How Travel Credit Cards Work- 5 Benefits You Should Know

Tolkien once wrote that “not all who wander are lost, all that glitters is not gold”, and in a way the same could be said for both the traveller and the travel credit card.

Credit cards offer a host of conveniences for travellers, especially in the planning stage. You can use it to book hotels, flights, travel packages and even dining spots at your destination's best restaurants.

Additionally, you'll enjoy better security as you won't need to travel with a ton of cash. In short, it allows you to accomplish tasks that cash alone cannot. 

While it’s great to get to travel and we’ve talked about how using a credit card on your trips might be better than cash, it’s important for a traveller to know how do travel credit cards work and which cards to get and how to get the most out of them.

Points and Miles

Nearly all credit cards allow their users to accumulate a form of currency called ‘points’ and some gather ‘‘miles’ as they are used. Points are generally more versatile in the rewards that can be redeemed from them. In this regard, you could think of a credit card as consolidating various loyalty programmes with its own. 

Miles, originally called ‘frequent flyer miles’ however, are the currency associated with airline loyalty programmes. They are earned via air travel-related spending and often redeemed for flights and air-travel related services.

Many travel credit cards often give their users both currencies. Like the usual reward credit card, they also come with bonuses and perks on general purchases. However, as the name suggests, these cards focus their rewards towards travel-related expenses and activities.

Travel credit cards give more points for travel related expenses, such as flight tickets or spending abroad and allow conversion of said points to miles with certain airline loyalty programmes, such as the Malaysian Airlines’ Enrich Miles, Singapore Airlines’ KrisFlyer Miles or AirAsia’s BIG Points.  

These miles can in turn either earn the user certain rewards upon reaching a certain customer rank or are redeemable for free flights and seat upgrades. In some cases, it’s possible to redeem part of a flight with miles and pay the rest of it with cash.  

Besides the Points, Beyond the Mile

Outside of their ability to accumulate miles, travel credit cards also come with a variety of rewards and perks that further enhance the travelling experience of their user. These include:

• Travel Insurance

  Certain travel credit cards, particularly higher-end or premium ones, offer travel insurance, which is one of those perks you don’t think you need until your luggage gets lost, your flight is delayed or cancelled or heaven forbid, you lose your life.  

  
  
• Airport Lounge Access

Many travel credit cards offer access to exclusive lounges at certain airports, some for a certain amount of time and some unlimited. If you find yourself having to wait an ungodly amount of time for your flight and you need the facilities only a lounge can provide, consider a card that can give you such a convenience, such as our best picks here.

• Hotel booking discount

Certain cards offer discounts on hotel bookings and dining at their luxury restaurants. For instance, the CIMB Travel World Elite card offers a complimentary membership to HoteLux Elite Plus luxury hotel bookings for 12 months and 2,000 HoteLux points and well as 4 complimentary nights' stay at participating Marriott Vacation Club properties

• Golf club benefits

For golfing enthusiasts looking to tee off on their holiday, some cards can facilitate related perks. For instance, the AmBank Islamic Visa Infinite Card offers complimentary green fees with one guest player. 

The Different Types of Travel Credit Cards

Generally speaking, travel credit cards can be divided into three basic groups:

• General Travel Cards

These are the most widespread of travel credit cards, being essentially ordinary credit cards that allow points accumulated via all kinds of spends to be converted into miles. Which card allows its points to be converted to which Airline’s miles varies from card to card, as does the rate of how much money spent is converted into miles. Generally speaking though, they are not co-branded, or associated with any one Airline.  

• Airline Credit Cards

These credit cards are a bit more focused and are typically co-branded to either an airline or a loyalty programme network that rewards a user with miles for every spend they make. A good example of this would be the Emirates HLB Platinum card or the Hong Leong Bank Emirate Platinum card which allow a user to accumulate the airline’s Skyward’s Miles for every spend. More directly, AirAsia has its own Gold and Platinum Visa cards that allow travellers to earn BIG points for every spend they make. 

• Hotel Credit Cards

Less relevant to our discussion but worth noting, these are cards that are co-branded with hotel chains such as Hilton or Marriott. While more common in countries like the US, it is the general travel credit cards from banks closer to our shores here that basically fulfil the purpose of such cards. By spending money with travel credit cards, simply spending money at a hotel can earn you discounts on the price of a hotel booking or miles with an associated airline.  

Maximising your Credit Card for Travel Benefits

At this point, having a travel credit card for your sojourn might seem like a tantalising proposition and true, their advantages to an avid traveller are hard to ignore. However, as we also mentioned, concerns of running up an unmanageable bill is a valid concern. 

But if you or even an employee do travel frequently for work or you just love visiting new places, a travel credit card can be a powerful tool to not only mitigate travel expenses, but also to enrich your travelling experience. 

Understanding how to use travel credit cards can help enhance your experience as a traveller and help you save too. Getting the most out of your travel credit card takes a little bit of work, so here are some ways to mitigate some of those challenges. 

Know your wants and needs

The thing to remember is all trips are compromises between what we like and what we have the time and resources to do. Do you like to fly or do you prefer to take the scenic route on a road trip? Do you travel abroad a lot and will you be shopping quite a bit? Do you prefer a reputable hotel chain or will you be staying at an AirBnB? Do you like fine dining or will you be going to a street food paradise? Narrow down, with absolute honesty, what you like and are going to do and there will be a card for you.

Know how much you’ll travel

It’s also important to note that those who don’t use these cards often enough run the risk of taking on the burden of such a card’s at times higher annual fees and interest rates and you may not earn as many points using them domestically or for mundane expenses. So it’s crucial to balance your income, purchases and your card’s fees to keep your statement fully paid off. 

More crucially, many an airline’s miles will expire in 36 months, about three years - and with that a lot of lost cost-mitigating value for future travels. 

In the case of infrequent travel, a no annual fee card is more sensible, and some travel credit cards are also no annual fee cards too, which you can actually find here, if arranged for lowest annual fee. 

Know the advantages 

Now that you have your card and have an idea how you generally like to travel, you might make some adjustments to reap the rewards of certain kinds of purchases. After all, as Murphy’s Law suggests, no plan survives the first contact intact. For instance, maybe you didn’t plan to buy much abroad, but you find something that is cheaper than home. Many cards will reward you more than if you bought such goods locally. Understanding what your card will reward you for purchasing is crucial in getting the most out of it. Ideally, you should get a card whose reward structure you can easily understand.     

Keep track of current offers

Considering the constant changes happening around the world, the travel industry isn’t any different. By 2024, travel around Malaysia would have seen a steady recovery since the pandemic.

So within reason, it’s important to be on the lookout for deals on certain spends and limited-time offers, as well as any changes to your cards rewards and benefits. Knowing when these come up are one more thing you can do to ensure your card’s advantages are fully maximised. 

The Bottom Line

If you're a frequent traveler, either for business or pleasure, the first step in choosing the right card is to compare them for the different benefits they offer. 

Some cards are designed specifically for frequent flyers, while others also incorporate benefits for daily spend such as petrol and groceries. To get the best deals, use CompareHero's exclusive credit card comparison tool that saves you plenty of time and facilitates your next adventure!