In the fast-paced world of Pakistan where cash business was always the king on the block and the debit card a mere toy that unlocks your treasure bank of accounts, the credit card used to have its healthy share of doubt. To some it is a construct of the mind that can be used when there is a need or, more ominously still, a slippery slope to debt. Yet when we think of it in this sense we lose its plowing potential. This new breed of smart travelers, right here in Lahore, are starting to consider this piece of plastic not as the albatross around the neck, but their most valuable weapon. They do know that with the right travel rewards credit card, when used judiciously and with a plan in place, their every rupee will spend on groceries, fuel, and utility bills will be converted into a practical advance to Hollyland with a ticket to London, a hotel stay in Dubai or Southeast Asian adventure. It is not about increasing expenditure; it is about increasing benefit introduced in the money you already spend. This guide will be devoted to the demystification of travel rewards cards just in the Pakistani context so that you could navigate through the existing options available among our local banks and find out which key could open the door to unlock your travel wishes. But prior to our engaging into the exciting possibilities here, there has to be one golden rule: paying you credit card statement on time, and in full, every month. Costs that are undesirable like interest charges that are notorious will evaporate the value of any rewards you acquire and it will turn this strong tool into a load around the neck. There is a certain discipline needed and it is with that firmly established that we may embark.
The best way to go about selecting the right card is to realize that the travel rewards cards all apply to either one of two different routes, though the cards in Pakistan are similar to those in the rest of the world. The two are your options, but depending on your style of travelling, your objectives, and how much you are willing to put up with complexity will determine the one you take. The co-branded credit card is the first route. It is the simplest and clear dialog that is an agreement between a Pakistani bank and a particular airline. Imagine some made up HBL Emirates Skywards Card or a UBL Qatar Airways Privilege Club Card. As you consume this card, you earn miles directly and automatically in the loyalty program of such airline. The huge strength lies in being simple. You do not need to bother about transfer points or conversion rates; your regular costs will express themselves in the number of the miles you required to go on your following trip. Another feature of these cards is that they usually include some useful airline-specific benefits, e.g. free additional baggage allowance, which will truly come in handy to Pakistani families as they travel abroad, or early checkin and boarding, introducing a certain additional comfort and level of convenience to your trip. The customer would be perfectly suited on this route who is already a loyal customer to a particular airline, whose business or leisure travel habits are entirely compatible with the network of the airline and who is a customer who places the premium on simplicity. In case you fly Emirates twice to Dubai and Europe a year, co-branded Emirates card can be a perfect match.
The other, more complex route is the one of the flexible points credit card. These are the most expensive cards that banks such as the Standard Chartered or the Bank Alfalah provide and they earn reward points in the bank specific rewards store. These bank points are rather like funds in your bank acting as a universal travel currency that you can transfer, at a later date, to numerous other airline and hotel partners. This is when the power and strategy of travel hacking is revealed. The main advantage of this career option is extreme flexibility. In case you have a possibility to find award availability on Turkish Airlines, you can transfer your points there to take a trip to Europe. In case your next direction is the Far East and Cathay Pacific provides more possibilities, you may transfer them to the other direction. There is a caveat to this in that no single airline program is as immune to the vagaries of the airline program as it was in previous years: should one airline make a devaluation by raising redemption rates then you can simply switch gears and transfer to another transfer partner. This road is created with the strategist, the traveler who observes the activity of comparing the best values as a gambler, whose destinations in travelling are varied and who is not a slave of a single carrier. It involves a small amount of additional work–you will have to know how to calculate transfer ratios, and to hunt award seats in more than one program–but the benefits of this effort are second-to-none flexibility and freedom.
Having these two alternatives in mind, the most important question arises which is: how do you select the right card in your wallet? Best card is not a title in a broad sense, it is a highly personal asset depending upon your life. The first exercise that you need to do is to audit yourself in terms of your expenses. Keep a month of monitoring the spending of money. Do you shop a considerable amount of your salary in big grocery shops such as Metro or Al-Fat? Does the family car take up a large cost on fuel? Are you an avid restaurant eater? Others are physical credit cards in Pakistan which provide faster rewards (or bonus points) on spending in certain areas such as these. The quickest technique to gather points is by matching the bonus groupings of your card with your finest spending classifications. Then you have to set the objectives of your travel. When your main focus will be to treat your family to annual trips to Malaysia and Turkey, a card that has a partnership with airlines with strong European coverage is much more beneficial than the one with greater interest in North America.
