Who wouldn’t want to? But how? The good news is that I now know someone who does that all the time.
I got to know Saakshi and her husband, Ajay, as clients and when I first met them, the conversations kept gravitating towards places to see, eat at & shop from. I realised that there was a traveller hidden there. This caught my attention and what Saakshi told me then blew my mind. She travels international and that too for low or no spend. Tickets and hotels are paid off, hold your breath, only by credit card reward points.
How could that even be possible? She told me all, in this free-wheeling chat and I am happy to share it with you here. Let us all fly, free and to be Free!
Who are you?
Saakshi: I usually like to define myself as a Marketer, a Sous Chef, a Deal Digger, a Nomad, a Dancer, a Conversationalist, a Mentor, a Friend, an Author, a Student & a true-blue Middle-Class Indian.
You caught me on “Nomad”, which probably also means, you love travelling?
Saakshi: Traveling should be my middle name. My father is in a transferable job & I have lived in around 12 cities like Jammu, Nazira (Assam), Surat, Mumbai, Bangalore, etc. In fact, to date, I never let myself get too comfortable in one place. I usually switch houses to live in a different area if I end up living in the same city.
You are a certified Nomad then. Now the big question. You told me that you have been travelling using only your credit card reward points. That literally means free. Sounds like a scam! Help me understand this. You really do it?
Saakshi: Don’t worry; it’s completely legit. Although I have always dreamt of going around the world & stay in the fanciest of the hotels possible I never had deep pockets plus my monthly expenses are really high. So, being the Marwadi I am, I started scouting for hacks that I could implement to realise my dream & yet not compromise on my hard earned savings. I have been halfway around the world with this. I have travelled to countries like Singapore, Philippines, Indonesia, Thailand, Sri Lanka, Malaysia to name a few.
Wow! That’s awesome. But tell me, this must also mean having a few lakhs of credit card reward points. How do you even get all those points?
Saakshi: Amassing reward points isn’t a challenge. We need to find the right credit card basis our spend types & it will give you a lot of points for every swipe or spend. Also, you don’t need to have lakhs of points to reap in the benefits, need to be smarter with your card & trip planning.
Give me more on this. What does being smarter with your card mean? – What is the best way to accumulate reward points? Can you give us details of one trip that you planned?
Saakshi: The best way to accumulate points is to replace any other payment form with your credit card. You will get points for every spend & credit card companies run a lot of promotions, so the likelihood of receiving 10x more points is substantially higher too. Now you can also get rewarded for paying the credit card bills on time.
There are some things you should be aware of while planning the trip:
- Try to plan at least a quarter in advance. The sooner you plan, the better rates you get.
- Always & I repeat, always use an incognito mode to check all your fares. The sites have cookies & they increase the prices on a certain route based on your search history.
- Planning a trip can be overwhelming & exhausting. That’s why planning ahead helps. You can take your time to research. Just like everything else have a checklist for this too.
I have shared more handy tips here.
Let me tell you about one of my favourite trips.
It actually was the first time I tried to combine 3 countries in a single trip. Our destinations were Vietnam, Malaysia & Thailand. We usually decide on the part of the world we would like to visit & let everything else unfold itself.
We shortlisted the cities we wanted to see in Vietnam. Langkawi was on my mind for a while & it made sense to add that to the trip due to the proximity. We ended up adding Thailand too, although we have been there thrice already as the flights were the cheapest to Bangkok & the connectivity from there to Ho Chi Minh city is pretty awesome. We usually finalize all the flights first depending on the best prices available post and then move onto booking hotels.
We do a general survey of the prices & also do a tally of the total points we have to optimize the usage. Since we always plan ahead, it gives us flexibility with the dates. Skyscanner & Kiwi are two portals that come in really handy for finding the best flights at the cheapest fares in your date range. Once the identification is done using these portals, we do the booking using the credit card portal. They are just like any other booking portal the only difference being you can use your points or a combination of points & money for the booking.
We have noticed that the hotel rooms booked using the card points are a tad expensive but they are usually the better rooms & are most likely to get you an upgrade.
Also staying loyal towards one hotel chain helps you in a big way. You can get free upgrades, better facing rooms & some other perks like an exclusive discount on spa, etc.
The wisest thing to do is to take stock of all the points you have, make a budget for the trip & then make the bookings.
So, it is not just about a few clicks. Planning is crucial. Saakshi, which credit cards are high on your list to accumulate reward points to fund an international holiday?
Saakshi: Well, I have used over 12 credit cards & I would highly recommend HDFC Diners Black. It gives you high value for every buck you spend & it has the lowest foreign currency markup too.
The other card that comes pretty close is HDFC Infinia Card. Apart from the rewards, you get an array of benefits like Vistara Gold Membership with a couple of upgrade vouchers, Taj Inner Circle membership etc.
The other two cards that come close are SBI Elite & IndusInd Legend card.
I wrote a note covering this card and others available in the market here.
Doesn’t that mean annual fees or minimum spends and other eligibility criteria to have these cards in your pocket?
Saakshi: There are at least 20 really good credit cards available in the market & it’s not a one-size-fits-all kind of a thing. I highly recommend spending some time researching to find the best card that fits your requirements. An online shopper or an avid traveller are two distinct profiles & hence your card needs to maximize the returns on your spending pattern.
Some cards come with annual fees, but it is totally worth it just because the rewards are far higher than the fees that you pay. Additionally, there is usually no minimum spend criteria if you are comfortable with the renewal fee.
Pro tip: Most of the banks forego your renewal fee/annual fee if you spend the minimum amount specified by them. If you think you won’t be able to utilize that amount, look for a card that has a lower threshold or no annual fee.
Let’s come to the other side. You would agree that it is easy to go wrong using credit cards… overspending, revolving credit, fees, interest and what not? Have you fallen too? How do you protect yourself from these?
Saakshi: When I first started using credit cards, my parents being the typical middle-class parents were strictly against it. It was royally announced that ‘I don’t need that thing if I need to buy it on credit’ & it does hold true for a lot of people who spend mindlessly, but if you are diligent with your spends & pay up on time, you are likely to get far more rewards.
One also needs to instil some amount of discipline; people are more comfortable with debit cards or cash as one would only spend what they had so the control was enforced externally. With credit cards, one needs a lot of internal discipline. I still keep track of my spends. Earlier I used to do it manually with every spends being recorded in my notepad but thanks to technology, there are a lot of apps that help you track all the spends with their category end to end. Not only this, they give you timely notifications to assist you in paying up on time to avoid all extra charges.
I am sure that discipline is very necessary. I am sure you are also saying that no revolving credit on your card spends. Timely payment is very important else it would take no time to enter a debt spiral.
Saakshi: Absolutely! It’s a very vicious cycle. As human beings, we do have the tendency to procrastinate. While it can work just fine for some cases, here it might weigh heavily upon you. It’s only fun till you have complete control over it.
Thank you Saakshi! You took me and I am sure all the readers on a flight of imagination, which they will soon convert into a real one. I am going to use all the ideas you have shared. Thanks again!
Saakshi writes about her travel experiences and credit cards on www.imbalance.com. Go take a dive.