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Travel Credit Cards for Globetrotters | Why You Need One!

credit-card-logosTravel credit cards are so integral to being not only safer when you travel but they can also get you cheaper flights, more competitive conversion rates, and lots of other free swag. Bottom line, the Globetrotter Travel Tip is:

Credit Cards are a greater asset than cash*

But you’ll have cash too.

Regardless of how long you will be travelling, you should have another credit card that is not associated with your main bank account. The main reason I see for this being important is that should you have any issues with your main bank account, or your travel credit card, you have a back up and your trip will not suffer. Depending on where you are travelling, something fraudulent could occur, and although credit card companies are so great at catching these their investigation could put your account on hold. A back up card saves you in these situations. A good friend of mine explained to me recently that they were travelling with a friend in Southeast Asia when that person, late on a Saturday night went to take out some extra money from a local ATM near where they were partying. The ATM simply ate their card and would not spit it out. Luckily, she had great friends who helped her out until the bank opened on Monday. What a heart wrenching experience.

Better Currency Conversion Rates

Credit cards will always give you the best currency conversion rate closest to the rates you see on XE.com or Yahoo Currency (My personal favourite). You should always avoid exchanging too much prior to travelling, and only have some basic amounts for things you might need in transit. Exchanging large amounts of cash is not only unsafe, but you will not get as good of a rate at places like airport currency exchange booths as they are a business lower down on the cut than the banks which take an even larger piece of the exchange pie. Globetrotter Travel Tip: Always use well lit ATM’s from the more popular banks of the world. This is social proofing at its core. I feel much safer that should I need to dispute a withdrawal, that I will have a better time dealing with HSBC rather than HappyFunTimeBank Inc.

Research the area you are going

Credit Cards are used all over the world but may not be the more exclusive method in some areas. For example, I found that in Cuba cash was king. In Veradero there was one, yes one, bank machine. On a Saturday night when you’d rather be enjoying caiperenas  at Calle 62 you won’t want to be waiting in a 20 people deep line to get some CUC (That was just fun to write). As you’ll read below, make sure you go over the fine print of your credit card to ensure you are getting the best conversion and that you aren’t paying more than you are withdrawing

Credit Cards can make you money

tpg-ticket-logoIf you choose the right travel cards you can get more benefits than you may know. These could come in the way of giving you travel insurance, perks like access to airport lounges, and above all, points that you can use for future flights and other swag. The best site I think for navigating the different types of credit card and reward programs is The Points Guy. The team there has done an amazing job at breaking down how to choose the right card for a beginner.

What you should look for

There are three things that you should ultimately decide when you are deliberating on the best credit card for you.

Bonuses at sign-up

You should only sign up for cards that have a sizeable sign-up bonus. These should be in the thousands of points amount and will start you on your way to a free flight. You should also research a generic flight you could see yourself taking in the future and see how many points this costs, so that you can cross reference to the actual price of the flight to see a point per dollar value. (If a round trip flight costs about $650 on a site like CheapoAir.com, and is valued at 50,000 points on your credit card perks site, you can see that each point is valued at .013 cents). You will also want to see how hard it is to earn further points, which brings me to…

Bonus PointsAeroplan_Logo

You will find that most credit cards offer the equivalent of one point for every dollar spent. Even better than this are the credit cards that are aligned with retailers that when you shop there you earn double points or at least a lot more than one per dollar. For me, I have an Aeroplan points card, but I also have a bank account whose credit card partners with Aeroplan. So when I make a purchase at an affiliate partner, like say, a gas station. I pay with that credit card and earn the points from it, swipe my points card to get the points from that and it is multiplied by the partner agreement. So for one transaction I need to make anyhow, I have now made 4 times the points of a normal transaction which goes towards free flights and other merchandise. Bonus points are a glorious thing.

Keep an eye on the ‘Required Minimum Spending’ for a credit card

In order to give you some of the large bonuses, many credit card companies have a required minimum spending amount  before you qualify for the bonuses. Make sure you read this fine print and only sign up for a card you’ve researched and has a qualifying requirement of about $1000 or under.

Avoid Foreign Transaction Fees

The lions share of credit card companies charge a fee when you use them overseas. It’s counter productive if you are trying to save money by getting a competitive exchange rate, but you are paying to use that card for each transaction. That’s silly. So make sure you review the fine print.

If you are willing to put in some time and effort to research, you can get lots of perks and airfare discounts before you venture out into the wild world. The best Globetrotter Travel Tip I can give is that A Travel Credit Card is only worth the advantage it gives you for back up funds and discounts, so make sure you pay off whatever you use! 

What has your experience been with Travel Credit Cards? Leave us a comment below.

-Happy Globetrotting