Who doesn’t love travel? Everyone delights in seeing new places, enjoying fresh adventures, and experiencing different cultures. But like the other fine things in life, traveling costs money (yes, even if you get your tickets from a Piso Sale). If you are part of the jet set – or want to be – you should plan your finances with these expeditions in mind. A credit card application can be a necessary first step in preparing for your next jaunt.
A credit card can be handy whether gassing up for a family road trip or packing up for a monthlong sojourn. It can help in all your travel transactions – from accommodation and transportation to dining and sightseeing. But remember: you still need to pay for all your credit card spending. Tap or dip your card away but be diligent in managing your finances!
A smart plan for using your credit card for all your travel needs is crucial. While a credit card is a terrific alternative to break down bulky or emergency expenses, a credit card specifically for luho, such as traveling, can be considered to recharge your soul, but needs a different strategy. To avoid spending beyond your means, don't charge what you can't pay for in the first place. This way, you have enough cash to cover your credit card bills at the end of your trip.
Benefits of using a credit card for holiday trips
With a proper spending plan in place, there is no reason why you shouldn’t enjoy using a credit card while traveling. Here are some of the advantages of having a credit card during your holiday trips:
- It's convenient
As much as possible, it is always travel light. A credit card is lighter than a wad of cash in your wallet. It also makes overseas purchases easier because you can use your credit card instead of looking for money changers or ATMs in a different country. Hotel and flight reservations and other online purchases, like tickets, are faster via credit card.
- You get rewards for spending
If travel is expensive, then make it rewarding! Many credit cards offer rewards for every amount charged. These rewards can come in via airline miles, cashback or rebates, or even waived annual fees. The more you spend using your credit card, the more reward points you earn.
With the Chinbank Destinations World Mastercard, you get the lowest air mile to card spend conversion rate, at Php30=1, across all card spend categories, both local and international. Moreover, it offers a low foreign transaction fee of 1.7%, making cardholders enjoy shopping more when travelling abroad. Lastly, the benefit of getting a free Accor Plus Explorer Membership for 1 year completes the travel experience that a wanderlust truly desires.
For out of town trips that can be driven, the Chinabank Platinum and World Mastercard is the perfect companion as it gives 5% rebate when you gas up at any local gas station.
Both cards give you travel benefits and rewards.
- Get access to travel-related perks and other exclusives
Some credit cards can give you access to premium airport lounges and even periodic discounts from certain hotels, resorts, or other travel-related services. Just do your research and stay updated with the latest promos.
How to apply for a credit card
To get the right credit card for your travel needs, you need to follow these important steps:
- Do the legwork
There are many things to consider before getting a credit card. Study all the top credit card companies and find out the different benefits they offer. Look for crucial features, like credit card charges (how much are the annual fee, termination fee, and processing fee?), interest rates, and rewards programs, and compare.
Types of credit cards:
- Basic credit cards – These have fundamental features, functions, and characteristics. You can use them for almost every purchase, whether in-store or online.
- Rewards credit cards – These give reward points for specific amounts. You can convert these points to certain products or perks that the credit card offers.
- Cashback credit cards – Here, rewards come in the form of cashback, which you can earn when you meet spending requirements (type of products or services, minimum spending amount, etc.). The bank credits the cashback amount to your next billing statement. Check Chinabank Cash Rewards Mastercard to earn up to 6% rebates.
- Travel credit cards – These have special features or benefits specific to travel. For instance, Chinabank Destinations Mastercard offers Travel Accident and Inconvenience Insurance, the Air Miles Rewards Program, foreign transaction fees for as low as 1.7%, and access to airport lounge membership and Mastercard Travel and Lifestyle Services.
- Prepare the required documents
After choosing your preferred credit card, you can start the credit card application process. Make sure you have all the necessary documents needed when submitting your application. Credit card companies usually require the following:
- Completely filled out credit card application form
- 1-2 government-issued IDs
- Proof of billing (electric bill, internet bill, or any bill that shows your address)
- BIR Form 2316
- Existing credit card for at least one year or proof of income such as:
- Latest payslips
- Certificate of employment
- Submit your application
Submit your complete documents and fully accomplished application form online or to the nearest bank branch. Fill out every item on the application form properly and follow all instructions on the exact documents to submit. Missing out on a detail or two may delay your application – or worse.
The credit card application process usually takes 10-15 banking days. It involves receipt of the application, along with required documents, evaluation of the applicant based on several factors (credit history, monthly income, employment, etc.), and finally, approval.
For your application to be approved, you must be able to convince the credit card company that you can pay your bills in the future. Therefore, the documents that you will be submitting should reflect this. How do you prove that you can be a worthy credit cardholder?
How to increase your chances of getting approved
- Have a savings account – If you already have a savings account with the same bank where you are applying for a credit card, then you have a higher chance of getting approved.
- Build your savings – Having a lot of money saved up is compelling proof that you can pay your credit card bills in the future. Sometimes, a bank issues loyal customers a credit card if you consistently maintain a high account balance. You don’t even have to apply for one!
- Have a stable source of income – There is no better way to prove your worth to a credit card company than a steady and consistent income source. Whether you’re an entrepreneur, an employee, or even a freelancer, you should provide documentary evidence of your monthly or annual income.
- Have a good credit history – Always pay your loans, mortgages, and bills on time because these are all part of your entire credit history. Showing proof that you can pay bills or pay back the money you owe gives credit card companies confidence that you are a qualified cardholder.
- Receive your credit card
If your application is approved, then congratulations! You’re now officially a credit cardholder. After receiving your card in the mail, read the attached letter, which will tell you all you need to know about your new credit card: your card number, account number, credit limit, which day of the month you should expect your bill to come, and more.
Your credit card will also come with instructions on how to activate it. Read and follow the instructions carefully so you can be all set. Just remember: don’t be too trigger-happy! A credit card is as much a responsibility as it is a luxury.
Paying for things via credit card is a different experience and could take some time to get used to. You don’t feel the spending as much when tapping or swiping a card versus handing a handful of peso bills to a cashier. So, if you’re not careful, you may be more prone to impulse buying because you’re not seeing actual money slip through your hands.
Tips on how to use credit cards wisely on trips
Set a budget
Don’t treat your credit limit like a challenge or a target number to aim for. Some people think you should keep spending as long as you're within the credit limit. This is usually a bad idea unless you expect a bigger-than-usual payday. You should set a personal spending limit based on how much savings you have and how much money you’ve budgeted for the trip.
Use your card as much as possible
This may seem to contradict the first tip, but hear us out. If you have a solid budget that you strictly follow, then you can maximize your credit card. Use it in any shop or establishment that allows credit card transactions because this could help you earn more reward points or cashback, which, if you look at the bigger picture, could lead to future savings.
Also, using your credit card for travel purchases ensures you have cash in your pocket, which is always necessary when you're out of town.
Maximize installment options
Find out if your purchase offers a 0% installment option. Take advantage because it gives you greater financial flexibility for the next several months, allowing you to budget more easily for other needs besides your holiday vacations.
Capitalize on promos or discounts
Credit card companies often have promo tie-ups with brands and establishments all over the country and the world. When planning for your next trip, research some promos or discounts your credit card may be offering during that period. Who knows, you could get a friendly rate at a hotel, resort, airline, or any attraction you’re planning on visiting.
Applying for a credit card for your holiday trips is easy if you are well-informed, well-prepared, and responsible with your spending. A credit card can make things very convenient for you while you’re traveling. Just use it wisely, and you’ll be able to unlock so much more fun throughout your holiday. Visit Chinabank to find the right credit card to match your lifestyle.
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