May 4

What Should a Good Credit Card for Travel Have?

50  comments

We all know that there’s a plethora of credit cards out there from which to choose, yet despite how simple getting a good travel credit card may appear to be, the truth is that choosing the wrong one might cost you very dearly. Why? The answer is as simple as it is scary: fees. And not only that, you might be loosing free flights and other bonuses. With your permission let me guide you through this obscure world, and hopefully you’ll be seeing a light at the end of the tunnel by the time you’re done with this article.

good travel credit card

Watch Our For Credit Card Fees

When choosing a credit card to take on a trip overseas, you need to check how much the card provider is going to charge you to use it while you are traveling. Some providers levy extortionate foreign conversion charges for using your card (and may even stop your card if you don’t inform them in any advance that you will be using it overseas), with charges typically starting from around three per cent of each transaction that you make with the card while traveling overseas- this can add up to hundreds of dollars when traveling long term. The best way to get around this is to carry a debit card that you will use to withdraw local money, thus only being charged the local bank fee (if there is one) and not the cash advance plus exchange rate fee, or to buy everything online via the U.S. version of the site to avoid being charged. There are however a few no foreign transaction fees credit cards – Capital One, the Chase British Airways card and Discover, for example- although they may limit the period you can do so or charge you more for withdrawals from ATM’s. If you’re going to get a Credit Card, I’d get one of these.

If you are traveling in Europe or North America, another option is to take out a pre-paid foreign exchange card rather than a debit or credit card. These allow you to top up before you go and offer a much better exchange rate than a bank or bureau de change. You can also top them up online or by phone when you are overseas. Leading providers of pre-paid foreign exchange cards include Caxton FX and Fair FX.

And what about annual fees? Branded credit cards usually charge between 50-100 USD in annual fees, but there are some that do not have them. What’s the catch? Cards that have fees usually offer more points per mileage and other advantages, thus allowing you to use your rewards sooner. If you’re going to travel a lot odds are that you will actually save more money with one of these than the cost of the annual fee.

Reward schemes

Another thing to check is what reward schemes are associated with your credit card, for example one air mile per dollar spent on the card or points that you can redeem against future purchases. Good airline miles credit cards will give you extra points when you shop at specific retailers, or, if it is a branded credit card, with a particular brand. Don’t however spend more than you otherwise would on the card to build up air miles or reward points as this will end up costing you more than you gain, but try to get more than one point per dollar when possible!

Sign up bonuses

Most travel credit cards offer huge bonuses for signing up, equal to at least one domestic travel flight within the U.S., sometimes even more.  The American AAdvantage card offers 25,000 miles just for joining, United Airlines gives you 30,000 miles for signing up and Delta offers miles and elite status miles when you sign up. I highly recommend you don’t get one that doesn’t offer these, as you’ll be able to reap the benefits right away.

Insurance

Many credit cards also offer things that you will find useful while you are traveling, such as car insurance and health insurance.  American Express for example offers insurance on car rentals so that you don’t need to pay for it separately to the car rental business as well as travel insurance that covers you if you lose anything or are injured while traveling. That is a huge bonus I think.

Some of the More Popular Credit Cards

Let’s take a closer look at some of the more popular credit cards and their fees.

HSBC

The Hong Kong and Shanghai Banking Corporation based in Britain has a number of credit and debit card deals for personal customers. HSBC charges an overseas conversion fee of one per cent on all transactions, whether you are buying goods and services with your card or using it to get cash. If you use your card to take out cash from an ATM overseas, it will also levy an additional $1.50 ATM transaction fee on each withdrawal.  So if you’re in Europe and you want to withdraw four hundred Euros, it would cost you $5.50 (one per cent conversion fee of $4 plus $1.50 ATM transaction fee). Having said that, this is still at the lower end of what some banks and credit card providers will charge you on overseas transactions.

Bank of America

Bank of America’s charges for overseas transactions are some of the lowest available to personal customers.  It also charges a one per cent conversion fee on all overseas transactions as well as a $5 fee for withdrawing cash from an ATM while you are traveling. However, these fees can be avoided if the bank you use overseas is part of the Global ATM Alliance. As well as Bank of America, this includes Barclays (United Kingdom), BNP Paribas (France), Deutsche Bank (Germany), Scotiabank (Canada), Westpac (Australia) and ABSA (South Africa).

CitiGroup

CitiGroup in the United States has a number of Citi Cards which you can use when traveling abroad. It too charges a one per cent conversion fee on all transactions and an additional fee of $1.50 on ATM withdrawals, but like Bank of America it will waive these if you use your credit or debit card at one of its affiliated banks overseas.

This is a bit overwhelming,  can’t you just tell me which one I should get?

Before I get your hopes high, I’m sorry to say that the answer is no. Depending on where you are, where you’re going, and what you’re going to do one credit card will be better than another, and only you can determine which one suits you best. You may want to check this article that covers benefits and highlights of most travel credit cards , or this one with a ranking of the best airline credit cards are in 2018, but, this said, I recommend you get two: one that will give you one of those huge bonuses when signing up, and another that will waive you the fees when withdrawing money overseas. Should you loose one for any reason you will still have a replacement, and if you don’t mind carrying a third one I would recommend you get one too that includes some sort of insurance.

What credit cards do you use when traveling? Do you pay attention to the fees that are charged? Which is kind of travel credit card would you be most interested in getting? Share  your thoughts with us in the comments section below, and this post too if you liked it!

