Justine Rivero | The Christian Science Monitor |
Jul 02, 2011
Is world travel on your horizon this year? Bringing the right credit card is as fundamental as packing the right wardrobe. While there are great benefits to using plastic abroad – such as travel assistance and fraud protection – the cards’ foreign transaction fees can eat into your travel budget. And traditional magnetic strip credit cards aren't universally accepted overseas anymore. Picking the right card for a foreign trip depends on the perks you’re looking for, the fees you’re willing to pay, and the kind of credit you have. Here are Credit Karma’s Top 5 credit cards for world travel:
#5 Best no-hassle, no-fee card – Capital One Platinum Prestige Credit Card
Why we recommend it:Most credit cards have foreign transaction fees that add 1 to 3 percent to every transaction made abroad. If you plan to swipe often or for big ticket items, those fees quickly add up. The Capital One Platinum Prestige Card is a great choice for travelers, featuring no-hassle perks and no annual fee. Capital One is the only major issuer that doesn’t charge foreign transaction fees and you'll see a few Capital One cards on this list. In addition to no foreign transaction fees, the Platinum Prestige card offers 0 percent interest until September 2012 on balance transfers and purchases, so you can save money on interest charges if you have a large balance after vacation. Plus, the interest rate resets to a low 10.9 percent APR, which makes its it an all-around good credit card for everyday spending at home as well as your go-to credit card for world travel.
Drawbacks:You need an excellent credit score to qualify for this credit card.
#4 Best card for frequent globe-trotters – U.S. Bank FlexPerks Travel Rewards Visa
Why we recommend it: While the United States still uses magnetic strip credit cards, the standard in European and Asian countries nowadays is EMV microchip technology embedded in the card. As a result, your current credit or debit card may be declined by some merchants abroad. To make sure you never risk that issue, U.S. Bank’s FlexPerks Travel Rewards Visa is one of the few US credit cards that features both EMV chip technology and the magnetic strip. For those who often travel internationally, having a credit card that will be accepted anywhere is a necessity. FlexPerks Travel Rewards Visa has a solid rewards program as well, with bonus offers and an earning base of 1 FlexPoint for every dollar spent to be redeemed for airline miles and various travel rewards.
Drawbacks: This card charges a 2 percent foreign transaction fee for every purchase and also requires a $49 annual fee after the first 12 months.
#3 Best rewards-earning card – Capital One Venture Rewards Card
Why we recommend it: If you’re looking to earn great rewards for all the spending you’ll do abroad, Capital One makes the list again with the Venture Rewards Card. In addition to the benefit of no foreign transaction fees, the Venture Rewards Card has one of the best rewards-earning programs with double miles for every dollar spent. Plus, you can convert the miles to cash value for travel-related purchases. Capital One is currently running a promotion to earn 25,000 bonus miles – or $250 in travel – when new cardholders spend $1,000 in the first three months. Earning double miles or points is great on this card because it can be redeemed for any airline or hotel of your choice with no expiration or blackout dates. You can earn free miles and nights for use on your next vacation while you’re making purchases on your current vacation.
Drawbacks: This card requires excellent credit and also has a $59 annual fee (waived for the first year). This card is best used if you can rack up enough rewards to justify the annual fee.
#2 Best card for ultimate travel perks – The Platinum Card from American Express
Why we recommend it: If you're a high roller with high-class travel expectations, the Platinum Card from American Express offers it all. The card’s exclusive benefits and travel privileges make it a staple among affluent travelers. The best benefits include club access to airport lounges worldwide (typically around $400), expedited travel arrival at airports (around $100), $200 in airline fee credits annually to cover incidental fees, complimentary benefits and special amenities at more than 700 hotels worldwide (upwards of $450) and 24/7 Platinum Card Concierge to get you everything from dinner reservations at Michelin-rated restaurants to private jet access. These perks are in addition to travel protections such as car rental loss and damage insurance, travel accident insurance and purchase protection. Finally, as a charge card there is no preset spending limit and no foreign transaction fees. It’s your unlimited ticket to luxury when traveling abroad.
Drawbacks: This charge card has an immense $450 annual fee and requires excellent credit to qualify. Plus, with a charge card, you'll need to pay off the balance in full every month.
#1 Best travel card for consumers with poor credit – Capital One Secured MasterCard
Why we recommend it: Even consumers with poor credit can benefit from a great travel card. Capital One Secured MasterCard may be the only secured credit card designed specifically to help consumers build their credit with no foreign transaction fees. Secured credit cards require a security deposit that typically hovers around $200, but Capital One's Secured MasterCard requires a deposit as low as $49. While consumers with poor credit should be extra cautious to stay well below their credit line, there are great benefits to using a credit card while traveling. The Capital One Secured MasterCard is accepted anywhere MasterCard is accepted, and MasterCard protections include identity theft resolution, zero liability on unauthorized charges, travel assistance, roadside assistance, MasterCard Global Service and more. This credit card allows you to spend with added security and card benefits while abroad, all while building your credit.
Drawbacks:Like most secured cards, the Capital One Secured MasterCard comes with an annual fee of $29 and the credit line cannot exceed $3,000.
Justine Rivero is the credit advisor for Credit Karma ,a credit management and education company for consumers and based in San Francisco.
Americans have been finding it increasingly difficult to use their credit cards when traveling in Europe and elsewhere and the main reason for that is the spread of the chip and PIN technology. EMV-enabled terminals are typically not equipped to read magnetic stripes.
What makes matters even worse is the human element, as many Americans have discovered. European sales clerks are so used to chip-and-PIN types of cards that they often just don’t know what to do with signature-based ones, even if the equipment supports them. “You have to argue with them to use the card,” is how one traveler described his experience. http://blog.unibulmerchantservices.com/wells-fargo-to-test-chip-and-pin-credit-cards
Whether you’re trying to rebuild your credit history or establish credit for the first time, the secured credit card from Public Savings Bank is great option to help achieve your goals. No credit check or checking account required and reports to all 3 major credit bureaus.
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