Nerd Q&A: What Are the Best Credit and Debit Cards to Travel With?
Welcome to what will hopefully be the first of many NerdWallet Q&A sessions! If you have a question about credit cards, financial institutions, or all things nerdy, we’d be glad to help you out.
I’m leaving for Thailand with the Peace Corps for 27 months. What credit/ATM card should I use to minimize the transaction fee and the ATM charges? I have a Wells Fargo checking account. They charge a 3% international transaction fee and have an ATM charge. I was thinking of changing to ING, but I’m not sure that’s a better choice. Can you give me some advice? Thank you. -V.S.
When you’re traveling abroad, your biggest concern will definitely be the foreign transaction fee. The industry standard is 3%, which really eats away at your budget, especially if you’ll be there for 2+ years. A waived foreign transaction fee is a must-have. But there are a few other considerations to take into account:
- Many credit cards (including most Visa cards) come with travel protections. I hope you’ll never need these resources, but the protections can include accidental death and dismemberment insurance, emergency travel arrangements, and a travel hotline that can connect you with legal or medical services.
- If you have a credit card that gives bonus rewards at, say, restaurants, it’s important to note that you won’t get extra rewards unless the restaurant classifies itself as such. It’s less likely that restaurants in Thailand will be accurately categorized.
- Like you noted, it’s kind of hard to find Wells Fargo ATMs overseas. They charge $2.50 for a non-Wells Fargo ATM withdrawal in the United States and $5 for an international withdrawal.
- You may want to rely primarily on a credit card rather than a debit card. In case of fraud, your credit card liability is capped at $50. If your debit card is compromised, however, you’re on the hook for $50 if you report it missing within 2 days and $500 if you report it within 60. If you miss the 60-day window, you’re on the hook for the whole amount. You’re better shielded from fraud loss with a credit card.
So based on these, you’re looking for a credit card with a) no foreign transaction fee, b) all-around rewards instead of specific bonus categories, and c) travel protections. We’ve compiled a list of cards with no foreign transaction fees, but here are our recommendations:
If you’re willing to pay annual fees: The Capital One Venture Rewards card fulfills all three criteria. It has no foreign transaction fee, and gives an impressive 2% back on all purchases, no merchant registration needed. Plus, it’s a Visa Signature, so you get travel accident insurance and emergency assistance. It pays out in No Hassle Miles, which you can use for travel – your triumphant return to the US, perhaps? The card does come with a $59 annual fee, but it’s waived the first year.
If you’d rather not pay a fee: The Capital One Cash has your name written all over it. Like all Capital One credit cards, it has no foreign transaction fee, and it gives a solid 1.5% cash back on all purchases. Its rewards are more versatile – there’s nothing easier to redeem than cash back – and as a World MasterCard, it provides travel accident insurance and travel assistance services.
Next step: find a good debit card. You’ll want something with no foreign transaction fee (or a low one – it’s much harder to find debit cards with no F/X fee) and, preferably, one that allows for free international withdrawals or has a worldwide ATM network. Among your options:
- The Capital One Interest Online checking account is, as far as I’ve seen, your best bet. The debit card has no foreign transaction fee (really, really rare), and gives you free ATM withdrawals at CapOne ATMs worldwide, and actually reimburses any ATM fees up to $25/month. The account also has no monthly maintenance fees, so you don’t have to worry about minimum balance requirements. Remember to call them to warn them of your departure, so that they don’t freeze your account when you make your first international purchase.
- Credit unions often reimburse you for ATM fees, if you meet certain criteria. The CUs I use, Lake Michigan and Consumers, reimburse you for up to 5 withdrawals per month if you have direct deposit set up, make 10-12 transactions a month and log in to online banking. Many credit unions do waive the foreign transaction fee, though.
A word of warning: many debit cards (and credit cards) will advertise “zero liability” in the case of fraud. Read the fine print closely. The claim may be “zero liability if you report the card stolen before a purchase is made,” which is what the card issuers are legally obligated to do.
Hope this helps! Good luck in Thailand.
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