What's The Best Credit Card For Travelers? These Card Companies Will Find Your Luggage, Replace Your Passport, And Bail You Out Of Jail
When you're traveling, your credit cards can do more than just help you afford souvenirs that aren't exactly within your "budget" — the very best credit cards for travelers have policies and programs that can help you replace lost luggage, get an emergency cash advance, or even assist you if you find yourself in (gulp) legal trouble while abroad. But even if you manage to avoid catastrophe on your next outing to Paris or Palm Springs, a travel-oriented credit card can still help your vacation go smoothly. Many credit card companies offer assistance for smaller travel problems, too, and can even help you stay on budget by helping you avoid international financial fees.
So even if you typically use a debit card in the U.S. to help you budget your spending, you might want to consider using a credit card abroad. Credit cards are easier to replace while traveling than debit cards, and, should they get lost or stolen, it's easier and quicker to get fraudulent credit card charges canceled than it is to get a refund for cash stolen off your debit card. Plus, almost none of the plethora of travel help options available to credit card members apply to those with debit cards at the same institution.
Credit cards are no joke, of course, and you should thoroughly think through your financial situation before applying for one. But if you're ready to get an additional card, and are planning on doing some serious traveling in the future, why not pick up a card that has your back? We checked out how credit cards performed in six key areas of domestic and international travel, and picked out the shining stars in each category below.
1. International EMV Chips
In most countries outside the United States, credit card companies have switched up their technology, chucking out the magnetic stripe that most of us are familiar with in favor of a microchip embedded into the card. Microchipped cards are actually much more secure than traditional credit cards — when a traditional credit card is swiped, your actual credit card information is transmitted to your credit card company, making it vulnerable to hackers along the way (this loophole in magnetic strip technology is thought to have played a role in 2013's massive Target customer credit card information hack). When a microchipped card is swiped, however, it transmits your transaction details via a unique encrypted code, which is far harder for hackers to make sense of. This is why most U.S. credit cards will be adding microchips to their cards in 2015.
But if you're planning to travel abroad in the near future, it may be too soon to get a microchipped card from your usual credit card company. Luckily, there are a few U.S. financial institutions that offer them already — right now, you can score a microchipped card from Bank of America, or use the Andrews Federal Credit Union Visa Platinum Rewards microchipped card. But even if you do get one of these microchipped cards before going abroad, know that you might still not be able to use it all automated kiosks abroad. Due to some differences in how American credit card companies operate, you may have to make your purchases from a cashier, who will get your signature on a receipt.
And if you get do caught abroad without any microchipped cards at all, don't freak out — if you're making major purchases from big businesses in large cities (like train tickets, lodging, and food from major supermarkets), a cashier can typically ring up your magnetic strip card manually. And you can still use your magnetic strip debit card to take cash out of ATMs in other countries — there may just be a transaction fee.
2. No International Transaction Fees
Almost all cards will charge you a three percent fee on international credit card transactions — so that's three percent of the total cost of whatever you charged, whether it's a poster of the Parthenon or a hotel room in Berlin. But a few cards don't charge extra fees for purchases made abroad. All of Capital One's cards waive all international transaction fees, as do HSBC's Discover cards. So does the Discover it Miles, the Citi Prestige, and the Barclaycard Ring Mastercard.
What's notable about Capital One and HSBC's cards, however, is that folks with every level of credit can get a card with no foreign transaction fees — at many other banks, only people with good credit who have higher-limit cards can qualify to skip the transaction fees. So if you're looking for a card to take with you on an international trip right after you graduate, or while you're still building your credit, Capital One and HSBC Discover might be worth checking out.
3. Lost/Emergency Card Replacement
Losing a credit card while you're on a trip is every traveler's worst nightmare. But the good news is that all credit card companies will replace your card if you lose it while on vacation, and most of them will replace it for free, so you'll never be totally screwed. If you lose your card, call the customer service number for your credit card company or search your card's website for "stolen card" as soon as you can, and follow the instructions there. They can freeze the card, send a new one, and discuss what financial help you might need while waiting for your card to arrive.
The bad news is that it will likely take a few days to replace your card — often five to seven days, in fact. While you're waiting, you have a few options: you can use a different card if you have one; you can get a rush replacement card; or you can get an emergency cash advance from your card company.
American Express and HSBC Premier offer free rush replacement cards, typically delivered within one to three days, in all circumstances (just make sure to specifically request that the card be overnighted). American Express also allows you to pick up a replacement card at the nearest American Express office, and offers this service for folks who hold any American Express card — while HSBC Premier is only available to customers in higher financial brackets.
Other companies usually charge a small fee for emergency card replacements — generally between $8 and $30.
And if your card does get lost while you're traveling, make sure to cancel it through the issuing credit card company (Visa, Discover, etc), rather than the bank that you joined through. Credit card companies deal with international card loss thousands of times a day, and have systems in place to quickly freeze and unfreeze your funds. But banks work with different systems, and reporting a stolen card through them can potentially leave your account frozen for weeks.
4. Emergency Cash Advance
If you do get stranded when your only card gets lost or stolen, don't lose hope. Many credit card companies will provide travelers who have lost their card with an emergency cash advance — an instant loan of enough money to keep you floating until a replacement arrives, usually wired through a service like Western Union or MoneyGram. American Express will give you instant access to emergency cash equal to your credit limit, which you should be able to withdraw at any wire service. Other companies will have a customer service representative work with you to determine how much money you need, and how long it will take to get there.
And remember, this money is a loan — it will be added to your card debt, and you'll have to pay it back with all applicable interest.
5. Lost Luggage
On domestic flights, lost luggage is technically your airline company's problem — they're legally liable for up to $3,400 if they lose your bags. But while that's great to know in the long-term, it doesn't do much if you're stuck across the country with only the clothes on your back and the gum wrappers in your backpack.
Chase and Visa each offer cards that automatically cover some of the cost of lost luggage; American Express offers luggage insurance that can be purchased by card holders for an additional fee. Some prepaid debit cards aimed at travelers, like the Visa TravelMoney, offer luggage insurance as part of their package, as well.
But remember, it's not enough to simply have the card on you when you lose your luggage — you typically have to have paid for the trip with your card in order for the luggage insurance to kick in.
6. Travel Assistance
Few of us understand the degree of help that credit card "travel assistance" programs offer —they can do everything from refer you to local doctors and dentists, to help you track down bags that you've left in a taxi cab, to put you in touch with English-speaking attorneys and the U.S. consulate if you run into legal problems abroad. Some travel assistance hotlines even have experts who can advise you on what to do if you suddenly find yourself in the middle of an unstable political situation abroad. Their travel assistance experts have access to databases of local businesses, important information about local financial institutions, and other stuff you won't be able to find just by Googling.
Typically, travel assistance services kick in when you've traveled 100 miles from your home and on a trip that you've at least partially paid for with your card. So travel assistance can't help if you lost your purse on a commuter train — but they can help with mishaps that occur on a long weekend away or a multi-month, international backpacking expedition.
American Express's reputation as a "traveler's credit card" mostly stems from their famously comprehensive travel assistance services — the American Express Global Assist program offers 24-hour hotline assistance to card members, and can help with everything from misplaced passports or helping you get a message to your family at home if you've run out of money for phone calls or internet access, to helping you secure a bail bond or get an emergency medical airlift.
But all of the four major credit card companies offer some travel assistance — just make sure to check out exactly what services they offer, and copy their hotline number some place secure, before you go off to find yourself in Europe. You know, just in case you also end up finding yourself in need of a root canal in Europe.