How To Compare Travel Credit Cards
Choose the wrong credit card for your trip abroad, and you will end up paying unnecessary fees for using it. But when you travel with the right credit card, you can rest assured that you will spend less on card charges and get more rewards for your expenses.
Now, how do you select the right travel credit card from several options on the market? Make a comparison! Did you call that a stressful task? There is no need to be anxious, especially if you check out AskWallet often. You can easily compare travel credit cards if you know the most important factors to consider. Read on to learn how.
Should I Pay by Cash or Use a Travel Card When Abroad?
Before you pick a credit card for your personal or business trip abroad, it may be necessary to consider whether using a travel credit card will be better than paying for your expenses in cash.
Three things are involved when deciding between paying by cash or with credit cards. They are the currency, the exchange rate, and whether you already have a credit card.
Currency
Find out the currency of the destination country to know whether you will need to change yours. If you have the option to pay in your local currency, for example, paying in euros in the euro area or SEPA zone, use it. In that case, spending cash may be preferable. But if you will have to convert from one currency to another, then getting a credit card with favourable exchange rates and no foreign transaction fees might be a better choice.
Exchange rate
Remember that the traditional system of changing physical cash from one currency to another is often more expensive than using modern electronic methods that support credit cards. So, consider the exchange rates when deciding between spending cash and using a credit card. In most cases, it will be cheaper to use a travel credit card.
Existing credit card
Carrying cash is risky and can be unsafe for transactions abroad. Aside from other disadvantages, it offers no protection against theft, loss, or fraud. Instead, consider using safer options like FinTech apps and credit cards.
If you already have a credit card, it should still work internationally. In that case, it is a good idea to use it for your trip. However, it will probably cost more than a travel credit card that does not charge fees for foreign transactions. Therefore, the best option is to get a travel credit card.
What Are the Types of Travel Credit Cards?
Are you an occasional or frequent traveller? Your answer to that question can determine the type of credit card you need to travel with. Below are the main categories of credit cards in the market:
- Hotel-specific cards: These cards allow you to earn points for staying at certain hotels. Other benefits they can offer include free stays, elite status, and room upgrades.
- Airline credit cards: Consider airline credit cards if you are a frequent flyer. You can earn points and miles by flying with partner airlines and spending at participating merchants. Other benefits include priority boarding and free checked bags.
- General travel cards: These cards serve multiple purposes. They can help you earn points and miles for charging your expenses on them. They also offer cashback as part of additional incentives.
- Transferable reward cards: These credit cards increase your flexibility by letting you transfer some of your travel reward points to your partner or colleague who will be travelling with you.
How Can I Compare Travel Credit Cards?
Credit card issuers compete for clients by partnering up with various travel brands (or merely offering their own cards) and enticing customers with welcome offers, exclusive discounts, loyalty points, and other incentives. To avoid getting confused by their offerings, the following are the points and factors necessary to do a good comparison and make the right choice.
Take all travel credit cards to be imperfect
You need to be aware that there is no single excellent travel credit card for everyone. Each card has a unique set of features that may be tailored to suit various spending patterns, lifestyles, and travel objectives.
Moreover, people have different needs and preferences, and because there is no perfect card, it is realistic to expect to make compromises while choosing a card. That is why some people use two or more credit cards: one for booking flights and earning points; another for daily expenses with cashback; and maybe a third for business expenses.
Look for these 6 important things in a travel credit card
The objective of a travel credit card should be to make life easier for you overseas. Thus, there are six important things to consider before picking a travel credit card, without which you might end up with the wrong card. They are as follows:
- An attractive welcome offer: The top travel cards will provide you with a large initial discount. To receive points per euro or dollar spent in the first few months, you often have to reach a minimum spending threshold. You may kickstart your user account with these welcome points, putting you one step closer to having a free trip or hotel stay.
Although they occasionally go as high as 100,000 points, introductory offers for travel-related credit cards typically range from 40,000 to 60,000 points. Cards are fantastic since you may instantly receive a balance of thousands of points for little to no effort.
- Spending bonus (points and cashback): For every dollar spent, the majority of credit cards grant one point. However, reputable credit cards may reward you with additional points if you make purchases from particular brands or at certain stores, depending on whether they are branded cards. You will accumulate points much faster if you do this. What more do you require? Do not use a card that rewards one point for every $1 spent. Instead, choose the option that will earn you at least two points.
- Low minimum spending limit: Sadly, there is typically a minimum spending requirement to qualify for the fantastic incentives offered by these cards. For the welcome offer to be activated on some cards, you simply need to make a single transaction (many people like these). While there are ways to temporarily increase your expenditure, attempt to earn the bonus through regular, everyday spending.
