May 21, 2017
What to Look For in Credit Cards-The Basics

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So you’re interested in traveling? There are so many locations that work well on a budget, but if you’re really strapped for cash, you might want to invest in a travel credit card. Most people search tirelessly for cards with a low interest rate and no annual fee or a large sign up bonus. However, there are several other factors that you should take into consideration when looking for a travel credit card.

Low Interest Rate

Interest rates aren’t a cause for concern if you’re able to pay off your credit card in full each month. And if you’re pursuing the miles & points hobby you should definitely be paying off your balances in full each month. If you can’t pay off your balance every month, you should really pay close attention the the APR of your credit cards.

Annual Fees
Annual fees can initially be extremely frustrating but fortunately, some cards do waive the fee during the first year. First, check to see if the fee is waived. Then, make sure you look at the full benefits of the card before refusing to pay an annual fee. For example, the Chase Sapphire Reserve has a $450 annual fee, but it also has a $300 annual travel credit and it comes with free Priority Pass. Priority Pass gets you access to 1,000+ lounges around the world and retails for $399/year if you were to purchased it separately. The card also gets you an unlimited 3X Ultimate Rewards points per $1 spent on travel and dining.

Bottom line,the benefits of some credit cards can vastly outweigh the annual fee, while the benefits of other cards may not be enough to justify paying the fee. So make sure to do your due diligence.

Expiring Points
Many credit cards offer a great way to prevent your points from expiring. If you have a lot of airline miles but you no longer fly that airline, those points might expire after a certain period of inactivity. In most cases, having the airline credit card will prevent the points form expiring.

Foreign Transaction Fees
A majority of standard credit cards charge a fee for overseas transactions, most often at a rate of 3%. Any good travel credit card won’t charge you a foreign transaction fee. One example would be the Barclaycard Arrival Plus. I personally never use a credit card that charges a foreign transaction fee when I’m abroad. Make sure to check before signing up!

Bonuses for Signing Up

Be on the lookout for a sign-up bonus. Credit card’s typical offer huge point bonuses when you initially sign up and meet a certain spending threshold in a few month. For example, the Starwood Preferred Guest card was offering a limited-time bonus of 35,000 SPG points a few months ago. What can you do with those points? Tons of things. Here’s one example-you can use 40,000 SPG points to book a one-way Lufthansa First Class ticket between North American and Europe (that ticket typically retails for around $8,000)!

Meet the Minimum Spend

Cards that offer a large sign-up bonus will make you meet a minimum spend in just the first few months.  In order to meet the minimum spend, it’s helpful to put everything you are already buying on the card such as gas, groceries, cable, etc. Hit the spending minimum and be sure to pay off your card in full every month to avoid those interest charges!

Chip-and-PIN vs Chip-and-Signature

A majority of credit cards in the U.S. only support Chip-and-Signature while some areas outside the U.S. take only Chip-and-PIN. If you’re planning on traveling abroad, having a card that supports Chip-and-PIN can make your life easier.