You should also know how to see beyond the intimidation of yearly fee. The annual charges on premium travel cards in Pakistan vary between 15,000 to 40,000 PKR, or even more; thus, this might make many people rethink. You must not however consider this as a mere expense, but as an investment. You have to tally the amount you get in terms of benefits. To give an example, most of the premium cards provide Lahore, karachi and islamabad airport lounge unlimited access. The fees of visiting one of these lounges are 3,000-5,000 PKR per person in case the payment is in cash. Given that in a year you and your spouse are only willing to travel 3 times, the annual fee might be easily worth 18,000-30,000 PKR on nights in the lounge alone. Throw in other benefits such as free travel insurance that saves you the expense of purchasing an individual cover plus other possible reductions. The sign-up bonus or, to be more exact, the largest benefit is nearly always the sign-up bonus. The standard welcome bonus may include such points as 50,000 bonus points once a specific spending limit is reached. Not counting the potential higher value of this bonus, as compared to the annual fee, you can get a very lucrative first year, and kick start a travel bank with enough points to get you a round trip flight to such places as Dubai or Bangkok.
In order to explain things better, I would like to draw a picture of the situation in Pakistan. You will find a quality co-branded card, say a bank such as Faysal Bank and an airline such as Qatar Airways. The Lahori that travels frequently to Europe or North America through Doha would find this card the solution. Its advantage would be that it is simple, that it could have baggage allowance benefits and that it earns Avios points directly, which are exceedingly flexible on the oneworld alliance. Alternatively, you may walk past a top end flexible rewards card of Standard Chartered. This card may be without an airline logo, but it may have an impressive list of transfer partners, perhaps including Emirates, Etihad and an international hotel chain, such as Hilton. This card would be to the serious travel hacker, the one who likes to make considerations, compare redemptions, and be free to decide whether he/she would have an extra upgraded flight with airline A or a free hotel night with airline B. There exist also very good entry-level or mid-tier cards with their annual fees being not very high, and that is why it can serve as a good starting point of those who have just entered the world of credit or those who would like to spend less. Such credit cards might not provide you with a membership to any airport lounge, however, they will still enable you to earn plentiful rewards on your everyday purchase, making you enter the game, not having to spend a fortune on it.
Selecting a proper card is the most crucial factor but not the stop of strategy. A credit card is only the device, the way to use it makes a difference. In order to effectively maximise your returns you have to be holistic. Always remember to include the potential bonus of a double dip (booking directly with your airline or hotel and pay with your rewards card). Look out continuously to promotional emails by your bank and travel companies as they may offer time-bound transfer bonuses to boost the worth of your points with 25 percent or more. Factors to consider in the long term are that you may decide to pursue a multi-card strategy i.e. one card which will give you extra point on groceries, one card which will give you a high reward on your travel expenses, so that you are earning as many points as absolutely possible on each and every rupee that you spend. It is at this degree of optimization, that the most enthusiastic travel hackers afford a life of unending adventure. The liberty plastic stuck in your wallet; the one you use intelligently and in good faith, transforms your attitude toward money in essence. It turns the daily cost into an effective vehicle of discovery and your daily life in Lahore into the takeoff point of your next adventure around the sky.
Picking the first travel reward card, you have actually opened a window to a new world. This early stage of accumulation of points based on the bills you pay everyday is a very thrilling process of watching your efforts accumulate in the form of an increasing amount of miles or points. However, in order to really tap the power of this hobby, you need to shred the layer of a passive earner to become an active thinker. This is the process of not choosing the easy road of a one card solution, but going deep into the creative nature of redemption and learning how to adequately handle your ever-emerging skyrocketing portfolio of rewards with the insight of an experienced master. In the following chapter you will be taught how to direct your budget to a level that will continually and permanently sustain a traveling lifestyle.
The initial stage in this evolution would be to get rid of the thought that there is one card that can magically fit in all situations. As great as your first card is, the real optimization is converting a “card portfolio,” meaning creating a little, but synergistic, deck of cards. This is done by carrying a pair or trio cards with varying strength, which enables you to maximize on the rewards you get on each type of your spending. As an example, a smart traveler in Lahore could build three purpose wallet. The former may be a high-premium flexible-points card, maybe of Standard Chartered, and it can be made the go-to card of all travel and dining spends, and one that gives bonus points in travel and dining plus valuable benefits such as blanket travel coverage and membership in airport lounges. The second can be a card of a bank such as HBL or Bank Alfalah, which can provide amazing category bonuses in the daily Pakistani life, including 5x points on fuel or at large supermarkets, such as Al-Fatah and Hyperstar. This turns into the constant companion or what would come to be considered the daily driver of all the usual household costs. The third might be low rate of yearly fee co-branded airline card, which you keep open year after year not because of the earning rate, but because of its individual airline check, such as a free baggage check on Emirates, which can save your family quite a bit of money on each trip. When you are spending on the right card you will be getting the maximum value of what you are purchasing.
