Compare travel credit cards
The right credit card can turn your holiday from really great to absolutely perfect. Choose between credit cards that scrap all foreign transaction fees, come with enticing benefits and perks or earn you rewards on your holiday shopping.
What makes a credit card a good travel companion? There are many ways credit cards can improve your trip abroad, from saving a few pounds in fees to making you feel like a VIP with room upgrades and airport lounge access.
The best option for you is going to depend on what you need the card to do. Let’s break it down.
How to choose your travel credit card
Even if you go on holiday only once a year, it’s a good idea to have a separate credit card for when you travel. That’s because your needs will be different when you’re on the road or enjoying the sun on a tropical beach from when the longest distance you travel is that between your house and the office. But how do you go about picking a good travel credit card?
The main decision you have to make is which features you want to prioritise. Here’s a basic list of things you may want to consider when comparing travel credit cards:
Avoid non-sterling transaction conversion fees
When travelling abroad, avoiding foreign exchange fees can be a tough task, but it’s not impossible. When using your credit card overseas, there are three main kinds of fees you should expect and learn how to dodge:
- Foreign transaction fees charged by your credit card provider. They’re charged every time you pay in a foreign currency and can amount up to 3% of the transaction. The only way of avoiding them when paying on plastic is getting a credit card that allows fee-free spending abroad.
- Fees charged by local merchants. When paying with your card, you may be offered the option of paying in pounds instead of the local currency. If you’ve taken out a credit card designed for use abroad (one that offers fee-free non-sterling transactions) you should opt to pay in the local currency, since you know that your own bank is giving you a favourable currency conversion deal. Outside the EU merchants sometimes also apply a surcharge if you want to pay by card and not in cash. If you’re concerned that this may be the case, it’s worth asking about it before picking a payment method.
- Cash advance fees. Almost all credit cards charge you extra for withdrawing cash, both in the UK and abroad. Out of the country, it’s even more expensive because the cash advance fee will add up to the foreign currency transaction fee, so you should only get cash with your credit card in case of emergency.
Finder's pick: The NatWest Credit Card
- No annual fee
- 0% fees on overseas spend
- Low ongoing rates
Representative example: When you spend £1,200 at a purchase rate of 9.9% (variable) p.a., your representative rate is 9.9% APR (variable).
Approval for any credit card will depend on your status. The APR shown represents the interest rate offered to most successful applicants. Depending on your personal circumstances the APR you're offered may be higher, or you may not be offered credit at all. Fees and rates are subject to change without notice. It's always wise to check the terms of any deal before you borrow.
Spread the cost of your getaway
Planning a really great holiday but not sure you can afford to pay for it in one go? With a 0% purchase credit card, you’ll be able to spread the cost over a few months without having to pay any interest on it.
0% purchase credit cards can be great for breaking down the cost of a trip into more affordable instalments, but you really need to have paid the sum back by the time the introductory deal expires. Otherwise, your balance will start accruing interest at the card’s standard rate (which is usually not very competitive). It’s essential to work out a repayment plan (divide your expenditure by the number of months in the 0% deal to work out what you should repay each month) and stick to it to make sure you pay the whole sum back on time.
Finder's pick: M&S Bank Shopping Plus Mastercard
- Purchases 0% for 20 months reverting to 19.9%
- Balance transfers 0% for 20 months reverting to 19.9%
- Earn 1 point for every £1 spent at Marks and Spencer's and 1 point for every £5 spent elsewhere. 100 points = £1 reward voucher. Points will be converted into reward vouchers 4 times a year.
Representative example: When you spend £1,200 at a purchase rate of 19.9% (variable) p.a., your representative rate is 19.9% APR (variable).
Get yourself some hotel perks
A small number of credit cards offer special hotel benefits like room upgrades, priority check-in, later check-out times or the opportunity to earn points that can be redeemed for free stays.
