Whether or not you’re a frequent traveler, being equipped with the right type of credit card may help you save quite a bit of money during your trips. Some of the things you may want to consider about travel credit cards:
- Are travel credit cards worth using for the rewards?
- What kind of foreign exchange fees can we expect to encounter?
- What are the best ways to travel with money?
I’ve put together some tips on travel credit cards and on how to travel with money.
Best Travel Credit Cards
Here’s a list of travel credit cards that you may want to check out. They all offer great rewards:
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Using Travel Credit Cards For Rewards
When traveling, I feel “safer” when I use a credit card rather than if I carry cash or a debit card. And from what I’ve read, this appears to be popular advice. There’s a stronger likelihood of losing money while in transit, or of having disputes in foreign places with merchants you only have a fleeting moment with. So given that concern, I tend to rely more upon credit cards to make my transactions. Now on this point, are there certain credit cards worth using over others? That would depend on your travel habits and spending patterns. Typically, it may make better sense for the average traveler to use cash back credit cards (perhaps like a Discover credit card or American Express card) to get rewarded in cash, rather than to use specialty travel cards to build up points for mileage, hotel accommodations or other non-cash rewards. But you may find that travel cards may be fruitful under certain conditions. Some points to consider:
1. Last minute travel: Paying for last minute travel accommodations can be expensive. So if you’ve earned a free ticket or hotel stay using points, it can turn out to be the best value under these circumstances.
2. Bonus points? Some travel cards offer bonus points to card members on occasion. Extra points can be an incentive.
3. Flexible terms, conditions and transferable rewards: One complaint I have about travel cards is how limited they typically are with how you can use your earned points. But some cards like Starwood Preferred Guest (from American Express) allow you a lot of flexibility, giving you rooms for a good deal (using points) and allowing you to transfer points for airline ticket purchases.
4. Fees and charges.
Before using rewards credit cards, weigh their perks and rewards against their fees and charges. You’ll come out ahead if you know how to leverage them. If you can pay your monthly credit card in full and you find yourself using these cards frequently, these cards are a good option.
What About Currency Exchange Fees?
But what about those extra fees that card companies charge us when we travel to a foreign land? Don’t forget to check what foreign exchange fees you may incur when using your cards. Some interesting pointers I picked up on this subject:
1. Most credit cards charge a currency conversion fee. But there are actually a few that don’t: Capital One and Charles Schwab However, applying for such a card for the purpose of getting a short term deal on a trip may not be worth the effect this new card will have on your credit score.
2. Use cards with the best terms for travel. Evaluate your existing cards and find out which have the lowest charges for currency exchange (these usually range from 0% to 3%) and which have the best terms for use during travel.
3. Currency exchange through other avenues can cost more. If you change currency at the hotel, airport, through local merchants or tourist traps on a cash basis, you can bet you’ll be charged more. So using a credit card may actually turn out to be a better deal!
Other Ways To Travel With Money?
I found a few worthwhile tips on how to manage your money while you’re traveling. Not being a well-worn traveler, and not someone who particularly paid close attention to travel costs in the past, some of these ideas are new to me:
1. A credit card is the best choice for monetary transactions. At least for me! They’re cheaper than traveler’s checks (which are no longer widely accepted), they’re convenient and can serve as a buffer if problems arise.
2. Use ATM and debit cards when you can’t use credit. For better exchange rates, use your ATM rather than visiting a currency exchange location.
3. Don’t get cash advances on your credit card. It’s going to cost you to get money from the ATM using your credit card because rates for cash advances are typically higher.
4. Avoid changing money at local merchants. They’re looking to make a little extra from your transaction.
I’d like to ask those experienced travelers out there: have you got some money saving tips to share or things to watch out for when you’re on the road in some other part of the world? We’ve assumed that there would be extra costs to grapple with during a journey, and we’ve budgeted for unforeseen expenses accordingly. But it sure would be great if we can cut down on paying extra whenever we travel.
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{ 12 comments… read them below or add one }
Are you sure that Capital One doesn’t charge fees for currency exchange? We used my husband’s Capital One last year in Greece and was charged 1% since my cards were both 3%.
*Raises hand excitedly*
I’m actually in Australia right now so I think I can relay some tips. Woohoo.
