A travel card is a type of credit card that is designed for travelers, especially those who travel frequently or internationally. A travel card can offer significant rewards and benefits for travelers, such as:
- No foreign transaction fee: A foreign transaction fee is a charge that some credit cards apply when you make a purchase in a foreign currency or with a foreign merchant. This fee can range from 1% to 3% of the transaction amount, and it can add up quickly if you travel frequently or spend a lot on foreign purchases. A travel card usually does not charge a foreign transaction fee, which can save you money and hassle
- Trip delay and trip cancellation insurance: Trip delay and trip cancellation insurance are benefits that can reimburse you for some or all of the expenses that you incur if your trip is delayed or canceled due to a covered reason, such as illness, injury, weather, or terrorism. These expenses can include airfare, hotel, meals, transportation, and more. A travel card usually offers trip delay and trip cancellation insurance, which can protect you from losing money and time
- Baggage delay or lost baggage insurance: Baggage delay or lost baggage insurance are benefits that can reimburse you for some or all of the expenses that you incur if your baggage is delayed or lost by the airline or the carrier. These expenses can include clothing, toiletries, medication, and more. A travel card usually offers baggage delay or lost baggage insurance, which can help you cope with the inconvenience and stress
- Auto rental collision damage waiver: Auto rental collision damage waiver is a benefit that can cover the cost of repairing or replacing a rental car that is damaged or stolen while you are using it. This benefit can save you from paying the deductible or the full amount that the rental company may charge you. A travel card usually offers auto rental collision damage waiver, which can give you peace of mind and confidence
- Airline lounge access: Airline lounge access is a benefit that can allow you to enter and use the facilities and services of an airline lounge at the airport. An airline lounge can offer you a comfortable and relaxing space to wait for your flight, and it can also provide you with amenities such as free Wi-Fi, snacks, drinks, entertainment, and more. A travel card usually offers airline lounge access, which can enhance your travel experience and satisfaction
- TSA PreCheck or Global Entry application fee credit: TSA PreCheck or Global Entry are programs that can expedite your security screening and customs clearance at the airport. These programs can save you time and hassle, and make your travel more convenient and enjoyable. However, these programs require an application fee, which can range from $85 to $100. A travel card usually offers a TSA PreCheck or Global Entry application fee credit, which can reimburse you for the fee and encourage you to apply for the programs
These are some of the benefits of using a travel card, but there may be other benefits as well, depending on the specific card that you choose. However, you should also be aware of the potential drawbacks and costs of using a travel card, such as:
- Annual fees: A travel card may charge an annual fee, which is a fixed amount that you have to pay every year to keep your card active. The annual fee can range from $0 to $550, depending on the card. You should compare the annual fee with the value of the rewards and benefits that you can get from the card, and see if it is worth it
- Interest rates: A travel card may also charge a high interest rate, which is the percentage of the balance that you have to pay as interest if you do not pay your bill in full every month. The interest rate can vary depending on the card, your credit score, and the market conditions, but it can be as high as 25% or more. You should avoid carrying a balance on your travel card, as it can quickly accumulate and cancel out the rewards and benefits that you earn
- Credit score: A travel card may also affect your credit score, which is a number that reflects your creditworthiness and financial behavior. Applying for a travel card can lower your credit score temporarily, as it can result in a hard inquiry on your credit report. Using a travel card can also lower your credit score if you use too much of your available credit, or if you miss or make late payments. You should use your travel card responsibly, and pay your bill on time and in full every month, to maintain or improve your credit score.
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