Credit Cards: How can a card help you manage a luxury lifestyle?

Have you started using a credit card recently? If yes, you should be mindful of the fact that a credit card is not only meant to offer a life on credit, but also a life full of luxury and comfort. Well, it sounds strange but true!

Thanks to the regular use of credit card (s), you can claim reward points, encash them at fine-dining restaurants, use air miles to claim air tickets, use cashbacks to buy luxury items on online shopping, and claim access to lounges at international airports.

So, a credit card can support a luxury lifestyle by providing tools for managing cash flow, earning rewards, and accessing exclusive perks. Here’s how you can use them rationally to improve your lifestyle.

A credit card can support your luxury lifestyle:

I. Maintaining cash flow: Credit cards let you stagger payments over a period of time such as fashion, fine dining, and travel by paying them off over time. You should be careful about holding a huge balance over the long-term so as to avoid high interest rates. So, clearing your balance in full every month can maximise benefits.

II. Cashback and rewards: Several high-end cards offer rewards programs which are tailored to luxury lifestyles, including high cashback percentages on travel and dining. The points or miles earned on these cards can be redeemed for flights, hotels, and merchandise, which can ease the cost of luxury spending. Some premium cards offer more value when points are redeemed for travel through their portals, with points worth up to 50 percent more.

III. Perks and benefits: Luxury credit cards give complimentary access to airport lounges, travel insurance, and upgrades at hotels. You might also get exclusive invitations to events, pre-sale access for concerts, and reservations at high-end restaurants.

Some cards even offer concierge services to assist with travel planning or hard-to-get reservations, adding convenience and exclusivity.

IV. Insurance and other benefits: A number of premium cards offer purchase protection, extended warranties, and return protection, which can be valuable for high-end goods. You’re also often protected with benefits such as travel accident insurance, baggage delay insurance, and even primary rental car insurance when travelling.

V. Strong credit score: If you regularly use your credit card and pay off balances on time, it builds a strong credit score that can make it easier to finance bigger lifestyle upgrades (such as buying luxury property or high-end vehicles) at favourable rates.

It is vital to be careful of the following things:

1. The card fees on premium cards can be high, sometimes thousands of rupees, so it is important to ensure you’re getting enough value from perks and rewards.

2. Interest rates on luxury cards are typically high. Avoid carrying large balances month-to-month to maximise the benefits without incurring costly debt.