When it comes to credit cards and redeeming rewards, we often focus on travel for short vacations. But what if your travel plans involve living abroad for an extended period? In this article, we will break down how credit cards can be your best companion for international living and travel. We’ll cover essential factors to consider, share best practices, and provide recommendations for the best credit card for international travel.
Understanding the Challenges
Living abroad poses unique challenges when it comes to credit cards. Here are some key factors to keep in mind:
1. Foreign Transaction Fees
The last thing you want when living abroad is to be hit with foreign transaction fees every time you make a purchase. These fees can add up, with some cards charging up to 3% of the transaction amount.
2. Multipliers and Categories
Pay attention to the rewards categories of your credit card. Some cards offer excellent rewards for specific spending categories, like U.S. supermarkets, which might not be relevant when living overseas.
3. Points Currencies
Using multiple cards with different points and currencies can make it challenging to maximize your rewards. Look for cards with compatible points currencies to consolidate your rewards.
How Credit Cards Work Abroad
Before diving into recommendations, let’s briefly discuss how credit cards function abroad. Visa, Mastercard, Discover, and American Express all have an international presence, so your U.S.-issued cards will generally work worldwide. However, there are some differences to be aware of:
- Chip and Pin: In some countries, chip and pin technology is prevalent. You might need to hand your card to a cashier for transactions that require a PIN.
Best Credit Card Options for Living Abroad
1. Navy Federal Credit Union
- No foreign transaction fees on all cards.
- Wide range of cards, including cash back and travel options.
- Consider if you qualify or have ties to the military.
2. Chase Sapphire Preferred
- No foreign transaction fees.
- Offers a hotel credit to offset the annual fee.
- Allows you to book travel through the Chase portal for bonus points.
3. Bank of America Travel Rewards
- No annual fees and no foreign transaction fees.
- Earn miles for travel purchases made on the card.
- Consider joining the Preferred Rewards program for higher rewards.
4. Bank of America Premium Rewards
- No foreign transaction fees.
- Includes Global Entry credit and $100 travel credit.
- Offers strong rewards on travel and dining.
5. Citi Premier Card
- No foreign transaction fees.
- The diverse range of reward categories.
- Consider if you value Mastercard World Elite benefits.
6. Capital One SavorOne
- For cash-back enthusiasts.
- No annual fees and no foreign transaction fees.
- Offers high cash-back rates on groceries, dining, streaming, and entertainment.
Additional Considerations
- Explore airlines and travel partners outside the U.S. Some credit card programs may have partnerships with international airlines, expanding your travel options.
- Look for common transfer partners between credit card issuers to maximize the usability of your points and miles.
Your choice of the best credit card for international travel should align with your spending habits, travel plans, and personal preferences. Consider these recommendations as a starting point and adapt them to your unique situation.
Living abroad is an exciting adventure, and having the right credit card can make it even more rewarding. For instant approval of credit cards, you can check out our previous article.
Frequently Asked Questions (FAQs)
Why do I need a special credit card for international travel?
Specialized travel credit cards are designed to save you money while traveling abroad. They typically offer benefits like no foreign transaction fees, travel insurance, and rewards tailored to travelers.
What are foreign transaction fees, and why should I avoid them?
Foreign transaction fees are charges imposed by credit card companies when you make purchases in foreign currencies. Avoiding these fees can save you money, as they can add up quickly during international travel.
Can I use my regular U.S. credit card abroad?
Most U.S. credit cards can be used abroad, but you should check whether they have foreign transaction fees. Using a card without these fees is usually more cost-effective.
Should I get a travel rewards card or a cashback card for international living?
It depends on your spending habits and travel preferences. Travel rewards cards offer points or miles that can be redeemed for travel-related expenses, while cashback cards provide cash rewards. Consider which aligns better with your goals.
Are there credit cards that offer both travel rewards and no foreign transaction fees?
Yes, there are credit cards that combine travel rewards with no foreign transaction fees. Some of the recommended cards in this article offer both benefits.
What should I look for in a travel credit card for international living?
Look for cards with no foreign transaction fees, a wide range of rewards categories, and benefits like travel insurance, airport lounge access, and Global Entry or TSA PreCheck credits.
Can I use my U.S. credit card’s rewards program for international travel?
Yes, you can often use U.S.-based credit card rewards programs for international travel. Many programs have partnerships with international airlines and hotel chains.
Are there credit cards that work globally, even in countries with chip-and-pin technology?
Yes, most major credit card networks (Visa, Mastercard, etc.) support chip and pin technology. While your U.S. card may not have a chip and pin, it should still work in countries where this technology is common.
Should I consider getting a local credit card in the country where I’ll be living abroad?
It depends on your circumstances and the country you’re moving to. In some cases, obtaining a local credit card may be beneficial for specific local perks or discounts. Research local options if necessary.
Can I earn and redeem credit card rewards while living abroad?
Yes, you can earn and redeem credit card rewards while living abroad, as long as your card’s rewards program allows it. Be aware of any restrictions or limitations, such as currency conversion fees.