You should also not steer clear of high-minimum spending cards; they offer significant rewards. Start modestly because you do not want to end up with so many cards that you are unable to fulfil the minimum spend requirements.
- Zero or low yearly fees: Nobody enjoys having to pay yearly credit card fees. Many annual fees for credit cards with corporate branding run from $50 to $95 per card. However, getting a card with a fee is worthwhile for people who travel and fly frequently.
Besides, the rewards programme offered by fee-based cards is typically superior, allowing you to rack up points more quickly, have greater access to services and promotional offers, and receive better travel insurance.
- No fees for transactions overseas: When travelling abroad, credit cards are fantastic to use since they provide the greatest conversion rate; but, if you have to pay a charge each time you use the card, it loses some of its value. Hence, never apply for a credit card that charges a fee for foreign transactions if you have other options available to you.
- Travel perks (miles, lounge access, and others): Most travel credit cards offer great perks to attract customers. They give several benefits like loyalty status, fee-free payments abroad, free hotels, priority boarding, free checked baggage, and hundreds to thousands of airport lounge accesses.
How to Choose the Best Credit Cards with Travel Points
You must pay the most attention to earnings structures if your main focus is accumulating travel points. Don't miss these factors to look for when choosing the best credit card for travel rewards:
- Earnings structure: To ensure you are earning enough points for the kinds of trip purchases you are most likely to make, compare the earning structures of the cards carefully. For instance, airline and hotel-specific cards will usually give you more points when you make purchases from them.
- Elite status: With the finest travel reward cards, you immediately receive automatic elite status, which entitles you to late checkout, resort credits, and other benefits. Along with your travel rewards points, which enable you to obtain additional benefits like suite upgrades and entry to VIP areas.
- Point redemption: Find out the guidelines governing the use of your travel points for travel. It is useless to gather so much if you cannot use it. Also, inquire into whether different travellers can use your points if you transfer them, as well as if a different airline will accept your points.
Best Credit Cards with Travel Rewards
Thus far, we have made it easy for you to choose the right credit card for your international journeys. Having shown you how to compare them, here is our list of the best credit cards with rewards for occasional and frequent travellers.
Capital One
You can use Capital One's limitless credit card rewards to pay for your travel. When you use either the Venture series or Quicksilver credit cards, you can get up to 75,000 miles and roughly 5% cashback on every purchase, respectively. You can spend your Capital One rewards on almost anything, including dining and entertainment, anytime you are ready to redeem them.
Moreover, Capital One charges no annual fee when you use the VentureOne Rewards credit card. It allows you to receive up to 8% cashback on your purchases and payments for dining, entertainment, car rentals, and hotel bookings.
Monzo (Premium)
Monzo attracts attention with their Premium credit cards while also offering a variety of comforting features. They include access to airport lounges and cashbacks. The cards are usable in more than 200 nations that accept Mastercard credit and debit cards.
Monzo Premium is a dependable choice for paying for your international travel. You get free virtual cards for online shopping, discounted access to more than 1,000 airport lounges across the world, and monthly access to your credit score on the app.
You can also get phone insurance to cover accidental damage, loss, and theft. The company has an international travel insurance offer for couples and families. Through it, you can cover medical bills (up to £10 million), cancellations (up to £5,000), and lost property (up to £750).
Revolut
Revolut offers credit cards that you can use to make purchases. You will receive discounts and up to 30% cashback offers from your favourite companies when you spend on your Revolut Reward card. Travel and accommodation expenses can be covered using the cashback reward package. Create an account with Revolut and receive rewards like up to 30% cashback on your expenses and airport lounge access for Revolut Premium and Revolut Metal users.
Wirex
Have you opened a cryptocurrency account with a bank or trading platform that accepts cryptocurrencies? Try Wirex! It is one of the greatest digital payment systems for using virtual currencies like WXT. It provides a multicurrency card that delivers 8% cryptocurrency rewards (cryptoback) on all of your purchases. Create a Wirex account today to take advantage of all the services it offers tourists like you.
With Wirex, you may save up to 3% on the conversion of cryptocurrency to fiat money and gain up to 8% in crypto rewards on all purchases in the form of WXT.
Note: If you are interested in other kinds of payment cards for travellers and freelancers, you can find a rich variety of them on our website. They include:
- Credit cards with low-interest rates or 0% interest.
- Virtual credit and debit cards for residents in the European Union.
- Credit cards that can reward you with cashback.
