Travel Credit Cards Promise Perks And Free Upgrades, But Here's What They Don't Tell You

From free upgrades to complimentary lounge access at airports, customers are adapting credit cards with open hearts to make the most of their vacation.

Credit cards have lot of clauses hidden that can catch cardholders off guard, resulting in the trip being more costly than you intended.

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Credit cards have become increasingly popular amongst customers. By offering miles, rewards, and benefits for every penny spent on travel, shopping, and daily expenses, these tools have become a favourite as customers try to maximise the benefits of their spending.

One of the most lucrative rewards are the travel related perks that credit cards can provide. From free upgrades to complimentary lounge access at airports, customers are adapting credit cards with open hearts to make the most of their vacation.

While these perks can make travelling more comfortable and cost-effective, nothing good really comes free of cost. Similarly, credit cards also have lot of clauses hidden that can catch cardholders off guard, resulting in the trip being more costly than you intended. Let's take a look at what concealed charges your credit card might impose.

Foreign Currency Markup Fees

When swiping your credit card abroad, transactions are typically subject to a foreign currency markup fee, which can range between 2 per cent to 3 per cent of the transaction amount. This means that for every Rs 10,000 spent internationally, you could incur an additional Rs 200 to Rs 300 in fees. To avoid this, some cards offer zero foreign transaction fees. Therefore, it is advised that you read the fine print of your card properly to make sure that the bank is not levying additional charges on your spending abroad.

Annual and Joining Fees

Many travel credit cards come with hefty joining and annual fees, which can offset the value of the rewards earned. It's essential to assess whether the benefits provided justify these costs. Some cards, however, do offer significant travel perks without any annual fees, allowing cardholders to enjoy benefits without worrying about hidden costs.

Dynamic Currency Conversion (DCC)

While abroad, merchants may offer to charge your card in Indian Rupees instead of the local currency, a process known as Dynamic Currency Conversion. Although this might seem convenient, DCC often comes with unfavourable exchange rates and additional fees. It's advisable to always opt for transactions in the local currency to avoid these unnecessary charges.

Lounge Access Charges

Many credit cards advertise complimentary airport lounge access as a perk. However, certain lounges may impose small fees, service charges, or taxes depending on the credit card provider. It's important to verify the terms associated with lounge access on your card to avoid unexpected costs.

Reward Redemption Restrictions

Accumulating reward points is one thing; redeeming them is another. Some cards have complex redemption processes, blackout dates, or limit the categories on which points can be redeemed. Additionally, certain cards may have reward points that expire after a set period, leading to potential loss of accumulated benefits. It's crucial to understand the redemption policies and validity of reward points associated with your card.

Cash Withdrawal Fees

Using your credit card to withdraw cash from ATMs abroad can attract steep fees and higher interest rates from the date of withdrawal. This can lead to significant additional costs if not managed carefully. It's advisable to use debit cards or carry sufficient local currency to avoid these charges.

Service Taxes and Other Charges

Beyond the obvious fees, credit cards may also levy service taxes on interest, fees, and other charges. For example, using an outstation cheque to make credit card payments can attract additional service fees. Being aware of these potential charges can help in better financial planning and avoiding any unexpected expenses.

While travel credit cards offer numerous benefits that can enhance your travel experience, it's imperative to be vigilant about the hidden costs associated with them. By thoroughly understanding the terms and conditions, and selecting a card that aligns with your spending habits and travel patterns, you can ensure that the rewards outweigh the costs, making your journeys both enjoyable and financially savvy.