We all know that having a credit card that earns us points or cash-back is a travel junkie must but are you confused about the differences between cash-back and travel reward credit cards? There is a lot to know. Figure out how to choose the right credit card for your goals, including a list of current top-rated cards to look in to.
The right answer for many digital nomads depends on your spending goals. There are certain factors that you can take into account before making the right decision. No monthly fee, o% surcharge, or commission on a foreign transaction and ATM withdrawals and no currency exchange rate commission. Third-Party ATM fee limit should be on the higher side.
There are various ways people use to carry money abroad. It includes cash, international debit or credit cards like Amex platinum, Chase Sapphire Reserve, SPG American Express, prepaid cards, travel cards and others. Revolt and N26 are popular options in Europe. The first option is better as it offers the opportunity to control everything through an app. The best advice would be to use credit cards powered by both MasterCard and VISA.
Of late, travel credit cards have gained popularity due to their ease of use and the benefits offered. By allowing multi-currency transactions, the cards have become a hot favorite among globetrotters. With almost every bank offering the cards, it is a little confusing to choose the best one. To make it easy for you, here is a quick guide to what makes a best credit card for travel.
You can use it to be aware of the important things you need to look for while choosing a travel credit card and apply for the one that suits your needs.
1. Welcome bonus
Even before talking about the welcome bonus, one thing you need to know about travel credit cards is that unlike regular credit cards, travel credit cards do not offer reward points. Instead, they allow cardholders to accrue air miles. It can be redeemed for flight tickets, hotel booking, and other travel-related transactions.
The welcome bonus, also called sign-up bonus, is offered on most of the travel cards. The best are those which offer air miles, flight tickets or coupons for flight or room booking, as part of their welcome bonus programme.
2. Miles per spend
Travel credit cards offer air miles instead of reward points. Hence, you need to consider the number of miles offered per spend on various credit cards. Choosing the one that offers the maximum number of miles would allow you to earn more number of miles on a single transaction.
Banks allow you to accrue miles on both airline and non-airline transactions. However, less weightage would be given to non-airline transactions. If you are lucky enough you may come across a card that offers equal weightage on both transactions. Pick that one to get more miles in short time.
3. Airlines
Some travel credit cards restrict the card usage to one specific domestic airline and its international partner. It is better to avoid such cards and go for those that allow you to book on any airline.
4. Maximum validity period
No matter how many miles you get per spend, the validity of miles plays a key role. If a travel credit card offers a huge number of air miles but a shorter validity period, you cannot reap the benefits of the card. Choose a travel credit card that provides no expiry miles and allows you to redeem the same at any point in time.
5. Transaction fee and other charges
An important factor to consider while comparing various travel credit cards is the transaction fee and other charges related to foreign transactions. Almost every bank charges a transaction fee. Hence, you need to choose the one that offers the best rate.
Always choose a credit card with low or no foreign transaction fees, a decent currency exchange rate, and preferably a low or no annual fee. It depends on how often you plan on using your credit cards overseas, and it also depends on whether you plan to pay off absolutely 100% of the balance every month or to have an outstanding balance.
If you plan to keep a balance, then obviously you will take into consideration of the interest charges and the interest rate.
6. Lounge access
It would be an added advantage for you if your travel credit card offers complimentary lounge access at airports. As the cards are specifically meant for travelers, many cards offer the feature. Hence, choose a card that provides you with the most number of free lounge visits at airports.
7. Insurance and fraud protection
Will be using a travel credit card at foreign locations? Choose a card that offers protection against fraudulent transactions. It would protect you in times of credit card scams. Further, you can also consider the cards that come with travel insurance coverage compared to the ones that don’t offer one.
Travel credit cards also offer complimentary access to clubs, airport lounges, and hotels. Whenever you are applying for a credit card make sure you choose cards with the highest credit limit. Go through all the benefits offered by the card and best travel credit card offers instead of focusing only on one aspect.