The year-end is among the most popular times of the year to go on vacations, mainly because it is a holiday season and because of long leaves from work and school, planning a longer vacation is easier. However, this very reason is why it is also one of the most expensive times to take a trip. Because of high demand, the prices of air tickets and hotels may be twice or thrice as much at this time. But budget travel isn't impossible if you plan right. Here are a few handy money hacks you'll find useful if you're planning a year-end trip.
The best way to fund your vacation is through personal funds saved purposefully in the previous months. The next best way is to borrow, but within limits. A vacation in itself can be expensive, but a vacation on borrowed funds can be even more expensive if you haven't evaluated your loan options. If you're short on cash, there are multiple ways to finance your trip.
Each of these financing facilities comes with its own set of benefits. You'll be well-advised to dig deep on the loan options and compare different offers before signing up for the loan that best meets your requirement. Also, have a clear repayment plan based on your affordability before signing up.
Look For Travel Deals Online
Many travel websites offer online travel deals in the form of combo packages like booking flight tickets plus hotel bookings or even flight bookings with airport transfers. Due to their partnerships with airlines, hotels, and cab companies, a combo deal can save you money through discounted pricing.
Plan And Set A Budget
The biggest planning and budgeting tasks are travel and stay related. Planning these two aspects judiciously can help you divert more of your savings on new experiences. There are plenty of hacks to save on both, keep reading to know more.
Carry Only Cabin Luggage
There are three types of luggage when travelling-cabin luggage is what you're allowed to carry on you inside the aircraft, a personal item like a small handbag or backpack that you can carry into the cabin along with your cabin luggage, and check-in luggage which is your suitcase or any big piece of luggage that you deposit at the counter while completing your check-in. If you're looking to cut expenses on your flight bookings, there are many airlines offering flight tickets at (even) throwaway prices because they don't accept any check-in baggage.
If you filter flights by cabin luggage only, you may see a significant price drop on plane tickets. Since you are travelling light, look for ways to cheaply launder your clothes. Ask your hotel or hostel what their laundry charges are.
Use Zero Interest Credit Card EMIs For Tickets
Instead of using a majority of your savings on flight and hotel bookings, save that to actually enjoy your vacation. If you use your credit card to pay for your flight tickets, you can convert that purchase into EMIs at 0% interest instantly on the payment page.
But there are two things to remember here-the first is that not all tenures under the EMI option come with 0% interest. In most cases, only the shortest tenure (usually 3 months) comes with the interest-free option. Other tenure options may charge an interest rate upwards of 10% p.a.
Secondly, after you choose the EMI option, it will take 2-3 days for your bank to convert this purchase into an instalment payment plan. The total amount will be blocked from the available credit limit on your card and will be restored gradually when you start paying your EMIs.
Use Air Miles On Credit Card Carefully For Maximum Return
Before you redeem the air miles you've accumulated with your travel credit card spends, transfer these miles to the Frequent Flyer Programme of a partner airline of your card issuer. Choose an airline partner you are likely to repeatedly fly with.
If you have a travel credit card with air miles facility, there are certain hacks that you can use:
# Use air miles for international travel: You get a better value out of your air miles when you use it for international travel when compared to domestic travel. However, international flight tickets are way more expensive, and the number of miles required might be higher than a domestic air ticket.
# Earn accelerated miles throughout the year: To earn the most miles, you need to spend on categories that are the most rewarding, so you earn extra miles throughout the year before the year-end trip.
# Club miles for maximum redemption: If you're travelling with your family and your spouse has an air miles credit card as well, you can club your miles together for redemption. You will have to contact your card issuer and the airline for this.
# Buy the remaining miles required to complete booking: You need a minimum number of miles to redeem it on a partnering frequent flyer programme. Also, you will need a significant number to get a good deal on flight bookings. Most cards allow you to buy up to 50% of the miles in your account, for a price (like Rs. 1 = 1 mile). This is a great idea if you're travelling in a group.
# Split seats across flights: It's not just having the required miles, but also getting the redemption seats. There will be a limit on the number of seats per class the airline frees up as 'redemption seats' on different flights. There may not be more than 4-5 such seats, so it's better to book on multiple flights to redeem more seats. Check the airlines website to see the available redemption seats.
Bonus – Use points directly with online portals: Based on the partnership between your card issuer and a travel website, some credit cards allow you to directly use your miles on partner websites against the cost of the tickets. You will have to check your bank's rewards catalogue for this.
Note: Redemption fees are applicable each time you redeem your miles.
With the right planning and execution, your year-end trip does not have to end with your savings ending too. Plan early and plan smart to enhance your travel experience.
(The author is CEO, BankBazaar.com)