Compare Travel Credit Cards

What is a travel credit card?

Travel credit cards are designed for overseas travel, packed with a number of features and perks to help you save money when spending in foreign countries. These can range from fee-free currency conversions, complimentary travel insurance, frequent flyer points, status credits and lounge access just to name a few.

Everyday credit card vs travel credit card

While most everyday credit cards can be used overseas, both products are structured differently which is why you may consider opting for a travel credit card if you are jetting off to a foreign country. Aside from offering different features, fees are the most significant factor when comparing the two. To benefit your finances most, it’s important to check the fees that apply when using your everyday credit card overseas. These can include currency conversion fees, cash advance fees and overseas ATM fees.

Some travel credit cards will have no currency conversion, cash advance or overseas ATM fees, however this may be at the expense of a higher interest rate on purchases.

If you decide to use your everyday credit card overseas, consider informing your credit card provider. If you don’t, your provider may think your overseas transactions are suspicious and place a temporary lock on your card - which is the last thing you want when on a holiday overseas!

Why use a travel credit card?

Travel credit cards offer convenient access to a line of credit no matter where you are in the world. They can be easily used to purchase goods or experiences without the immediate worry of having to pay the costs upfront. Using a travel credit card also means you don’t have to carry around a stack of cash, which can pose security risks depending on the country or region of the world you are travelling too.

On top of their convenience, travel credit cards also offer:

• Worldwide acceptance.

• Rewards programs.

• Special features and perks.

Worldwide acceptance

Since the majority of credit cards are issued by Visa and Mastercard, you’ll have little trouble finding places that will accept your card – there are millions of them all over the globe. Cards issued by American Express and Diners Club might be less accepted due to the higher fees they attract, but there’s still no shortage of places where you can use these cards.

Rewards programs

If you have a frequent flyer or rewards card, you may still be able to earn points for overseas spending, with some cards actually offering bonus points for non-Australian dollar spend. Also, if you’ve already built up enough points, you could use them to pay for business class flights.

Special perks

Depending on the card you’ve got, it might have some nifty features that can make your trip much easier and even a little classier, like access to airport lounges, complimentary travel insurance, concierge services, fraud protection and more.

Travel credit card pros and cons

Pros

• Widely accepted: Globally, most credit cards are issued by Visa, Mastercard or American Express. This means that you can use your travel credit card wherever that payment network is accepted overseas.

• Benefits: Depending on the structure of your credit card, you may be eligible to receive extra perks such as travel insurance, airport lounge access, reward points and frequent flyer points.

• Ability to budget: With access to a line of credit, you may be able to travel with a more flexible budget and cover any unexpected expenses that crop up.

• Low international fees: As opposed to using your normal credit card, international fees tend to be significantly lower on a travel credit card. This means lower charges for making an international transaction and widespread acceptance at overseas ATMs.

Cons

• Fees: You may be charged fees including annual fees, currency conversion fees, overseas ATM fees and cash advance fees.

• High interest: Credit cards tailored for travel will generally attract high interest rates on purchases to go along with their benefits.

• Exchange rates: With a travel credit card, you could be at the mercy of constantly changing exchange rates depending on the card’s structure.

• Temptation to overspend: you have access to a line of credit, so there is a potential temptation to overspend, compared to using a travel debit card or travel money card, for example.

Comparing travel credit cards

While you’ll find some attractive travel credit card options in our comparison table above, when comparing these cards it is important to identify specific factors that best suit your travel needs and financial position.

Fees

Be sure to consider annual fees, currency conversion fees, overseas ATM fees and cash advance fees, as well as any fee waivers that may apply for use of the travel credit card. What may seem like an enticing deal at the start, may have the potential to bite you later on down the track with a number of hidden fees.

Rewards

If you are choosing a rewards or frequent flyer credit card, check the rate at which points accumulate and what you can redeem your points for. In most cases, points can be redeemed for flights, accomodation, upgrades and status credits.

Premium features

When comparing travel credit card options, keep on the lookout for additional perks such as complimentary travel insurance, cover for specific instances such as COVID-19 or loss of baggage and airport lounge access.

Ease of use

Another factor to consider is the ease of use for your travel credit card and associated account. This can range from a number of factors including merchant acceptability, international ATM access and security.

Savings.com.au’s two cents

Travel credit cards are a popular option for those looking to jet off overseas with the potential to take advantage of some beneficial rewards. After all who doesn’t love a freebie?

Before you do look to take advantage of rewards such as complimentary lounge access or the ability to accumulate points for free flights down the track, ensure you consider factors such as annual fees and interest rates as travel credit cards are renowned for both expenses. Some credit cards may come with more bells and whistles than you can count, therefore it’s important to determine the features of the credit card that will benefit your travels most prior to signing on the dotted line.

It’s also important to not spend beyond your means despite the temptation. Set yourself a budget and a regular repayment goal to avoid paying significant interest expenses on the accumulated credit balance.