We often read stories about how people use credit card reward points and travel for free. However, most of us either don’t know how to accumulate tons of reward points or don’t have those super premium credit cards. In today’s post, I endeavour to highlight how “not so premium credit cards” can be used to accumulate tons of reward points and travel for free (to be honest, nearly for free :)).
The whole idea here is to use credit cards for daily use and at the same time not rely too much on hotel and airline loyalty programs for redemption. Further, I chose Paris Olympics as a target redemption event because it is still some time away; giving enough time to accumulate reward points while keeping spends to a minimum.
What should be the budget for Paris Olympics?
Currently, an economy return ticket between Mumbai-Paris is around 35k. Considering the event is 3 years away, I am assuming the ticket prices at that time would be 45-50k. For a hotel stay, you would like to stay near the main Olympic stadium, the Stade de France in Saint-Denis. Hotel fares in that area on MMT are anywhere around 40-70k for 6 days.
Therefore, if you are travelling solo you are looking at 45k+~60k, just above 100k budget for travel and stay. For 2 people you are looking at a total spend of 45k*2 + 60k = 150k on flights and hotel for a 6-day trip.
How much to spend to earn enough credit card reward points?
Since the objective is to use “non-premium” credit cards, I will focus on Amex MRCC and HDFC Regalia combination. There can be many more credit cards and several combinations that can achieve the same result, but I am taking these 2 cards as an example.
I won’t get into details of the reward structure or benefits of these credit cards. You may read my detailed reviews on Amex MRCC and HDFC Regalia, for that.
Roughly, you are looking at annual spending of 8lakhs per annum on these cards to earn enough reward points for your hotel stay and flight booking.
Use Amex MRCC credit card rewards points to book hotel thru Marriott
On Amex MRCC, if you spend around 300k per annum you can easily earn 30k reward points per annum. The 30k reward point calculation assumes you take full benefit of 4*1500 transactions and 20k monthly spend target to get 2000 additional reward points every month. Thus, in 3 years you can earn 90k reward points worth close to 36k if redeemed for Amazon vouchers, which means your hotel stay is nearly sorted.
However, I suggest using Amex points for hotel booking thru Marriott Bonvoy membership. For that, you need to enrol for Marriott Bonvoy membership (Register Here) and transfer your MRCC points to the Bonvoy program. The conversion rate is 1:1.
Why this hassle? The reason being, Marriott Courtyard Paris Saint-Denis is close to the main Olympic stadium and the average room is at 10k+/ night, which means 60k+ expense if paid in cash. However, on redemption of Bonvoy points, you can book this hotel for 6 days for 87.5k points plus ~1500 rupees in taxes. Thus, the 90k points on MRCC can completely cover the hotel stay.
Your eventual, reward rate on the Amex MRCC card will be around 60k/900k = 6.6%, which is just amazing!
Use Regalia credit card reward points for flight tickets
Use HDFC Regalia once you reach 20k spends on Amex MRCC. The easiest way to clock higher spends on credit cards is to pay rent using credit cards. If you spend around 500k on this card per annum, you will end up with 23k+ reward points. Thus in 3 years, you will have 70k reward points. Use these reward points on HDFC SmartBuy to book flight tickets. These 70k reward points are worth INR 35k, paying off a substantial amount of your return flight ticket.
One issue with HDFC Regalia is reward points are valid for 2 years. The workaround for this is after 15-18 months put in a request to re-issue your credit card. HDFC bank will issue you a new Regalia credit card and all existing reward points will be valid for 2 years from the date of issuance of the new card. 😉
You can also opt to transfer your Regalia points and any excess MRCC points to Singapore Airlines’ frequent flyer program and use miles to book your flight ticket. Since I do not have a very good understanding of how the frequent flyer program works and how to get the maximum benefit from that, I won’t delve into that. Nevertheless, that is another option you have.
How does the maths look like?
Therefore, if you are spending 8lakhs per annum on Amex MRCC and HDFC Regalia over the next 3 years, you can fly to Paris Olympics and stay there for 6 days in just 15k (assuming 50K return tickets and 60k hotel stay for 6 days).
But I have HDFC Diners Black or Infinia credit card?
Well then, you are lucky. 🙂
If you have Diners Black or Infinia credit card, by spending only 4lakh per annum you can earn 31k+ reward points i.e. ~94k reward points over the next 3 years. This assumes that you are taking the benefit of 10x points at least on Amazon vouchers (which I wrote about here).
This means you would have reward points worth INR 94k in 3 years. Good enough for 2 return flight tickets. Thus by spending 3lakh on Amex MRCC and 4lakh on DCB/Infinia every year, you can reap a reward worth 60k (hotel stay) + 90k (flight tickets for 2) = 150k. A reward rate of 1.5lakh/21lakh = 7%+.
I do understand that not everyone can spend 7-8lakh per annum on credit cards. However, the idea is to highlight the power of credit card reward points. In the above discussion, even if you spend 3lakh per annum i.e. 25k per month on Amex MRCC, you can get benefits worth 60-70k in 3 years. Which is nothing less than a feat.
In addition, the intention is to show that you really don’t need super premium credit cards to get those free flight tickets or free hotel stays for your vacation. What you need is just a decent credit card and some understanding of how to use it effectively.
Do you know any other credit card combo that will give similar benefits at lower annual spending?
Do let me know your thoughts on the article. Also, do share your reward points’ redemption stories, if any.
Image courtesy: Photo by Jad Limcaco on Unsplash
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Good article, liked the depth and your call a spade a spade style of writing.
Thanks a ton for your kind words.
A mighty innovative article.
Thanks a ton Prathamesh
Nice article. Curious to know are there any alternatives HDFC or Citi cards for achieving this along with the Amex rewards card?
Currently only Amex is Marriott transfer partner in India. So if you are looking to redeem for hotel points apart from Amex no other card will work. For airline benefits also very few cards have transfer partners among international airlines. There are co-branded cards issued by Emirates, Etihad, Vistara and Air India, but then you are tied to single card and single airline.
That’s true. The MRCC gives at the very least 2K points every month. How’s the Miles and More card from Axis (on Mastercard network though). They have around 40 partner airlines.
Miles and More is Lufthansa loyalty program. Being a Star Alliance partner is shows 40 airlines.
You get the same feature with KrisFlyer.
About the Axis Card, havent looked much in detail, but a cursory glance tells that 6 miles for 200 spent is the earning power. So you need to spend more than 14-15lakhs to earn around 50k points for a decent economy redemption. You can earn more than this on cards discussed in the post. Also not to forget the annual fees that Axis charges.
Is this really possible
The above calculations are done for flights and stay costs. Other expenses need to borne out of pocket.
I have myself used reward points for such travel. I visited Singapore in 2019, for which I spent only 2 rupees for return ticket. Rest were from redeeming my reward points. Further, my 4 days of hotel stays was on points.
One reason, why I kept the redemption option 3 years (in the article) away was to keep it realistic. If you were to plan Qatar 2022 WC, which is now just 12-14 months away, the spends would shoot up multi fold and thus i didn’t take that as an example
Excellent article. Thanks much for the work you put in so everyone of your readers can benefit