Anyone who travels a lot knows the dilemma of foreign currencies and expensive withdrawal fees. Credit cards offer advantages that cannot be ignored. We’ll tell you which ones.
Whether it’s a summer vacation or a business trip abroad – credit cards are a popular payment method when traveling. In terms of security, the card offers more protection than cash. Paying is also made easier and there are often interesting additional services depending on the card model. We show you which advantages are exciting when on vacation and introduce some travel credit cards.
Travel insurance is often included with credit cards
Taking out appropriate insurance packages is particularly useful when traveling. Many credit cards already include the most important travel insurance policies – this saves time, effort and money. However, credit cards with travel benefits and included insurance are often premium models for which an annual or monthly fee is payable. Thanks to many additional services, these fees are usually quickly recouped if you use them cleverly.
The American Express Gold Card, for example, costs the user twelve euros a month. The provider is currently advertising a welcome bonus of 170 euros; other advantages when traveling include extensive insurance cover and the option to participate in the bonus program and make mobile payments anywhere in the world. But there are also a few disadvantages. The starting credit is only paid out if at least 4,500 euros have been spent with the card within six months. Amex also charges foreign currency fees and fees for withdrawals. Nevertheless, the additional services offer advantages when traveling. The insurance package includes:
- Travel cancellation insurance
- Travel comfort insurance
- Europe-wide motor vehicle protection letter
- Transport accident insurance
- International travel health insurance
Collect miles with your credit card and secure benefits
Some credit card providers also allow you to collect miles. These can then be used for upgrades or even cheaper flights when booking flights. In this case, the providers cooperate with certain airline partners so that the points collected can be transferred to the corresponding frequent flyer program.
The American Express Platinum credit card is one of the most powerful cards with the option to collect points and convert them into miles. It currently even has the highest welcome bonus to date: new customers receive 65,000 Membership Rewards points if they spend 10,000 euros on the card in the first six months after receiving it. Depending on the frequent flyer program, 65,000 points correspond to around 52,000 miles – that’s quite a lot to do. The Amex Platinum Card costs a whopping 720 euros a year, but it also includes a wide range of services:
- 65,000 Membership Rewards points as a welcome bonus – for new customers, the promotion is valid until July 15, 2024 (minimum turnover of 10,000 euros in the first six months)
- Two Priority Passesfor free lounge access at airports worldwide
- Credit with a nominal value of 760 euros per yearthis includes a travel credit of 200 euros, a Sixt Ride credit of 200 euros, a shopping credit of 90 euros, an entertainment credit of 120 euros and a restaurant credit of 150 euros
- Collect points with the Membership Rewards program: one point per euro of card turnover
- Comprehensive insurance package for travel and rental cars
Free payments and cash withdrawals abroad with credit card
When using many credit cards outside the EU, foreign currency fees are charged. This means that a certain percentage of fees is due each time you pay or withdraw money, which can be up to four percent. Annoying for customers: American Express credit cards charge foreign currency and withdrawal fees despite high annual fees. Thanks to the many additional services, these premium cards can still be worthwhile when traveling. If you can do without the benefits and would rather withdraw cash for free or pay abroad without fees, you should get a corresponding credit card.
The Barclays Platinum Double, for example, has no foreign currency fees or costs for withdrawing money – not even outside the EU. The combination of Visa and Mastercard ensures worldwide acceptance. A travel insurance package is also included. The cost of this premium version is 99 euros per year, but other additional services are not included.
Debit instead of credit card
For those who tend to use up the credit card limit and drive up the amount on the credit card, debit cards may be the better choice. With credit cards, banks usually take payment in advance, and the total amount spent is then deducted from the linked account every month. This is sometimes at the expense of clarity. With debit cards, the process is simpler, because the amounts spent are deducted directly from the linked account – this way you don’t accidentally go into the red.
DKB, for example, offers a debit card that is particularly cheap because there is no annual fee. Another advantage when traveling: There are no foreign currency or withdrawal fees. But be careful: debit cards generally do not allow you to make deposits when booking a rental car.
Credit cards are useful companions on vacation
Credit cards offer a number of advantages when traveling, especially outside the EU. Premium cards often come with insurance packages and, depending on the provider and model, have other additional services to make traveling easier. If you travel often and want to benefit from numerous advantages, it is best to choose a card with a wide range of services. These are often quite expensive – but if you really use the services, the fees will quickly be recouped. If you only value a few basics and, above all, want to withdraw money for free and avoid foreign currency fees, you can also choose a credit card with a low annual fee.
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Source: Stern
