How can credit card rewards help you book flight tickets for your vacation?

Financial Planning

Family vacations are one of the best ways to take a break from your busy work schedule, rejuvenate yourself, and return to work with a fresh start. Many people realise the importance of vacations and have included 1-2 vacations in a year as part of their goal list.

With many people travelling during the same time of the year, such as Diwali, end of the calendar year, kids' summer vacation, etc., flight tickets can be expensive due to peak demand. In such a scenario, credit card rewards can come to your rescue by helping you book free flight tickets for your vacation. Let us understand how.

Are you planning a vacation for your family?

You can take two approaches to planning your family vacation:

a) Decide your vacation budget and start a one-year systematic investment plan (SIP) in a debt mutual fund.

b) Take a credit card that provides free flight tickets in the form of rewards.

You can take a combined approach of a credit card as the first choice and SIP as the backup. If you have accumulated enough credit card rewards during the year, you can use them to book free flight tickets.

If that is the case, you can use the amount accumulated from the SIP for other financial goals like debt repayment. If the credit card rewards are insufficient, you can fall back on the amount accumulated from the SIP and use it for your vacation.

Let us now look at some ways of using credit card rewards for free flight tickets.

1) Co-Branded Credit Cards that Offer Free Flight Tickets

Vistara has tied with various banks and launched Vistara co-branded credit cards. When you spend using these cards, you get Club Vistara (CV) points. Club Vistara is the frequent flyer program (FFP) or loyalty program of Vistara.

Under the Club Vistara program, the CV points can be redeemed for Award Flights (free flights) or upgrade your existing flight ticket. When you cross certain spend-based milestones on your Vistara co-branded credit card in a calendar year, you get free Vistara flight tickets.

Let us understand this with the example of the Axis Vistara Card. When you spend using this card, you get 2 CV points for every Rs. 200 spent. When you cross the specified spend-based milestones in a year, you get rewards as follows.

Amount spent in a year	Milestone benefit
Rs. 1,25,000	1 Vistara Economy Class Ticket
Rs. 2,50,000	1 Vistara Economy Class Ticket
Rs. 6,00,000	1 Vistara Economy Class Ticket

Thus, by spending Rs. 6 lakhs on the Axis Vistara Card in a year, you can get 3 Economy Class tickets, 2 CV points on every Rs. 200 spent, and other benefits. For the entire list of benefits, refer to the Axis Bank or Vistara website. Similarly, Vistara has two more co-branded cards with Axis Bank:

a) Axis Vistara Signature Card: Offers Premium Economy Class tickets as milestone benefits on spending specified amounts in a year

b) Axis Vistara Infinite Card: Offers Business Class tickets as milestone benefits on spending specified amounts in a year.

Similarly, Vistara has co-branded credit cards with SBI Card and IDFC FIRST Bank. Apart from these, some banks allow you to transfer your specific credit card reward points to Club Vistara in a specific ratio. The value of 1 credit card reward point may equal 1 CV point or more or less, depending on the conversion ratio.

The CV points can then be redeemed for free Vistara flights. Some banks with the reward points transfer arrangement with CV include American Express, AU Small Finance Bank, HSBC, IndusInd Bank, Standard Chartered, Yes Bank, etc. To know about the specific conversion ratio, refer to the Club Vistara website or of respective banks.

Although Vistara is continuously expanding its flights network, redeeming CV points for free tickets on specific routes may be challenging due to the limited network. Also, on existing routes, there is a limited quota of tickets that can be redeemed as Award Tickets.

2) Redeeming Reward Points Directly for Flight Tickets

In the earlier section, we saw how you can earn free flight tickets with co-branded credit cards. However, a co-branded credit card ties you to one airline (Vistara in the above case). To overcome this challenge, the HDFC SmartBuy platform allows you to redeem HDFC Bank credit card reward points for booking flight tickets from an airline of your choice.

Using the SmartBuy platform, you can search for all available flights on a particular route (for example, New Delhi to Mumbai). The platform search is powered by online travel aggregators (OTAs) like EaseMyTrip, Goibibo, Yatra, and ClearTrip.

Once you have selected the flight and filled in all required personal details, at the time of payment, you can pay 70% of the booking using your HDFC credit card reward points. The remaining 30% has to be paid using your HDFC credit card.

The redemption value of each point differs based on the HDFC credit card you hold. For example, for HDFC Infinia and Diners Club Black credit cards, the redemption value of each reward point is Re. 1.

3) Redeeming Reward Points for OTA Gift Vouchers

Most banks allow you to redeem your credit card reward points for gift vouchers of various online travel aggregators (OTAs) such as MakeMyTrip, Yatra, EaseMyTrip, etc. The redemption value per point usually ranges from 25 to 50 paise. You can use these gift cards further to book flight tickets for your vacation.

4) Gift Vouchers for Spend-Based Offers

Many banks come out with spend-based offers from time to time. For example, you may get an offer to spend Rs. 50,000 with your card between specific dates and get a gift voucher of Rs. 2,000.

The choice of various brands for gift vouchers usually includes Amazon, Flipkart, and some others. On fulfilling the offer, if you choose an Amazon or Flipkart gift voucher, and further use the voucher to book flight tickets for your vacation.

Whether Credit Card Rewards or SIP: The Annual Vacation Goal is On!

We have discussed how you can book your annual vacation flight tickets using various credit card rewards. If you earn sufficient rewards, you can enjoy free flight tickets for your vacation. However, if you don't have adequate rewards, your vacation plans need not get ruined. You can always fall back on your backup vacation debt fund SIP. You can redeem the accumulated SIP amount and book flight tickets for your vacation.

During the year, you can work on both in parallel: accumulating credit card rewards and the debt fund SIP. The end goal is to enjoy the annual vacation, whether with credit card rewards or SIP amount.

We will end by emphasising two crucial points on credit cards. Always use credit cards for only need-based spending. Always pay the entire outstanding monthly bill before or on the due date. Happy vacationing!

Credit Card Rewards Goal Based Investing how to book free flight tickets

Your Investing Experts

Relevant Articles

Emergency Fund: What Is It, Why and How Much of It Should You Have?

In 2023-24, many IT companies and start-ups laid off many employees. The IT companies had to lay off people as the demand or discretionary spending pickup in their major market, i.e. the US, was not as strong as expected. The start-ups had to lay off people as they were not able to raise subsequent round(s) of funding due to the funding winter. In both scenarios, people who lost jobs were left in the lurch. As the IT and start-up sectors were going through a soft patch, it was difficult for these people to either get new jobs or at the same/better pay package.

Succession Planning: What Is a Will, Terms Related to It, and How to Make It?

As per Indian succession laws, on the death of an individual, their assets are distributed among the legal heirs. The legal heirs are categorised into various classes and are listed in the sequence in which they can claim the assets. However, what if you want to distribute your assets to other people along with your legal heirs?