You bought the plane tickets, booked the hotel and rented the car. But have you packed the right credit card? by Michelle Higgins
As credit card companies vie for a favored position in customers’ wallets, they’re pitching new travel enticements, from waiving foreign transaction fees that can add up to 3 percent to your purchases abroad to picking up fees for checked baggage. Earlier this month, for example, American Express did away with the 2.7 percent foreign transaction fees on international purchases for Platinum Card holders, and added two new travel benefits — Priority Pass Select airport lounge access in more than 300 cities worldwide and free membership to Global Entry, which offers expedited security clearance for pre-approved travelers entering the United States.
British Airways and Chase brought back a promotion they had used two years ago — an impressive sign-on bonus of 100,000 miles (equivalent to two round-trip coach tickets from North America to London) to those who sign up for the British Airways Visa Signature Card, which has a $95 annual fee, by May 6 and spend $2,500 within the first three months. And Citigroup dropped foreign transaction fees on two of its new ThankYou Rewards cards that were introduced at the start of the year and allow users to redeem points for flights, hotels, cars, travel packages and activities.
But travelers should pay close attention to the fine print when comparing card offers to be sure the benefits outweigh the costs. For example, the American Express Platinum card comes with a hefty $450 annual fee. The range of perks that go along with it include $200 a year for airline fees like checked bags or in-flight meals, access to Priority Pass Select airport lounges (normally $249 for 10 visits), and zero foreign transaction fees. If you’re a road warrior who spends more time in airports and on planes than in your own home, it may be worth it. But it’s probably not the best card for the occasional flier. “If you’re getting it just for the currency conversion waiver, you will probably give them more than that back when you pay the annual fee,” said Greg McBride, senior financial analyst at Bankrate.com, a financial research site.
To make the annual fees worthwhile, “look for a card with additional travel insurance like luggage replacement, emergency funds (in case the card is lost or stolen), car rental insurance and trip cancellation insurance,” said Carmen Wong Ulrich, author of “The Real Cost of Living,” who speaks from experience. After dinging a rental car while driving along St. John’s rough and hilly roads, “all we had to do was spend 10 minutes on the phone with AmEx, fill out a little paperwork and we never saw a bill for repairs,” she said. “Well worth the $125 annual fee” for the Gold card.
Also consider what kinds of perks are most valuable to you, and how much you need to spend to make rewards programs pay off. “The most important part of choosing the best credit card is finding one that best suits your personal needs and lifestyle,” said Amber Stubbs, managing editor at CardRatings.com, noting that she likes Capital One’s Venture Rewards card, which was introduced last year and lets users earn and redeem miles for any travel purchase regardless of the airline, hotel or cruise company. “However, for someone that frequents a particular airline,” she added, “it’s not a bad idea to get a card specific to that airline.”
To help you decide what to put in your wallet, here’s a list of some of the best cards for travelers, none of which are linked to a specific airline.
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