The multi-card strategy is even more potent when one plays it as a two-player game with a spouse, or a family member. Instead of each of the partners receiving an identical set of cards, you are able to create a balanced household portfolio. One individual may be the owner of the best lounge access at premium travel card so that the family can avail the benefits to use this card and the other person may be the owner of card with the better grocery and fuels rewards. In this way, your family unit will have the opportunity to receive two different sign-up bonuses and maximize spending on more bonus categories. Then you can combine the malleable points of both cards in one airline or hotel loyalty account to arrange family holidays, and you will achieve your travelling dreams in twofold less time than a solo traveller. This community discussion involves communication and organization but it is the only best method to multiply your travel hacking activities.
The more you are involved in this ecosystem the better should be your knowledge in this ecosystem especially in the Pakistani banking scenario. The system needs tolerance to navigate. Sign-up bonuses do not always post automatically, but they should rarely need more than a simple and polite call to the customer service of the bank to sort it out. Don t be oblivious of the fee structure other than the annual one too. The foreign transactions charges, which usually range between 3-4 percent of the purchase price is something that can easily wipe out your points and miles very fast should you be a very active card user when you are traveling out of the country. Not all high end cards are eligible to a lower foreign transaction fee, but an attractive feature to any heavy international traveler. It is also important to know your card credit limit. High limit is not the reason to spend more but the reason to spend more seriously with the aim to take good care of your finances. One of the greatest factors in your credit history is your credit utilization the proportion of your credit to which you submit each and every month. With a higher limit and reasonable future spending the utilization is low which is considered good by the lending institutions. This ratio can be improved further by increasing credit limit after one year of making the responsible payments, so do not wait to make this request.
The redemption is just another part of the equation however; this is where the real value is generated. Here you have to graduate to the masterclass level of knowledge. Do not just think about redeeming on the economy flights with your main airline. Your most desirable redemptions are likely to be in the form of premium cabin travel at least business, and ideally first that is, your points may being to offer you two, three or even four times their value. You have also to master the transfer-partner art. Search deep into the award charts of the airline loyalty programs your bank works with, to undiscover sweet spots. As an example, spending Avios (the currency of Qatar Airways and British Airways) could be a tremendously effective way of using the points in the short expensive cash flights, such as Lahore to Doha. Alternative sweet spot could be to transfer your bank points to program such as the Turkish Airlines MilesSmiles which is known to provide very good value on award bookings originating in this region to Europe.
Moreover, do not underestimate the great worth of hotel rewards. Redeeming your bank points to a Marriott Bonvoy or Hilton Honors program can have your accommodation costs fully covered, which has become the second-highest cost facing any trip. These programs too have have their sweet spots (all programs have them), one of which is the 5th night free benefit that is offered to elite members (a status to which you can upgrade by simply taking possession of a premium credit card on occasions). This is seven free nights when you make a booking by using points. This advantage, in the variant of planning a week trip in Istanbul or Dubai, can save the family more than a hundred thousand rupees. The other redemption of high value is upgrading a cash ticket using points. Most of the time when your business requires a trip and the company is paying the economy ticket you can use your own miles to upgrade it to a business class. It involves planning, since frequently the upgrade can only be done one step up the fare classes (not the lowest discount fares), but it is an incredible method of travelling in style using a pre-existing cost.
When you have a number of cards and points it is important to manage long term because sooner or later you will be running out of card/ points. In the second year when the annual fee on one of your cards is due, you will have to make a certain choice. The very first thing you need to do, is to call up the bank and ask them in very nice terms, whether there are some so called retention offers that they can make to you. They can propose to waive the fee to make you stay in the status quo as a customer, or reward you with a bonus pile of points, which can be very frequent enough to make retention of the card worthwhile over another year. In the case where there is no offer, then you have to carry out a personal audit. Question yourself: “Did I receive more benefits of this card in the previous year than fee I had to pay?” In case of yes retention of the card. Otherwise, the only thing left is to request to convert it into a no-annual-fee card of the same bank. This means that you can keep your line of credit and the age of your credit account- both good aspects of your credit history and at the same time save twice the annual fee. Forcing a card is the last resort that you need to use.
After all, it is all about a paradigm change towards the world of travel rewards credit cards. It is all about considering your financial life as not a collection of separate transactions, but as a total plan with the definite interesting objective. Whenever we pay a utility bill, fill up at the gas station, run errands to the grocery store, it is no longer an ordinary expenditure, it is a micro-investment, in yourself, the future you, the version of you that will be sipping coffee on the Bosphorus, buying a jug of locally produced argan oil in Marrakesh, or kicking back in a business class lounge of a foreign city. When selected carefully and diligently utilised, the little piece of plastic available on your wallet stops being regarded as a tool of payment. It serves as your own personal passport to the world, which you may have previously thought was inaccessible to you because it becomes apparent that the most exciting voyages usually start way before any other time you ever left home.
