy when running low in cash abroad.

“For me, credit cards serve as a lifeline, particularly for unplanned purchases,” Balderia says.

Not created equal

However, CCAP, whose members are composed of the country’s biggest banks, warns that “not all credit cards are created equal,” and that consumers need to find a card and reward categories best suited to their spending habits and travel needs.

For example, travelers who are loyal to a particular airline or hotel chain may want to consider finding a credit card brand with an existing partnership.

READ: Credit cards essential for ‘adulting’

“With a credit card co-branded with an airline, one earns more points when making purchases with that partner airline. These points can be redeemed for flights,” CCAP says, adding that cards can likewise enhance the travel experience with free perks like hotel room upgrades.

The group also warns against choosing cards with “a confusing and long-winded redemption process” that could make a cardholder hesitant to redeem rewards.

Beginner-friendly cards with simple point-earning systems are recommended for first-time travel credit cardholders, as these do not necessarily require them to be strategic in their usage.

Many cards also offer sign-up bonuses for clients who can meet a minimum spend requirement within a certain period upon card activation. CCAP explains that this is “a good way to jump-start one’s point earnings, allowing them to redeem rewards much faster.”

Conversion fees

Traveling to other countries also means possibly facing high currency conversion fees.

In dealing with this, CCAP says travelers should compare various cards and look for ones with the lowest fees.

“This way, one can shop abroad worry-free and keep their credit card debt manageable,” it adds.

In all, credit cards provide convenience and flexibility for whoever holds one while, of course, figuring out how to manage debt and protecting oneself from scams.

But despite the headache of being slapped with a huge bill by the time you come back home, travelers also see it as a way to maximize one’s travel experience.

“While I often stick to a budget, indulging a bit can sometimes be hard to resist, especially when considering the possibility of not returning to that place,” Balderia says. “Credit cards allow me the flexibility to seize such opportunities.” INQ