Should you take a credit card?
If you have read the article “Find a bank account that doesn’t charge abroad” you will now know the easiest way to access your money whilst travelling is by using a bank account that does not charge for foreign transactions. This opens up the question, should you also take a credit card travelling? Put simply yes you should, not to go spend all the money and get into debt, but as a backup strategy. If all goes wrong this little card will buy your ticket home.
To summarise these are the main reasons for taking a credit card
- Backup strategy in case you run out of money
- Some companies require that you pay with a credit card.
- Make use of points schemes?
What happens if you lose your bank card? Do you have a backup strategy to get your money? What happens if you spend all your money? You can use your credit card to get you back on track, to feed yourself and to ultimately get home.
Some companies require you to pay with a credit card, this might include car rental companies who need the security that you can pay extra if something goes wrong.
If done correctly you can make use of point’s schemes to get free travel. However at the time of writing I was unable to find a card that did not charge you exchange rate fees whilst still offering reward points so this was not an option. However whilst saving for your trip using these credit cards at home for your daily spending could get you free hotels and flights.
Choosing the right credit card.
The average credit card charges 3% on top of the current exchange rate and will charge heavily for withdrawing cash. So spending £100 will cost you £103 or more, not cool when you’re getting charged to use your own money. This pretty much ruled out all credit cards that offered rewards as they all charged for overseas spending. The choice between free overseas spending and reward points was an easy one, reward points mean nothing when you’re charged on each transaction.
Using a travel comparison website such as Moneysavingexpert.com will show you the best credit card deals available at the moment. I’m not going to list all the credit cards here as price comparison websites will always give you up to date information and should be the first place you check out.
My credit card of choice is Halifax Clarity as it has the following benefits.
- No cash withdrawal fee.
- No fee to use it anywhere worldwide
- No annual fee.
As you can see if I did need to use this credit card overseas it would not cost me to do so. However you are still charged 12.9% APR so you would need to pay the credit card off the same day that it was used, this can be done via online banking even if you lose your main bank card. As backup strategy this card has everything I’m looking for.