What is a travel credit card?
A travel credit card is a credit card with built-in features and benefits that can help you save money when you use the card for overseas spending and get more travel benefits from your card.
The best credit card features for travel include money savings like free foreign transactions and $0 overseas ATM fees, and benefits like frequent flyer points, travel credits, and free travel insurance.
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The world of credit cards for travel
For many Aussies, travel can give us a hands-on experience of all that the world has to offer. But between tasting different cuisines and enjoying scenic locations, you might decide you need a piece of plastic to help you get around and pay for those experiences. If you’re considering getting a travel credit card, here are some things you need to know.
How can a travel credit card help me while I travel?
So you’ve decided to buy a travel credit card for your next vacation, but how exactly can a credit card help you during your trip? Aside from not having to carry a lot of cash, a travel credit card can hold:
- Social advantages – Many travel credit cards come with free concierge services. Not only can they help you book a table in a top restaurant, they can also give you access to exclusive foreign events and discounted travel services.
- Global Acceptance – Since most credit cards are linked to Visa, AMEX or Mastercard, you can rest assured that your plastic will be accepted in millions of places around the world.
- Travel insurance – many premium and rewards credit cards come with free foreign travel insurance. There are insurance criteria to pay some of your prepaid travel expenses on the card, but it can save you money by making a one-way ticket travel insurance.
Can I use my daily credit card abroad?
Yes of course. There’s no rule against using your everyday credit card on your next vacation, but if you’re considering using it or buying a travel credit card, ask yourself a few questions, such as:
- Does it come with foreign transaction fees? – If you plan to take your daily credit card abroad with you, check the fees for foreign transactions. Depending on the card, these fees can range from 2% – 4% of each transaction. And while this may seem like a small fee, it adds up over a 6-week vacation. Some travel credit cards don’t charge a transaction fee abroad, so this can save you some money.
- Should I use it at an ATM abroad? – While paying with plastic has become the norm in Australia, some countries around the world still see cash as king. And if you find yourself in a situation where you have to withdraw cash with a credit card, you can’t escape the hefty cash advance costs. Always use your ATM/debit card or consider using a prepaid travel card for those cash withdrawals.
What are the pros and cons of using a travel credit card?
If you think a travel credit card could be the perfect addition to your vacation, it’s still a good idea to weigh the pros and cons before making a decision.
- Provide a maximum of 55 interest-free days – If you plan to spend a lot of money on your vacation, many travel credit cards offer up to 55 interest-free days, as long as you pay off your balance in full.
- Boost Reward Points – If you like rewards, you can earn rewards and frequent flyer points while spending abroad, meaning you can leave earlier on your next trip.
- Travel benefits – Many cards designed to be used abroad have certain travel benefits, such as free travel insurance, lounge access and rewards programs.
- Lower or no transaction costs – Credit cards designed for travelers generally have lower foreign transaction fees than your standard credit card.
- High annual costs – When looking at a rewards credit card, keep in mind that these cards usually have higher annual fees, so to make up for this make sure you take advantage of all the extra benefits that come with the card such as concierge..
- Temptation to spend – Just like at home, with a travel credit card handy, you may be tempted to spend more than you initially budgeted. So keep in mind that anything you buy abroad will eventually have to be refunded, so when you go shopping for souvenirs, really ask yourself if you need that replica Eiffel Tower statue.
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