The 9 Costly Blunders New Travel Credit Card Members Make
A good travel card in the UAE not only opens the doors to international exploration, but it also provides the cardholder with a sense of security and comfort no matter where they are. Travel cards in the UAE and the world alike are often treated as the most premium type of card, simply due to the incredible variety of insurance, travel and lifestyle advantages that they offer. In fact, the luxuries that a travel credit card offers go well beyond global access to funds, they also include discounts on local attractions, a chance to earn free airline tickets and much more.
But what most applicants of a travel card in the UAE do not realize is the massive importance of first understanding how the card’s various terms and conditions come into play before actually applying for it. In the following article, we shall discuss the 9 most common blunders that new owners of a travel card in the UAE typically make.
New and experienced cardholders alike should make sure they do not fall victim to any of the following blunders, lest they miss out on the full potential of the various travel credit card offers:
Right Place. Right Time.
With the ease of availability of information regarding various travel credit card offers and benefits, there is simply no reason that applicants should make any decision without first comparing travel cards in the UAE. In fact, many travel credit card offers are also valid only during certain times of the year. Applicants should refer to the many available online platforms for comparisons of travel cards in the UAE in order to scope out the best time to apply.
Those who already own a travel card in the UAE, or any other type of credit card, will be aware of a stringent set of conditions that most card offers come attached with. Simply put, if a travel credit card offer seems too good to be true, it very likely is. Take the example of a welcome or joining bonus travel credit card offer. Such offers promise a set number of rewards points, cash back or even statement credit as soon as the customer successfully completes their application for a travel card in the UAE. However, most such welcome offers are further contingent on meeting a spending requirement within a stipulated period of time. Welcome bonuses are some of the most generous examples of a travel credit card offer. As such, customers should be certain they will be able to fulfil the stated requirements when applying.
There is a famous saying that holds especially true for travel credit card offers; ‘All that glitters is not gold.’ When it comes to redeeming earned air miles or rewards points, the most obvious prize may not always be the most sensible one. The most crucial factor to consider during the redemption process is the actual AED value of the redeemed items. Most card issuers would prefer owners of a travel card in the UAE to exchange their accrued points for retail vouchers and other such merchandise. However, as a general rule of thumb, most travel credit cards offer the best value for money on airline tickets and even more so on flight upgrades.
The Bad Kind of Interest
Every single travel credit card offers the option to make a ‘minimum monthly payment’ in lieu of repaying the entire outstanding balance amount at once. These minimum monthly payments can be as little as 3% of the card’s outstanding balance or AED 100 as per the bank’s discretion. However, even despite making this small payment, cardholders are still liable to pay interest on the whole outstanding balance. The interest may seem like a negligible amount (ranging from 1% to 5% for the month), but over the course of the year this very same interest takes on a massive figure of 30% or more. The only way to avoid interest on a travel card in the UAE.
Mark the Date
Most travel credit card offers also carry date restrictions. These can occur in the form of ‘Expiry Dates’ and ‘Blackout Dates’. Expiry dates, as the name suggests, is the period of time for which earned rewards and air miles are valid. Air Miles usually are usually valid for 2-3 years from the date they were earned. Blackout dates, on the other hand, are specific times during the year when rewards based travel credit card offers and air miles are not valid. These usually occur during popular travelling times such as holidays and summer vacations.
The way that travel credit card offers usually work is by rewarding cardholders with reward points or air miles for every AED 1 or USD 1 of expenditure made with the travel card in the UAE or internationally. The earning parameters differ per spending category, where grocery, real estate, fuel and other such expenditures offer the smallest earning potential. Most of these travel cards in the UAE also impose ‘caps’ or limits on how much a cardholder can earn on each category of expenditure. Responsible cardholders will try to earn rewards across all categories of expenditure and ensure they make the most use of their card.
Ask & You Shall Receive
Most travel credit cards offer their various incentives in return for an annual membership fee. Depending on the level of travel benefits and coverage offered by a travel card in the UAE, the annual membership fee can vary from a few dozen Dirhams to upwards of AED 1,000. A lot of cardholders are completely unaware that this annual membership fee can be brought down by simply contacting the card issuer’s customer representatives. The customer care staff will analyze different factors such as the amount spent on the card and how long the cardholder has been a customer of the bank/credit card issuer.
Spend to Earn
In order to avail of some travel credit card offers, cardholders will be required to meet a spending These spending requirements are further restricted to pre-defined spending categories. Owners of such a travel card in the UAE should carefully plan out their spending habits to ensure they meet the required expenditure amount within the given time. Cardholders may also try to club together multiple travel credit card offers to clear off spending requirements in one go itself.
An Unfavorable Exchange
While most travel cards in the UAE have foregone the practices of charging a foreign transaction fee, there remain a select few cards that carry exorbitant fees on international purchases. Another problem that a travel credit card offers in terms of foreign expenses is the Dynamic Currency Conversion (DCC) feature. The DCC feature is one found on many travel cards in the UAE and should be opted out of if possible. Under this feature, all foreign currency transactions are converted into local AED and then charged. However, the exchange rate used for DCC-enabled transactions is usually exaggerated and as a result, ends up costing the cardholder a lot more.
Having experienced a brand new world of exciting travel credit card offers, cardholders will feel incomplete travelling without one in their wallet. Customers interested in a travel card in the UAE should keep the above-mentioned points in mind for smooth spending experiences.