By Samuel Greengard | American Express Credit Intel Freelance Contributor
5 Min Read | March 18, 2020 in Cards
Some of the best credit cards for international travel can help you feel better prepared for the unexpected—while saving money.
Choosing a credit card that matches your travel plans can help maximize your benefits and help minimize your costs.
Look for perks like no foreign transaction fees and travel insurance benefits.
Few things stir the imagination more than international travel. Yet, whether you’re interested in strolling along the banks of the Seine in Paris or trekking across the Altiplano (high plateau) of Bolivia, there are plenty of practical considerations—and things that can go wrong.
You could encounter delays and interruptions due to a canceled flight, for example. Or you might find that you’re paying costly foreign transaction fees whenever you use your credit card. While there may be no way to steer clear of every challenge, the best international travel credit cards can help to reduce your stress and save you money.
Here are six tips for choosing the best credit card for international travel.
Although there’s a dizzying array of travel credit cards, selecting the best credit card for international travel doesn’t have to be overwhelming. If you’re loyal to an airline, consider a branded credit card that lets you earn miles in the airline’s loyalty program. If you fly with different airlines, look for a card that earns points and lets you apply them towards tickets on a variety of airlines. If you prefer to use a specific hotel chain when traveling, consider a hotel credit card. In some cases, it may make sense to have two or even three credit cards for international travel that you use for specific purposes, such as flights, hotels and rental cars. Some basic travel credit cards have no annual fee, although premium travel credit cards generally charge a fee in return for more extensive perks.
And if you’re a very extensive traveler, a great under-the-radar perk comes when you choose a card provider with smart fraud detection capability. That can help you avoid disruption from declined charges when you’re away in a far-off land—though it’s always a good idea to proactively inform your card company when you’re globetrotting.
Adding your credit card to your phone’s digital wallet may make some international payments easier and could even provide some security advantages.
Paying with digital wallets bypasses the usual signature or PIN requirement by automatically authenticating the transaction.1 And these wallets do so without revealing the credit card number to the merchant, making the transaction more secure. Another advantage of a digital wallet is that it may help you avoid pickpockets and lost billfolds. Consider this: on a trip to New Zealand in early 2019, I used digital payments for nearly every credit card transaction over two weeks. This could be an excellent approach to credit cards for international students.
But don’t neglect to carry your physical credit card too, although you might want to keep it somewhere that’s less obvious to potential thieves. Digital payment services may not work or be accepted in every country or at all merchants.
With some credit cards, you pay foreign transaction fees of around 3% whenever you make a purchase abroad in a foreign currency. You may consider these fees an acceptable expense when traveling internationally. But they can make more than a nickel-and-dime impact on your pocketbook. For example, if you use a credit card that charges transaction fees and you spend $2,500 over the course of a trip, you could be forking over $75. For international travel, it’s usually best to have a no foreign transaction fee credit card, letting you keep that money in your wallet.
If there’s one thing that’s predictable when travelling internationally, it’s that life can get unpredictable. Your bags may be delayed because they didn’t make it onto the plane. Your trip could be delayed or interrupted due to a canceled flight.
Although you can protect yourself against some of the costs of these problems by buying a travel insurance policy, that approach can get expensive: depending on the level of coverage, it can easily add 5 to 10% to the total cost of a trip.
However, some of the best credit cards for international travel usually provide some type of protection without the cost of an additional policy. For example, some travel credit cards include travel accident insurance if you pay for your trip with your credit card, as well as insurance for lost or damaged baggage and trip delays and cancellations.
There are three main ways to cover the cost of rental car insurance when traveling internationally:
If you own a car, your auto insurer may include coverage for rental cars in your insurance policy. However, if you rent a car and you’re involved in an accident, you could wind up having to pay the rental car company out of pocket and then wait weeks for your insurance company to reimburse you. As an alternative, you could pay the rental car company for collision damage waiver (CDW) coverage, which covers the expense immediately—but that can cost up to $30 per day, or even more in some cases.
One way to cover some or all of these potential expenses is by seeking out a travel credit card that includes a rental car insurance benefit for loss or damage. Some credit cards include this coverage free, while others charge a small fee regardless of the number of days.
Some of the best credit cards for international travel often include other perks that can help smooth your journey and save you money on international travel.
While international travel is fun and fulfilling, there are many practical considerations—and potential unexpected surprises all along the way. Seeking out the best credit card for foreign travel can help you save money while possibly even reducing your stress.