A credit card can be such a great help when travelling as well as offering you convenience. You will not only avoid carrying cash that can easily be stolen but will also enjoy some consumer protection and travel insurance benefits. You are also likely to earn reward points and miles for spending, allowing you to save on hotels and flights.
However, credit cards can plunge you into financial problems due to some mistakes you may make, especially when travelling. For example, some cards may attract huge foreign transaction fees. Here are some mistakes you should avoid:
1. Letting your points or miles expire
Can you imagine losing your miles or points because you are not aware of the rules of the reward expiration? You must know the rules for reward expiration well. Sometimes, you could extend the life of your rewards by redeeming or making a purchase to earn just one point. To avoid such loses, set calendar reminders so that you do not lose your hard-earned and precious rewards.
2. Choosing cards that do not partner with your favorite service providers
While there are cards that partner with certain brands, some do not, and you have to ensure that the card you choose partners with your favorite brands. You also need to be aware of where the card gets you the best value for flights as well as hotels. Getting to know the redemption rules and limits is critical, too. If you choose cards that are co-branded to particular airlines, ensure that the airline does not have limited routes where you want to go or else the points will not be of much use to you.
3. Carrying balances on credit cards
You are happy earning rewards on your credit card, right? Well, what you may not know or overlook is that as you earn 1 to 3% rewards for each dollar you spend and the average card interest for balances is at least 17%, so the card issuers always win. The basic rule is to avoid paying interest on your purchases with credit cards when travelling by ensuring that you pay your balances before they attract interest.
Besides the interest, not paying your balances on time or defaulting can harm your credit score and ruin your chances of getting credit in the future. If you are already grappling with poor scores, do not worry anymore. Instead, engage experts in credit repair, and you can get more information on how this works by check that site of one of the best in that field for boosting credit ratings.
4. Using a travel card that charges foreign transaction fees
One of the biggest miseries of international travelers is the foreign transaction fee. Some of the cards that charge these fees end up charging consumers 1 to 3% on expenses incurred outside of the defined jurisdiction, say the US. They also charge for purchases made from websites outside of the defined area. You should choose good cards that do not attract foreign transaction fees.
5. You lose value on reward redemption
Although some cards allow for 1:1 transfer to airline or hotel loyalty programs, in some instances, you may end up transferring your rewards for a lesser value. So, what do you do to avoid getting a raw deal on the value of your reward exchange? You should read the fine print. You must be aware of how many points you are getting upfront for your rewards. You should also check for any hidden fees. It is not advisable to redeem your points for cash because the travel you could get instead is far more valuable.
The Bottom Line
Travelling with credit cards can be convenient and of great value, but only if you know how to optimize them. Besides the above mistakes, you must ensure that you give yourself enough time when you get cards with sign-on bonus or you spend a sufficient amount to earn the points. If you avoid these mistakes, your credit card will give you maximum benefits as you travel.