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Many of the perks and bonuses provided by credit cards are good only in the U.S. — a bummer for those Americans who don't primarily travel domestically.
Here are some tips and tricks for planning a smart credit card strategy if you frequently travel abroad.
1. Choose a card with no foreign transaction fees
First and foremost, if you’re going to spend a lot of time overseas, you need a card that’s not going to charge you foreign transaction fees. Foreign transaction fees usually average around 3% and can quickly add up if you’re using the card for international purchases.
Though most of the cards that waive foreign transaction fees carry an annual fee, they often have perks and benefits to help offset that fee.
2. Compare major credit cards’ international travel benefits
In general, you'll want to look for perks and credits that apply to international charges. Here's how each major credit card company stacks up.
American Express travel credit cards
American Express credit cards often offer lounge access, bonus points on airline and hotel purchases or even credits for Global Entry, making them great for travel. However, many AmEx perks are restricted to U.S. purchases only, rendering them unideal for the international traveler.
For example, monthly use-it-or-lose-it Uber credits are valid only in the U.S., despite Uber’s international presence. Further, AmEx cash-back offers are mainly for U.S. merchants, and the ability to earn extra points for supermarket and gas purchases is limited to U.S. transactions. Using your AmEx credit card for these categories while abroad will not result in any bonus points.
If you spend most of your time in the U.S. and can maximize these credits, AmEx’s credit cards are good travel companions. Otherwise, you may want to look closely at AmEx card benefits before signing up, as you'll ideally want to find an AmEx credit card that awards equal points for international and domestic purchases.
Chase travel credit cards
Many premium Chase travel credit cards also offer statement credits and extra points on bonus categories; however, with Chase cards, you’re not restricted to U.S.-only purchases.
What's more, Chase has a partnership with Lyft that allows its cardholders to earn bonus points on Lyft charges. Although Lyft doesn’t have a large international presence yet, you still earn the bonus on international Lyft purchases.
Premium Chase travel cards also offer extra points for global travel, dining and grocery purchases.
Citi ThankYou credit cards
Citi ThankYou credit cards offer bonus points on worldwide purchases in various categories including restaurants, supermarkets, gas stations, airlines, hotels and more.
If you’re planning on spending a lot of time abroad, a Citi ThankYou point-earning card would allow you to rack up bonus points whether you’re in the U.S. or elsewhere.
Capital One credit cards
Capital One premium travel credit cards don’t offer much in the way of special bonus categories or statement credits. However, if you’re just trying to rack up Capital One points, you’ll earn the same rate worldwide.
3. Consider holding more than one credit card
Depending on where you travel to, stores abroad may have different rules about which cards they accept. Some accept all cards; others accept only Visa and Mastercard, but not American Express. Sometimes, a merchant will ask you to pay extra fees for using an American Express card.
On other occasions, your card will get declined for no reason and you’ll either need to use another card or pay with cash. The latter can be especially frustrating if you don’t have any cash and need to go to an ATM (or would simply prefer to earn points on your purchase).
For this reason, it makes sense to carry an extra point-earning travel credit card — ideally from a different issuer — especially if one of your cards is an American Express card. You may opt for a no-fee card as your second option, just look for one with no foreign transaction fees.
4. Favor cards with travel-related redemptions
So now that you know which strategies to employ to maximize your point earnings, what about redemptions? Some premium travel credit cards offer a plethora of airline and hotel transfer partners, while others allow you to redeem for travel purchases at an accelerated rate. Some cards call themselves "travel credit cards," but the points can be redeemed only for Amazon purchases or cash back.
Although this is a personal choice and there is no one-size-fits-all credit card for everyone, you’d generally get a better value when transferring your points to airlines and hotels than opting for cash back. When you’re considering a travel credit card, look at the best uses of the card’s points system as part of your strategy, including where you can transfer your points to once you’ve earned them.
For instance, if you're based in Atlanta and often fly Delta, it might be wise to select a credit card that is a transfer partner of Delta SkyMiles.
5. Pick a card with travel insurance
Many travel credit cards include varying degrees of free travel insurance as a perk. Commonly seen benefits include trip cancellation, trip interruption and rental car coverage. Although the amounts and coverage types differ from card to card, complimentary travel insurance can save you money and will give you greater protection while you're outside of the U.S.
Keep in mind that the free trip insurance provided by travel credit cards won't be as comprehensive as the coverage you’d find when buying a stand-alone policy.
The bottom line
If you’re a frequent international traveler, don’t pick a travel credit card the same way a domestic traveler would. Get one with international perks and no foreign transaction fees, and take into consideration both redemption options and transfer partners. You may also factor in nice-to-haves like travel insurance and low (or no) annual fees.
How to maximize your rewards
You want a travel credit card that prioritizes what’s important to you. Here are our picks for the best travel credit cards of 2021, including those best for:
Flexibility, point transfers and a large bonus: Chase Sapphire Preferred® Card
No annual fee: Bank of America® Travel Rewards credit card
Flat-rate travel rewards: Capital One Venture Rewards Credit Card
Bonus travel rewards and high-end perks: Chase Sapphire Reserve®
Luxury perks: The Platinum Card® from American Express
Business travelers: Ink Business Preferred® Credit Card