Choosing A Credit Card For Travel

With so many credit card options, it can be an administrative nightmare to work out which is the best one. Different cards have different features that may suit some people better than others. So in this article we are concentrating purely on credit cards designed for travel. We'll take a look at the features available on various cards, interest rates, safeguards as well as all important reviews from members of the public. This article is written for the UK market, however many of these companies are international and supply very similar cards to different markets (although always check this before applying).

Before we look at the options available on the market, you should be aware that every card application you make may leave a mark on your credit record. This mark isn't necessarily bad, it's just put there to let other companies you apply with that you've made a prior application. If you have too many of these marks (through making too many applications), it will lower your chances of being accepted for credit in the near future. So don't go and apply for all of these cards at once! Select the one that sounds best for you, both in terms of your credit rating and the features on offer, and make your application.

The Options

Credit cards sit in a rapidly changing market, so although these cards at the best (we think) at time of checking, try to make sure that features and terms haven't been changed since. Travel cards come in many different forms, with many features so let's take a look at our favorite cards for each feature.

Airline Points

If you're traveling now, you're probably likely to travel again in the future, so an airline point card will help you save for your next trip whilst you're on your current trip!

Lloyds are offering a good deal where you can collect 1.25 Avios per £5 spent on their Premier Avios MasterCard (Or per £1 on the Primer American Express). The purchase rate is reasonable at 13.95%pa and although the representative APR of 23.7% is touching on the high side, it's far cheaper than comparable offerings from American Express and Virgin Money (56.4% and 52.1% respectively). The points can also make up for it if you fly frequently, especially if you intend to pay off your balance each money and avoid interest payments altogether! An additional bonus is that you collect double the points when you're abroad and can get a worldwide companion ticket if you spend £15k in one year.

You can also get cards that offer hotel points, but then you're really limited to a particular hotel chain – at least with airline points you can go pretty much where you choose!

Overseas Spending

Clearly, one of the prime features you want for a travel credit card are low foreign usage fees. Saga do a decent looking card with no European usage fees, but with the catch that you have to be over 50 and there is no reward scheme. In this instance we prefer the Nationwide Building Society Select Card.

This card has a number of good looking features such as 0% on balance transfers for 20 months, unlimited cash back of 0.5% on all sterling purchases (if you have a Nationwide account) and a low APR of 12.9%. The main feature we're looking at here however is the unlimited commission-free purchases whilst aboard. The caveat here is that you need to have a Nationwide FlexAccount to get the card. For those that don't then Nationwide also offer a similar card where you can earn commission free purchases abroad by using the card for sterling purchases. If you don't want to earn your rewards then take a look at Halifax's Online Clarity Card; you get 12.9% APR, there are no balance transfer fees and best of all there is no fee to use the card anywhere worldwide –  you should be aware that rates can vary however up to 21.9% APR.

Insurance

If you prefer security over financial gain, then what could be more beneficial than a credit card that wraps up travel insurance into a nice little bundle? Unfortunately, most credit cards don't offer travel insurance unless you pay an annual fee. It is usually far more cost effective (if you travel frequently) to get travel insurance from your bank (most accounts offer it as an add on service, some offer it as standard). For as little as say £5 per month, you can insure you and your family whilst traveling locally and abroad –  however, be sure to check the terms of the policy to be sure it suits your needs, usually policies are offered in a tiered structure and you may need to pay a little more to get the cover you require.

Also by seeking your travel insurance elsewhere, you can focus on getting a card with a cheaper rate or other features which are more desirable than you might get on a card with travel insurance.

Overall

Looking at the options as a whole, one of the better cards appeared to be the Post Office's platinum card. They're offering a representative APR or 16.9%, with a balance transfer rate, no fees on overseas purchases and additional free purchase protection. Now you may be asking (like me) what the purchase protection involves as all credit cards are required to give you certain protection against scams or unwanted goods –  having looked into it, the card supplies you with additional protection from loss or theft for 90 days.. which is definitely reassuring if you're planning to make purchases abroad… you'd need to pay for the goods directly with the card rather than taking money from a cash point, but it's still a great feature to have. The card also has the added bonus that if you use it to pay for your travel money a the post office, there is no cash fee! Which is great if you're intending to get your travel money on credit before you leave.

Which ever card you choose, always remember that you should;

  • Protect your pin carefully at all times and especially whilst aboard.
  • Be aware of any charges that may be involved whilst using your card abroad
  • Make sure you know how long your interest free period is, in case you're looking to clear your balance regularly
  • Understand what is meant by dynamic currency conversion.
  • Enjoy your trip!

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Peter has been working in the finance industry for over a decade and in his spare time likes to share his knowledge with consumers with the hope of helping others avoid pitfalls, expensive charges and avoidable problems.