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Summer is fast approaching, which means it’s the perfect time to take a vacation. A travel credit card is a great way to pay for the associated expenses. You can take advantage of perks like travel insurance, free checked bags on flights, and even airport lounge access.
All of these come with certain travel cards, but here are three other important features you’ll likely find on a wider range of cards: Look out for these features when choosing a travel rewards card.
1. Bonus rate on travel expenses
Some flat-rate travel credit cards will give you points at the same rate on all spending, regardless of what you buy. But in most cases, the best travel rewards cards offer bonus rates on the types of spending you’re likely to make while traveling. This includes:
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Airline Tickets
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Hotel Accommodation
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Car rental
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Other transport options
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dining
If you want to simplify your spending, there are cards that can make your entire holiday easy from start to finish. I traveled around the north of England earlier this year using one of my favourite travel cards from The Ascent. I booked my tickets before I left, arranged for a few nights in hotels along the way, and took the card with me to pay for bus and tram tickets, meals at great restaurants, and museum entrance fees.
2. No Foreign Transaction Fees
If you’re planning on traveling internationally, the following features could help you save around 3% on every transaction: Credit cards that charge foreign transaction fees often slap an additional 3% fee on amounts paid in currencies other than the U.S. dollar.
3% may not seem like much, but it adds up. If you spend $2,500 on a trip, that’s an extra $75. You’ll probably want to spend that $75 on a nice meal or something cool from the museum gift shop (is that just me?).
3. High credit limits
Remember when I consolidated all my travel expenses onto one travel credit card? I was able to do that because that card had a high credit limit. In fact, that card is now my highest limit card. I recommend being careful with your credit limits (both overall and on individual cards) because overusing your limit can damage your credit score.
Your credit utilization ratio is an important part of your credit score, making up 30% of your FICO® Score. It’s best to keep your credit utilization ratio below 30%. So if your card has a $10,000 limit, you should keep your card balance below $3,000.
You have no control over your card limits. As you become a more established credit card user and your income increases, your limits will increase. In the meantime, check out our list of the highest credit cards, which includes some great cards for travel.
Another reason to aim for a higher credit limit is so you have more wiggle room when you travel. You probably don’t want to take a wallet full of credit cards with you on vacation; I definitely don’t. When I went on a trip to the UK a few months ago, I took a card with a higher limit, and another travel card with a lower limit as a backup (that I ended up not using). It was comforting to know I had plenty of credit to use when I needed it.
Credit cards with travel rewards can help make your next vacation cheaper and easier, so keep an eye out for these features to help you choose a good one.
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