[Photo credit @ Flickr: 401k]


Tags

General-Travel


You may also like

Countries to Explore After Covid-19

The Best Car Seat Cushion for Long Drives

  • The best credit cards to use when traveling overseas have logos from major companies such as Visa, MasterCard and American Express. While specific benefits depend on the card you have, the best advantage of using these cards involves worldwide availability, meaning that the card will be accepted in several foreign countries..

  • Before I have a phobia of getting a credit card, because my friend was able to purchase clothes worth $1500 and I’m scared to death if ever I got one i’ll be tempted to get same worth of apparels. But when I started to travel, I found out that acquiring tickets through net by using credit card, it’s more cheaper. So I got one already but I only using it when purchasing a plane ticket.

  • Wow, great article, very informative. I hadn’t thought about all the credit card fees associated with travel. I guess there is some use for prepaid cards!

  • I always choose a company that has a pretty good reward scheme especially for travelers like free miles when reached a certain purchase amount. It’s pretty handy when you travel a lot 🙂

  • I found out that acquiring tickets through net by using credit card, it’s more cheaper. So I got one already but I only using it when purchasing a plane ticket. While specific benefits depend on the card you have, the best advantage of using these cards involves worldwide availability.

  • Very informative! I’m partial to my HSBC mastercard. Maybe it’s just clever marketing, but I find it very comforting to find an HSBC ATM when I’m travelling in a place that’s completely foreign. It’s kinda like having a secure piece of home wherever I am. Again great article! Thanks.

  • Maybe it’s just clever marketing, but I find it very comforting to find an HSBC ATM when I’m travelling in a place that’s completely foreign. Thanks for sharing..

  • While specific benefits depend on the card you have, the best advantage of using these cards involves worldwide availability, meaning that the card will be accepted in several foreign countries.

  • I feel like its always convenient through credit cards as its more cheaper. So I got one already but I only using it when purchasing a plane ticket. While specific benefits depend on the card you have, the best advantage of using these cards involves worldwide availability and we have lot of options like Visa, master etc.

  • Major credit cards, such as Visa and MasterCard, are accepted virtually everywhere, with a few exceptions. With credit or debit cards, you don’t have to worry about carrying around loads of cash in a strange city.

    • Thanks for dropping by Eric and your tips. Yup, I’ve heard of them both, though apparently Charles Schwab does have some limitations. Do you own any of them? Or both?

  • The best advantage of using these cards involves worldwide availability and I don’t think acquiring tickets through net by using credit card is cheaper.Insurance which they provide such as car insurance and health insurance through the cards is the bonus, thanks for post very informative.

  • Great article to read! and providing us this kind of information is really a big help. I know that a lot of people will benefit from this. I will surely follow all the tips that you’ve shared with us here. Thanks for sharing this with us and keep up the good work!

  • Major credit cards, such as Visa and MasterCard are accepted everywhere but I never found its cheaper only the advantage is that there is no need of carrying cash in the strange country and we get insurance through it. I can say credits are more better then carrying cash. Wonderful blog, thanks for sharing.

  • These allow you to top up before you go and offer a much better exchange rate than a bank or bureau de change.

  • That was some great piece of advice from your side. It will surely help me in my future travels. It would be awesome if I could control some of my expense while traveling overseas. I am scared to carry cash or travelers check with me because of a bad experience that I had long back. I am still not clear which credit card I should carry but carrying multiple card for different purpose sounds like a good idea.

  • I use an Amex Starwood card and love it. I don’t like the annual fee but if you threaten to cancel when your renewal comes up, they’ll usually remove it. 🙂 I’ve already gotten one free trip to Brazil with it.

  • I think when we go to new place we mostly rely on our credit cards because it will never run out of cash. But before travelling I think we need to consider your points which will not affect our enjoyment. Reward schemes, good deal and companies are must for any credit card. Thanks for sharing useful post.

  • specific benefits depend on the card you have, the best advantage of using these cards involves worldwide availability, I never found its cheaper only the advantage is that there is no need of carrying cash in the strange country and we get insurance through it. Good blog, thanks for sharing.

  • These are great tips… I recently read a post about how the charges of using some credit cards abroad are becoming prohibitive for a lot of travelers and they recommended bringing cash along. I guess we just have to do our research! Good things to think about. Thanks for sharing 🙂

  • You should use a Visa or MasterCard credit card for as many purchases as possible because they are the most widely accepted card networks and offer exchange rates that are much, much better than local banks and places like Travelex. Make sure this card also does not charge foreign fees and that you get it before booking plane tickets, hotels, day trips, etc. because foreign fees apply to all purchases processed outside of the country, not just when you’re physically abroad. Whether or not you need rewards (and what kind to get) depends on your credit standing and whether you pay your bills in full or not. If your credit standing is below average, you’ll probably benefit more from a card without an annual fee than any rewards. Likewise, if you don’t always pay your bill in full, you might be better off with a card that offers 0% on new purchases, especially if it’s going to take you awhile to pay off your trip expenses. Lastly, you’re obviously not going to be able to use a credit card for every purchase you make, so bring a debit card with low foreign fees so you can get access to cash as needed and benefit from the Visa/MC exchange rate.

  • {"email":"Email address invalid","url":"Website address invalid","required":"Required field missing"}

    Subscribe to our newsletter now!

    >