Finding a Good Travel Credit Card
We all know that traveling requires a lot from us when it comes to economics… meaning, money! We can plan our travels according to the amount of money we have saved so far or expect to have in the near future, or by taking money borrowed from credit cards. In fact, one of the best ways to fund a trip is by using both; saved money and credit cards. When I travel, I budget for the money I know I will have available the moment I start the trip. But, even when I have all the cash flow in the bank, I still use my credit cards for many reasons (which I’ll point out soon).
Even when you are a budgeter by excellence when it comes to travel spending and don’t need to rely on anything other than your saved money, it is always good to have some backup in a good travel credit card.
A good credit card is not only convenient for making big purchases (even if you do have cash) and for any emergency that could come on the way. Let start by pointing out that a good credit card isn’t necessarily a good travel credit card. Why? Because credit card terms can be different on international territories and cost us more with those “little” fees. Or it could just be a not well-known credit card on your travel destination and be unusable.
What should you look for in a travel credit card?
Since there is no single answer when selecting credit cards, you should sit, search, and brainstorm what are the benefits you would like to have as a traveler. After that, categorize them from most important to least. Here are some features you could look for when searching for that travel credit card:
Type of Credit Card – Today, the world is mostly dominated by three mayor credit cards companies: Visa, Master Card, American Express. Choosing between those three will almost guarantee you of having a reliable credit card anywhere in the world. I recommend that when traveling; take at least two credit cards from two different companies. In case they don’t accept one company at one retail location, you have the other one for backup.
Bank – Debit/credit cards are really popular and more accessible than regular credit cards. When selecting your debit/credit card, make sure that the issuing bank is an international bank, or that at least it has joint business with international banks. This will save you a lot of money when withdrawing money at the ATMs and when making international purchases. Ask the bank if they have international branches; if not, ask if they are related to an international bank and what would be the fees for using the card.
Sign-up Bonus – Many credit cards have HUGE sign-up bonus, especially if they are affiliated with an airline. Many of them offer up to 20,000 points/miles after your first purchase. Check out for credit cards affiliated with the airline of your choice. Obviously, an airline you know you could use constantly. This also applies to hotels and other types of companies.
Affiliation – Some cards affiliated with hotels can offer you discounts, upgrades, or even a free night stay when you use the card at their location. The same goes with other companies like car rentals, stores, airlines, etc.
Rewards Program – Rewards are really important when selecting a credit card. A good reward program can save you hundreds of dollars in future travels or in everyday stuff. Many credit cards give you 1 point (or “x” amount) for everyday purchases, and double or triple points for gas, groceries, and some limited items.
I recommend using your credit card to make all your regular everyday purchases and pay off the FULL balance as soon as it shows in the bill. This way you earn all your points, and don’t suffer with interest charges. This is a quick way to gain points/miles.
Rewards Usability – Some cards have certain limits on when and where you can travel with your rewards points. Try to get a card that doesn’t tie you up to specific merchants or that has big black out dates.
Annual Fee – Even when we don’t like annual fees, the best rewards programs and best benefits are found in credit cards with annual fees (although there are a couple without annual fees). So, try to compare if paying those $25-$90 dollars a year is worth it. Just a recommendation… If you travel a lot, it is definitely worth it.
Conversion Rate – Previously I wrote about reward points. One thing is to earn a lot of reward points and another thing is the checkpoint you have to cross to actually use your rewards. You can earn 2 points per dollar on your purchases (which can add to a lot, and quick) but if the conversion rate is really high (meaning, you need to get 100,000 points to convert your point into “something”) then it might not be that good of a deal for you. But, maybe it just earns 1 point per dollar and the conversion starts at 30,000 points; then that card is more convenient for you.
Fees – Yes, all those hidden fees and interest charges… ALWAYS read the fine prints. Fees for international purchases can range between 2% to 5%+ of the purchase price. Some even charge additional fees.
Insurance – Many credit cards offer some sort of travel insurance and/or “purchase” insurance. Ask the credit card company what benefits they offer. This is one of the reasons why I use my credit card on many of my travel purchases. The insurance on things I buy can really be useful, especially when I buy things from “shady” places. The credit card company helps me resolve any fraud, if it applies.
Those, and many more, are some of the things to consider when selecting a travel credit card. If you are a loyal traveler that always use the same airline, hotel, or company; then an affiliated credit card is something you should consider. You will earn more miles/point when you use your credit card at those companies, generating quick rewards. If you don’t want to tie yourself with a brand or company, then a general credit card is what you should consider. You can still earn quick rewards with everyday purchases and have the flexibility to use your points in various ways.
One good site I stumbled upon a few years ago is points.com. This site gives you the opportunity to swap and redeem miles/points between participating companies. So, if you have miles/points on one credit card or airline you don’t use often, you can transfer your points (according to their conversion rate) to your preferred airline, company, or credit card (if participating).