Is a credit card or debit card better for international travel?
In most cases, a credit card is better than a debit card for international travel — assuming that your credit card doesn’t charge international fees, that is.
Credit cards come with fraud protection, which means you’re not liable if your account numbers are stolen or used without authorization when you’re abroad. Plus, everything you spend on the trip will earn rewards.
How to choose the best credit card for international travel
The best credit card for overseas travel is a personal decision; it depends on your travel habits, preferences and financial situation. For every card you evaluate, consider the following factors.
International acceptance
In general, Visa cards and Mastercard have the widest acceptance rates across the world — you shouldn’t have any trouble using them in most international locations. Discover cards and American Express cards are not as widely accepted.
Foreign transaction fee
Foreign transaction fees are one of the biggest considerations when choosing the best credit card for foreign travel. A card that doesn’t charge you to make purchases overseas can save you a great deal of money.
Annual fee
The majority of travel credit cards come with an annual fee. If you’re a regular traveler, the perks that come with that fee usually make it easy to recoup the cost. If you go overseas occasionally, consider a card with a $0 annual fee — that way, you can still earn rewards, but you won’t lose money on unused benefits.
Welcome bonus
A great welcome bonus can add significant value to a credit card, for example, the Capital One Venture X Rewards card, which comes with a bonus of 75,000 miles. If you use those miles in the Capital One portal, it equals about $750 — nearly double the annual fee.
Rewards
The rewards program is a key element of a travel credit card; earn enough points or miles, and you can get flights and hotel rooms for free.
To maximize earnings, make sure to choose a rewards credit card with bonus categories that match your spending habits. If you’re overseas regularly, for example, you might look for a credit card that has high multiples for flights and hotels.
Consider the redemption value too. Many cards transfer points or miles at a 1:1 ratio but offer a higher ratio for travel booked in the bank’s portal.
Travel benefits
The benefits are half the fun of a travel credit card. Look for cards with perks such as:
- Free airport lounge access
- Credits toward NEXUS, TSA PreCheck or Global Entry
- Travel credits
- Credits for hotels or rideshares
- Premium status with rental car companies
Travel protections
Most credit cards for international travel include some type of insurance, including:
- Baggage insurance
- Rental car insurance
- Trip delay insurance
Should I have more than one card for international travel?
Every travel credit card is different, which means that you probably won’t get everything you need in a single card. One might have a better rewards earning rate, while another offers better lounge access or travel credits.
If you travel internationally regularly, you can maximize the benefits by getting more than one credit card. Watch the annual fees, and run calculations to ensure that the perks outweigh the costs.
Tips for using a credit card when traveling internationally
Once you choose a credit card for international travel, use these tips to stay safe and save money.
Notify your card issuer that you’re traveling
Before you travel, call the bank to let it know you’re going overseas; you can also create a travel notification in your online card-management portal. This step reduces the risk that the issuer will freeze your card when you try to use it overseas.
Pay in the local currency
Any time you’re presented with the option to pay with or without a currency conversion, always opt for the latter. By paying in the local currency, your bank will handle the conversion to U.S. dollars — usually at a lower rate.
Use manned payment stations
In some parts of the world, unmanned checkouts won’t accept your card if it doesn’t use a chip-and-pin system. However, as contactless payments become more popular across the globe, you can avoid this issue by tapping your digital wallet.
Don’t use an ATM
Unless it’s an emergency, you should never use your credit card to take out cash. Cash advances often come with fees and a higher annual percentage rate (APR). If you need cash, it’s better to use a debit card without foreign transaction fees.
Know what benefits come with your card
Many cards come with benefits, including travel insurance and coverage for lost luggage. Understanding these perks can help you avoid buying things you’re already getting for free.
Alternatives to credit cards for overseas travel
A credit card isn’t the only way to pay for purchases when you’re traveling overseas. You might also consider these alternatives.
Debit cards
Debit cards are always an option when you’re traveling. Be prepared for discrepancies in PIN formats; some countries use six or eight digits, which can cause a problem if your card has a four-digit PIN. Debit cards can also be vulnerable to fraud, especially if you’re using ATMs regularly. Protect yourself by setting up automated purchase notifications and minimizing your account balance.
Prepaid cards
Many prepaid Visas and Mastercards can be used internationally. Read the terms and conditions carefully; some cards charge fees for international transactions.
Cash
Cash is still a valid form of payment. Smaller stores, especially those in developing countries, might refuse to accept anything else. For safety, avoid carrying large amounts of cash and pay attention to ATM fees.
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For rates and fees of the American Express® Gold Card, please visit this page.
For rates and fees of The Platinum Card® from American Express, please visit this page.