06 Oct Choosing a Travel Credit Card 2018
We’ve been saving to go travelling for years and have a fair bit in the bank by now, so why do we need a credit card? It all started when we were researching New Zealand car rental prices. We found a cheap company and were ready to book – until they informed us we’d need a travel credit card to proceed. So now what?
*Update as of 2018: we’ve managed to rent cars in New Zealand, Australia, Europe and the USA using just one credit card as security. We still have our Halifax cards and they remain the best travel credit card we can find if you’re from the UK. You can read about the best debit card for travel in this post.
We were both extremely reluctant to take out a credit card, to our minds they just spell extortionate interest rates and unnecessary fees. Unlike Andrew, I have had a credit card before. When I was 18 the bank offered me one and I naively thought, why not? I used it to pay for holidays at first, then when I went to University I started using it for small things too, like my food shopping.
By the time I graduated I had a few thousand pounds of debt on my card, which took a year to pay off. Never again, I vowed, as I finally realised just how much money I’d shelled out in interest along the way. So, it was with great reluctance that we started investigating using credit cards abroad.
What are the Best Credit Cards to use Abroad?
Obviously, we want to avoid credit card charges abroad. In fact, we don’t really want to use a card at all, except for car rentals and emergencies. We briefly considered using prepaid travel credit cards, but unfortunately the damn car rental company won’t accept those either. So, since we’re forced to get a credit card we want to pay back the balance immediately from our current accounts whenever we use it to make sure we don’t get charged interest.
With that in mind we searched the internet to find the best credit card for travelling, here’s our travel credit card comparison. None of these cards charge a credit card foreign transaction fee.
|Travel credit card||Cash withdrawal fee||Purchase fee||Interest rate for cash withdrawals||Interest rate for purchases|
|Aqua card||3% per withdrawal||0%||From 40-60% APR||From 34.9% APR|
|Halifax Clarity||0||0%||From 12.8% APR|
|Post office||£3 / 2.5% per withdrawal||0%||From 24.1% APR||From 16.9% APR|
*Information from Money Saving Expert
So which Travel Credit Card did we choose?
We are now the (not-so-proud) owners of two Halifax credit cards; mine has a £600 limit and Andrew’s has a £700 limit (that has increased to £1,700 in 2018). Don’t ask me why, considering Andrew has never had a card before – credit rating is a strange beast. So, problem solved, right? Not quite…
Turns out the car rental company require us to produce a credit card with a £1,300 limit and no, we can’t use both cards combined. So now we’re left with having to hope we can increase that limit just before we leave; we’re still trying to get a hold of the local branch of the car rental company in Auckland to find out if they’ll bend the rules. Fingers crossed things will work out.
Oh, and it looks like we also need to get an International Drivers Permit to rent a car in Australia, which is another task to add to the travel checklist. How is it that the list is growing instead of shrinking? You can also check out our travel packing list and an updated guide on how we manage our finances while we travel.
What do you think is the best credit card to use abroad?
Steph (@ 20 Years Hence)Posted at 06:54h, 07 October
Just remember: interest rates only need to be worried about if you don’t pay your entire balance off at the end of each statement! Tony & I never carry a balance on our cards, so we never worry about interest rates…
One nice thing about living in the U.S. is that there are tons of credit cards on offer, many of them with pretty sweet deals. We went with a credit card that gives us tons of travel perks; consequently we were able to trade in points we earned for plane tickets and had to pay for very little of our initial flights to Japan! I don’t know if the UK has such promotions, but when used smartly, credit cards can be a traveler’s best friend!
AmyPosted at 17:18h, 07 October
Hi Steph, many of the cards we found charged interest immediately on withdrawing cash from ATMs, which was a pain – obviously we just won’t withdraw cash to avoid that. We’ve found a good bank which will let us use a debit card abroad to withdraw cash without charging us anything, so that’s a better option. Mainly we plan to use the credit card for things like car rentals. Sounds like credit cards are a bit in the US, there don’t seem to be such good deals over here unfortunately.
HannahPosted at 04:58h, 19 October
I’m from the UK as well, and we went for a Caxton FX World Traveller card, a pre-pay credit card. I’ve had debt problems in the past and was not prepared to ever go back to having a proper credit card, so this was a happy medium, though it actually turned ut to be the best option regardless. They don’t charge you fees and offer a great exchange rate. My partner and I have both have one, and are really happy with them so far.
AmyPosted at 08:32h, 19 October
Hi Hannah, thanks for commenting! The Caxton card sounds like a great option, had it not been for the car rental issue we definitely would have considered a pre-pay card. I too am dubious about getting into credit card debt again and hope we never have to use it otherwise.