I’m carrying a Capital One card (No Hassle 1% cashback) which I use exclusively here in Australia because it’s widely accepted (Mastercard), does NOT charge any foreign transaction fees (answer to Sara’s comment above), and gives me rewards at the same time. I also have a Bank of America checking account which is partnered with Westpac Bank in Australia (one of the four big banks of Australia) through their Global ATM Alliance. This allows me to use my BoA ATM card to withdraw Australian money (fee-free) from any Westpac ATMs (numerous here). Between those two cards, I have all my access to funding without any fees. The only thing is that the current exchange rate has been dropping since I first got to Australia in February.
As for booking flights, you should definitely check Qantas Airlines for ongoing specials. I know you live in the Bay Area and I also live in Northern California so I’m positive about the deals. Google for the Qantas specials webpage and you can get deals as low as $715 roundtrip (including taxes). That’s how much I paid for mine and I believe the promotion is still going on. Plus, Qantas is a lot better than United Airlines to fly to Australia but you can check United to see if they have specials also.
Lastly, if you’re ambitious, you can apply for a Citi Premierpass Elite card and charge the flight to the card, netting you 20,000 Thank You points as a sign up bonus, plus thousands of more points for the miles you flew and the dollar amount of the flight itself. This can be worth a domestic flight to you or several $100 gift cards. I used this strategy myself earlier and got loads of points. I remember you did a review of the Citi Forward card (not sure if you actually own one) but you can link all of your Thank You point accounts together to pool all the points.
Anyways, these are the things that I did for my trip to Australia. Feel free to email me if you’re interested in more tips or have any questions. Be happy to help!
In my opinion ATM’s are the best way to access cash overseas – depending on your bank of course. Some banks like Bank of America do not charge any fees if you get cash from ATMs within their network (Westpac in Australia). Otherwise, if you have a credit union you are likely to get great rates. I am currently charged 1% when I get cash overseas at any ATM.
If I use a credit card it is always a Captial One as they do not charge any fees. Any other credit cards are not worth the fees (2.7% AMEX – 3%citicards).
Another option if you are interested in having cash is signing up for an account at http://www.xe.com. You can send a check to yourself in Australian dollar currency. All rates are shown before you proceed with the transaction.
Enjoy the trip.
Very interesting and informative read. I think these cards can be of use to us but we also need to be aware of the opportunity being thrown by the airlines and various other intermediaries as well. They can be equally good. Using ATMS when you have money is a good idea too.
I don’t feel comfortable carry credit cards or cash! LOL they just make me nervous either way, but these are some really good tips. It doesn’t hurt to carry both
I’d be careful about doing the exchange at the ATM, too. In addition to the exchange, the ATM you use may charge you a fee, and the financial institution you use may also charge a fee. Personally, any time I travel out of the country, I carry small amounts of cash in the currency of the country I’m traveling to and I take two credit cards to cover any other purchases. Typically I don’t use my debit card but that’s only because it’s a pain to notify Visa that I’m traveling. I can let me credit union know, but Visa doesn’t see the notes on the financial institutions side, so if they flag my card for being used overseas, they freeze it and I have to call in to get it unfroze. Not really that big of a deal, but inconvenient most of the time.
One of the “dangers” of using credit cards is that you can find yourself in a situation where someone (restaurants or other) will copy your card without you noticing it and then start spending your money. Often times you’ll not find out until you’re back home and check your account.
I’ve had a few friends experience this (even in supposedly civilized countries).
/Mikael
Generally whenever I travel internationally I try and use ATM or debit cards for monies
My son is being asked if he wants the credit card charged in American dollars or australian dollars- He is using a capital one. What is the best choice?
ATM’s are the best way to access cash overseas almost in any City and any Country you can find them. But you have to be careful with it because if you have all your money in your bank and you lose the card maybe you’d have to come back walking home.
Great advice. I’ll be traveling to Guatemala soon, thanks for the tips!
Generally, traveler’s checks serve the best or ATMs.These modes used to be a hassle but not anymore. I personally use credit cards as they are the most convenient and I don’t have to keep a check on my spending that way
. I would still go with traveler’s cheques, they are accepted everywhere.