These cards are often offered by the hotel companies themselves and are more suitable to people that travel quite often and stay at the same kind of hotel. If that sounds like you, you’ll be able to make the most of the perks while also earning points quite quickly.
Finder's pick: The Starwood Preferred Guest Credit Card
- Earn reward points for virtually every £1 spent.
- Option to transfer points to the Qantas Frequent Flyer program.
- Enjoy preferential treatment when you stay at SPG and Marriott properties.
Representative example: When you spend £1,200 at a purchase rate of 22.2% (variable) p.a. with a fee of £75 per annum, your representative rate is 38.8% APR (variable).
Travel in comfort with airport lounge access
Airports – not much fun are they? But if you can relax in an airport lounge, you’ll cut out much of the stress and feel pretty smug at the same time. You’ll need to be comfortable with the idea of paying an annual or monthly account fee in return for complimentary lounge access (if that’s a deal-breaker, consider a one-off membership to a scheme like Priority Pass). But on the plus side, lounge access won’t be the only benefit these cards offer.
Finder's pick: American Express Preferred Rewards Gold Card
- 20,000 Membership Rewards point welcome bonus
- 2 complimentary airport lounge visits per year
- No annual fee in year 1
Representative example: When you spend £1,200 at a purchase rate of 22.2% (variable) p.a. with an annual fee of £140 (£0 in first year), your representative APR is 56.6% APR (variable).
Collect air miles with a frequent flyer card
Just like credit cards that offer hotel perks, frequent flyer credit cards are meant for people who fly, well, frequently. If you get on a plane once a year, you won’t be able to make the most of them; if it’s more like once a month, they can really be worth it.
They work just like rewards credit cards, but let you earn air miles on all your spending instead of points or cashback. Usually, you’ll earn even more miles when you use the card to purchase tickets with the card’s partner airlines. You can get both basic options without annual fees and premium options that do charge an annual fee in return for a higher earn-rate.
Finder's pick: British Airways American Express Card
- Earn 1 Avios per £1 spent
- 5,000-Avios welcome bonus
- Refer a friend bonus
Representative example: When you spend £1,200 at a purchase rate of 22.2% (variable) p.a., your representative rate is 22.2% APR (variable).
Enjoy peace of mind with complimentary travel insurance
There are a few premium cards out there that come with travel insurance included and save you the hassle of having to purchase it separately. Expect fairly pricey annual fees in return for a whole lot of benefits, such as airport lounge access.
It’s not easy to calculate when it’s better to get a card that offers it and when it’s more convenient to purchase it separately, but as we said, the travel insurance will usually be combined with other perks, so it’s a good idea to check whether those are appealing to you or not.
Finder's pick: The Platinum Card
- Comprehensive worldwide travel cover (subject to enrolment).
- Complimentary access to over 1,200 airport lounges.
- Earn Membership Rewards points on all your spending.
Don’t let bad credit hold you back
Most of the best travel credit cards require a good credit rating, especially those that offer great rewards or are packed with perks. But there are a few credit builder credit cards that let you swerve foreign currency transaction fees.
Get one of those, and you’ll be able to improve your credit rating while still saving money on your fees when you travel.
Finder's pick: Tandem Bank Journey Credit Card Mastercard
- No fees for making purchases or withdrawing cash abroad
- Used carefully, can build a healthy credit score
- Manage your spending in the app
Representative example: When you spend £1,200 at a purchase rate of 24.9% (variable) p.a., your representative rate is 24.9% APR (variable).
Track real-time spending in an app
We know how it goes: you’re on holiday, buy a souvenir here and an extra ice-cream there, and when you come back and check your card statement you realise you’ve spectacularly exceeded your budget for the trip.
A practical way of keeping an eye on the money you spend while travelling is downloading your credit card’s app on your smartphone. The best mobile banking apps will notify you whenever you use the card and allow you to check all your recent transactions in real time. For example, the American Express app does just that, while also allowing you to set up a spend tracking alert that will notify you when you overspend.
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