There are a number of good credit cards for world travel. Using credit cards while travelling is the ultimate convenience but there are a number of things to be aware of in regards to travel credit cards. In fact, picking the right card to bring on vacation is just as important as packing the perfect pair of walking shoes.
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Not every credit card is appropriate for you to take with you around the world. You need to be aware of the transaction fees that your card charges for foreign purchases, your credit limit, and what type of perks are offered. By comparing a number of credit cards, you can find the right one for your travel needs.
Credit Cards vs. Debit Cards
If you were debating between getting a new credit card for travel and using your debit card, you would be much smarter to leave your debit card at home. According to Smart Money, a credit card comes with built in protection. Add in all the other benefits that a travel credit card offers, and you will see that it is the best way to go.
When you make a transaction with your credit card, you are usually able to get your money back in case you are unhappy with your purchase in any way. With a debit card, you do not have that same protection.
If your credit card is stolen or lost and someone else makes unauthorized charges with it, you will not be responsible to pay for those transactions. If the same thing happens with a debit card, you do not necessarily have that fraud liability protection. Often you will have to cover all of the unauthorized charges.
Be Aware of Foreign Transaction Fees
One huge thing you want to be aware of in regards to using a credit card overseas is that there are fees associated with foreign transactions. This means that every time you swipe your card to pay for something you will be charged a certain percentage. This can have a big impact on your overall travel budget.
Most credit cards charge a fee for foreign transactions. It can vary as far as who issues the credit card but, in general, MasterCard and Visa charge a 1% fee. American Express charges a 2% fee, and Bank of America cards charge a fee of 3%.
Fortunately, there are some card issuers that do not charge these fees. These include Discover and Capital One, so if saving money is a concern you may want to choose one of those cards.
Benefits of World Travel Cards
Although many credit cards offer travel benefits, some offer more than others do. Most major credit cards automatically cover insurance for car rentals. Others offer travel accident insurance. This covers you if you have an accident or injury while flying.
Some cards give you insurance for your luggage. If your luggage is damaged, lost, or delayed, you are covered up to a certain amount, depending on each card. Another benefit with many rewards cards is that you usually earn double the amount of points on travel-related expenses such as rental cars, hotels, and airfare.
If you travel frequently and appreciate the finer things in life, some cards have great travel perks. American Express, for example, offers airport lounge access, airline credits, and special amenities at hotels around the world.
Downfalls of World Travel Credit Cards
Although there are many benefits to a credit card for travel, there are some drawbacks. One is that most travel cards require a good to great credit score. In fact, the ones that don’t charge transaction fees for foreign transactions require an excellent score.
Unfortunately, many people do not have the credit history that is necessary for a travel credit card. If you have a poor credit history and would like to improve it in order to get a travel card in the future, get advice from SmartMoney.
Another drawback to most travel cards are the high annual fees. Many cards have fees that range from $45 to $150 a year. The American Express Platinum card, which offers the ultimate travel benefits, will cost you $450 each year.
You need to decide whether the perks that you receive are worth what you will pay every year to use the card.
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