- Credit cards for small businesses.
- Affordable metal credit cards.
- Virtual credit cards for verification on PayPal.
- Easy-to-get credit cards even if you have a poor credit score.
- Cards for crypto enthusiasts and investors.
- Virtual cards for advertisements on Facebook and Google Ads.
Pros
- Travel credit cards are cheaper for overseas expenses than standard ones.
- Many travel credit cards offer interest-free purchases and cashback.
- You can get competitive exchange rates on most travel credit cards.
- Credit card purchases are protected by law in some countries.
Cons
- There are monthly or annual fees on some travel credit cards.
- Some cards will charge you a fee for cash withdrawals.
- You will pay high interest for not paying off your monthly balance on time.
- The best credit card deals are not available to people with poor credit.
Do I Stand a Chance If I Have Poor Credit?
If your credit score is poor, you may discover that your credit applications are frequently rejected and the alternatives you have become smaller in terms of loans. Many travel rewards cards are only available to individuals with excellent credit scores.
Therefore, you must raise your credit score if it is currently low; it will not magically improve overnight. You can apply for a secured credit card or become an authorised user of another person’s card while you try to pay your debts off.
For more information on turning poor credit into good credit, read our articles on the common mistakes to avoid when opening credit cards and expenses you should not charge on your credit card.
Travel Credit Card Alternatives
Since most travel credit cards with the best rewards are for applicants with good credit history, it might interest you to know that there are other alternatives you can try. You will find them most useful if your travel credit card applications are being rejected.
The smartest alternative to using a credit card is getting a debit card. As a result, there will not be any chance for you to accrue interest because you will not be borrowing money (except in the case of an overdraft).
Finding a debit card that will not charge you for international transactions or cash withdrawals is the wisest way to go about fixing your situation. Fortunately, we have the solutions on our website. The best alternatives to credit cards for travelling include prepaid travel cards and debit cards from Revolut, Wise, N26, Monzo, Travelex, and Monese. You may also consider e-wallets like Skrill, NETELLER, MuchBetter, and ecoPayz. They allow you to spend money overseas without running into debt. You also do not need to pass a credit check to open accounts with them.
FAQ
The best travel credit cards are those without international transaction fees and those with free cash withdrawals abroad. They include Capital One, Monzo (Premium), and Revolut.
Travel credit cards are made expressly for making purchases abroad. They give you points and rewards for using them overseas. Many travel credit cards will not charge you a foreign transaction fee.
Travel credit cards are ideal for frequent travellers because they can be used anywhere in the world as long as the store accepts credit cards.
Depending on the fees levied by the issuing company, travel credit cards might be expensive. Usually, between 2.75 and 2.99% is the foreign transaction cost for most standard credit cards. Interest on postponed payments and ATM withdrawal fees are additional costs.
However, many of these costs are avoidable with travel credit cards. Both international transaction fees and cash withdrawal (or cash advance) fees are often not charged by financial institutions. The one catch—and it's a major one—is that you will often start to accrue interest from the first day, even if you pay off your debt that month.
Furthermore, keep in mind that certain travel credit cards can include a monthly or yearly fee; it is wise to confirm this before applying.
Online, over the phone, through mail order, or in-person transactions undertaken in the UK and abroad are covered by Section 75 of the Consumer Credit Act.
Certain travel credit cards are not suitable for most people because of their high fees and rigid criteria. Whether you should get a travel card depends on your knowledge of the associated benefits and costs.
The majority of frequent travellers, however, will find a solid match that fits their interests and travel style. You may benefit from travel credit cards by using them in place of cash or debit to pay for your lodging and travel. So, the most important thing is to be sure you can use the rewards.
Your credit score is likely to be reduced if you open and close many credit cards at once. However, a few credit card applications spread out over time will not have a significant negative impact on your credit score. According to the system, every time a credit card or loan application is made, your credit score will slightly decline.
You will not experience any long-term damage to your credit as long as you spread out your applications and make your payments on time each month. If you keep up with payments, your credit rating will increase over time.
Maximise Your Travel Credit Card!
Your taste for travel and daily spending patterns will determine which travel rewards credit card is best for you. However, the procedure starts with properly comparing the credit cards you can access. We have shown you how to differentiate them in this post.
Keep in mind that you should look for a credit card that offers you travel benefits you can use. Look for choices that provide benefits for the kinds of purchases you make, such as international travel, lodging, and shopping.
Finally, whether the travel card comes with an annual charge is also very important. If it does, try to get the most miles, cashback, airport lounge access, insurance, and as many perks as possible to justify the yearly charge.
