There a lot of options for credit cards and depending upon your lifestyle, travel preferences and credit, there is probably a card out there that is tailored to you. For us, we cared about minimizing fees, both annual and transactional, and maximizing the benefits we value. Pretty obvious right, well sort of. First you have to figure out which cards you qualify for, what benefits you value most, and what costs you are willing to pay for that card. NerdWallet has a GREAT article detailing various credit cards that are suited for travellers.
Avoiding Credit Card Fees
There are a number of fees associated with credit cards. We won’t spend time talking about interest rates and APRs. Instead, we will focus on membership fees and international transaction fees.
Often rewards cards will require an annual membership, but despite popular belief, there are some great options out there that have no membership fee. Also, check with your bank. If you are already a customer of a specific bank, they may waive your annual subscription altogether or at the very least, for the first year. We opted for a card that has no annual fees.
International Transactions Fees
This is a big one if you plan to do a lot of international travel. Your credit card will charge you a percentage of each transaction amount that was processed in another currency. Similar to ATM charges, this can add up very quickly while traveling abroad. Any good credit card for travel should not charge you these fees. If your card does, it’s time to change.
Reward Points versus Cash Back
There are stalwarts in both camps. We have never been huge followers of the popular travel rewards or travel points cards. Call us old fashion, but we like the percentage cash back cards. The rewards from a cash back card are more tangible. It is easier to grasp that you are getting 1%-2% cash back on each purchase, rather than some number of points which can be used towards a flight between some specific date range and with participating airlines. Again, for some, such as Chris Guillibeau the author of The Art of Non-Conformity reward point cards can be a great option. And if you take advantage of credit card or airline sign-up deals where you can get 20,000+ points, double points purchases, or frequently fly with specific airlines the rewards points option may be worthwhile. The New York Times recently (02/2014) published an article about the costs and benefits of striving for racking up airline miles / points.
For us, the Capital One Quicksilver Cash Rewards card was handsdown the best option while we traveled. You’ve probably seen the commercial for this one with Samuel L. Jackson of Snakes on a Plane fame. Here is why this was the best option for us:
- No annual fee
- No foreign transaction fees
- 1.5% cash back
- You can get this card through multiple credit card companies such as Visa, Mastercard, ect. This gives you some options and flexibility since almost no one in the developing world will take American Express.