Are all credit cards the same? That is a question frequently asked by anyone who is new to the world of travel credit cards. The simple answer to that question is no, all credit cards are not the same. The difference between most credit cards is the interest rate charged and the rewards one gets from using the card. Let us take a few minutes to examine the difference between the two.
Ordinary Credit Cards vs Frequent Flyer Cards vs Travel Cards
Most credit cards allow you to accumulate points after you have made a specified number of qualifying purchases. Credit card points can then be used to get discounts at supermarkets, pharmacies, gas stations, and the list goes on. These miles can even be used to get discounts on travel related purchases like plane tickets. An ordinary credit card does not give preference to industry specific purchases, and airline tickets are not cheap. It may thus take you a very long time to accumulate enough points to make a significant contribution to your travel expenses.
If you travel a lot, it would be wise to sign up for frequent flyer programs. These are often called air miles credit cards. These cards allow you to accumulate travel related discounts that count towards your next trip. This is another excellent opportunity but these points also accumulate slowly. Savvy travellers know that it is easier to accumulate points on the ground than in the air. After all, how many of us actually make in flight purchases? Frequently flyer cards are only beneficial when used in conjunction with travel reward cards.
Travel credit cards, on the other hand, offer all the usual benefits of an ordinary credit card but also allows you to capitalize on benefits that are specific to those who travel frequently or intend to travel. Two of the main benefits of travel cards are that they provide discounts on travel expenses and charge lower rates when you travel abroad.
How You Can Benefit from a Travel Card
As discussed, travel cards accumulate points that can be used to get discounts on your plane tickets, in flight purchases, and baggage or other travel related charges. To make this possible, the issuing banks negotiate special arrangements with airlines, which ensures that you get these points a lot faster than you would if you were using an ordinary credit card. This may require that you shop at specific locations to qualify for these points. You may also be required to shop at specific times of the month to get extra points. Remember, the more points you have, the sooner you can plan that trip to Hawaii that you have been longing for since you were 12 years old!
The second, and most important benefit of a travel card becomes applicable when you leave the country. You can be hit with incredible credit card bills if you do not make your purchases with a travel card on your next trip. Why ruin the memory of a beautiful family vacation? You can realise significant travel savings with a travel card because these cards charge no or low fees when you make purchases abroad.
While the benefits are undeniable, a travel card is still a credit card and can leave you in debt if not used wisely. You must exercise extreme caution with how you use it. This may be hard to do when travelling and feeling free spirited. It would be wise to set a realistic budget after doing careful research on the location.
Be sure to check that the location you intend to visit is covered by the card you purchase. It would also be wise to make your purchases in the local currency of the country you’re visiting to benefit from more competitive exchange rates. Always ensure that the card you select is supported by MasterCard, Visa or American Express.
Forbes has listed the Chase Sapphire Preferred Card as one of the “overall best travel credit card 2018.”
Forbes has also listed Barclays Arrival Plus as the “best chip and pin travel rewards card.”
In conclusion, travel cards allow you to withdraw cash or make point of sale purchases without having to worry about additional charges. However, caution is needed in order to use these cards wisely.