Flights booked? Check. Hotel sorted? Check. Finances covered? Hmmm…
For many people, contemplating how they will pay for goods and services while abroad is not a priority. However, doing so can save them significant sums of money, with a travel credit card being one way of avoiding fees that are levied on foreign transactions by a number of credit card providers.
As such, a travel credit card could be of interest for international trips. But, do they offer appeal for use while in the UK? Or, should they be viewed as a second credit card to solely be used for trips abroad?
How to avoid fees
A large number of credit cards charge foreign transaction fees when used outside the UK. This usually takes the form of a non-sterling transaction fee, which is often around 3%. This means that all spending on the card in currencies other than sterling is subject to a charge which can quickly add up over time.
As a result, obtaining a travel credit card could be a worthwhile idea for many consumers. There are no foreign transaction fees charged, which means that using it outside of the UK does not incur any additional charges versus using it in the UK.
Many travel cards also come without an annual fee. This means that there is no cost to a consumer in having a travel card that is only used a small number of times per year. As such, even if an individual is content with their main credit card, a travel credit card could prove to be a worthwhile second card for use when they are outside of the UK.
Having a second card
Of course, a travel credit card works just the same as any other credit card when in the UK. Therefore, consumers may wonder if they could replace their main credit card with a travel credit card.
While this may provide greater simplicity in terms of having one credit card balance to pay off each month, it could mean that consumers miss out on attractive offers from other types of credit cards. For example, cashback cards and other rewards cards can help to maximise the benefits of spending. A travel card may not be able to compete in this regard.
Similarly, travel cards often do not have balance transfer offers. Therefore, they may be unable to cut an individual’s interest payments, which could mean that a balance transfer card is a better idea for use as a primary credit card.
Furthermore, it may be possible to obtain a lower APR on non-travel credit cards. This could be relevant for consumers who are unable to pay their balance off in full each month.
Verdict
Travel credit cards seem to be highly appealing. They are a logical move for many consumers who wish to reduce the fees they pay when travelling abroad. Since a travel credit card often has no annual fee, it makes sense to utilise it as a second card. This allows an individual to maximise their benefits through rewards or cashback cards, or alternatively to reduce the amount of interest they pay through obtaining a balance transfer card.
As ever, it makes sense to have some cash on hand while abroad, as well as choosing to pay in local currency when using a travel credit card internationally (since this generally equates to a more favourable currency conversion rate).
Overall, the addition of a travel credit card could save consumers money – even if they travel abroad relatively infrequently.
