Top Rewards Cards & Debit Cards for Travel

Rewards cards and debit cards for travel offer huge incentives when used correctly. If you pay the balance off each month, rewards points and sign-up bonuses are essentially free money for travel. Although debit cards generally do not offer rewards these days, cash is still king in some parts of the world and having access to your money without paying ATM fees is also a consideration that should be made prior to a trip out of the country.

By the time I left, I had accrued about $2,000 in travel points from some of the rewards cards below. That will cover a large portion of my airfare for the first year. I also travel with at least one of the debit cards for travel below that includes free access to every ATM in the world. A backup card may prove useful as well in case your debit card gets lost or stolen like mine did in between street food meals in Vietnam. This will likely save me $10 to $25 per week. Over the course of a year, that is a significant amount of savings.

Using Credit & Debit Cards for Travel Internationally

Transaction Fees

When traveling abroad, many credit and debit cards charge international transaction fees. They can be a set dollar amount, a 1-3% fee based on the transaction, or both. These really add up over time. Free transaction fees should always be a requirement for any card you are planning on using abroad.

Smart Chip Technology

This feature offers a greater level of security.  Though many US cards have been lacking in this area until recently, it has started to catch on. As this is a requirement from some vendors abroad, any card with this feature will allow for greater usage and more opportunities to earn points while traveling. This should also be a requirement for any card you plan on taking with you.

Rewards Credit Cards

During the time I spent researching methods for Finding Cheap Airfare, my initial goal was to locate airfare from Phoenix to Edinburgh, London or Portugal for under $500. When I found prices close to that range, my new goal became finding the best rewards card to cover the entire cost of that airfare. My plan was such a success I signed up for a few more cards with gaps of a few months in between each one. This allowed me to bank even more points and did not noticeably impact my credit. In fact, greater overall access to credit and continued payment of my balance in full actually increased my credit score.

Sign-Up Bonus

There are a variety of dollar amounts and points that are given out to promote rewards cards. Some of the best options are in the $400-$500 range and most require a spending a certain amount within 90 days of opening the account. A common range for a good card is around $3,000. For people who spend around $1,000 a month or more on credit cards already, this is a no-brainer. For people who typically do not spend that much, opening a card before making a large upcoming purchase or during a time of year like the holidays when spending may be higher than usual may be a good option.

The way rewards can be redeemed varies by card. Some allow statement credits for qualifying travel expenses such as airfare, hotel stays or train tickets. For others, rewards points are used through the credit cards rewards booking site. If rewards are specific to an airline or hotel, the option to use points is typically offered through the website or just before the final purchase is made.

Rewards Points

This is the percentage rate at which points are accrued for ongoing purchases. Some cards offer flat rates at a percentage of around 1-2% for all purchases. Others offer categories such as restaurants, hotel stays and airfare with associated percentages of points. If this is a card you are planning to hold on to for a while, go after the card with the highest percentage and broadest number of qualifying categories.

Annual Fee

Most rewards cards have an annual fee. Fortunately, many waive the cost for the first year. Fees tend to range from $89-$125 per year. Depending on total overall usage annually, many rewards cards more than pay for themselves.

If paying an annual fee is something you would like to avoid, consider using your miles and then giving the company a call before you incur your first annual fee. They may be willing to negotiate with you by decreasing the amount or throwing in additional perks or rewards.

What’s in My Wallet?

For the amount of money I spend monthly, these were my first two choices. They each require $3000 in spending in the first 90 days. They have no international transaction fees, Smart Chip and a number of other benefits. I read many arguments about why each was better than the other. After I thought about it, I just went ahead and signed up for both.

Barclay Arrival Rewards Plus World Elite MasterCard: This proved to be one of my favorite rewards cards.

Sign-Up Bonus: $400 in rewards points after meeting the $3,000 requirement. Redeemed as a statement credit for any airline, hotel or train purchases. 10% of all points are gifted back  for travel. This equates to a $440 bonus.

Rewards Points: 2% on all purchases. When combined with the $440 sign-up bonus, this totals $500 in travel rewards.

Annual Fee: $89, waived for the first year.

Chase Sapphire Preferred: After Barclay, this was my second card.

Sign-Up Bonus: $500 in Case Ultimate Rewards for use on their site, after meeting the $3,000 requirement.

Rewards Points: 2% on all restaurants, hotels, airfare and trains. 1% on all other purchases.

Annual Fee: $95, waived for the first year.

Additional Rewards Cards

I enjoy the versatility of the two cards above and how the points can be redeemed for a variety of travel expenses. If you have an airline or hotel preference though, here are a few more. All of these have SmartChip technology but other features and rewards amounts differ by card:

• American Airlines AAdvantage Mastercard: 50,000 AAdvantage bonus miles after spending $3,000 in the first 90 days, first checked bag free, group one boarding, $95 annual fee waived first year and more. (No free international transaction fees listed.)
• British Airways Visa Signature: 50,000 bonus Avios after spending $2,000 in the first 90 days, Travel Together companion pass good for two years when spending $30,000 in a year, no transaction fees, $95 annual fee waived first year and more.
• Citi Hilton HHonors Reserve: 40,000 HHonors points after spending $1,000 in first 120 days, no annual fee, status upgrades and more. (No free international transaction fees listed.)
• Marriott Rewards Visa: 70,000 bonus points after spending $1,000 in first 90 days, 1 free night stay after approval, $85 annual fee waived first year, no annual transaction fees and more.

Debit Cards for Travel

A majority of debit cards have international ATM fees. Some of the largest US banks can charge up to $5 plus an additional 3% for each withdrawal. I am guilty of having paid some of those in my earlier travel days and I can tell you that they really add up. Here are some of the best debit cards for travel available.

Schwab Bank High Yield Investor Checking: This card saved me on average $50 per month.

This checking account allows unlimited ATM reimbursement fees worldwide when opening a Schwab Brokerage Account. When a fee is charged it is credited back at the end of each month. The account has no monthly service fee, no minimum and offers 0.10% interest.

The Schwab Brokerage Account requires at least a $100 monthly transfer or a $1,000 minimum starting balance. They offer commission-free Schwab ETF online trades. This is currently the best debit card deal I can find that allows for unlimited free withdrawals from any ATM in the world.

Fidelity Cash Management Account: Fidelity offers free withdrawals from more than a million ATMs worldwide through wherever a Visa®, Plus® or Star® symbol is shown. There are no account balance minimums or monthly fees and they pay a small amount of interest. This account does not require a brokerage account but does limit free withdrawals to its network.

Ally Bank Online Savings: Ally allows for a maximum of six free withdrawals per month, as it is a savings account and not checking. Additional withdrawals cost $10 each. Ally charges up to a 1% fee of the amount and does not reimburse international ATM fees imposed by other banks. This is not as good of an option as the prior two but is still much better than the average debit card.

Rewards & Debit Cards for Travel Recap

Everyone spends money each month, whether they are home working or traveling abroad. It doesn’t make sense why someone would opt not put that spending to work on a rewards card. If you already want to travel, a rewards card can be used to bank points to cover the cost of airfare. For many people, that is one of the largest travel expenses they will face. Banking those points will put you one step closer to your destination.

Add to that at least one of the no ATM fee debit card for travel and this will help you to have more money for places to stay, great food and more experiences! I hope these tips on rewards cards and debit cards for travel will help you plan and save for your next adventure!

Cheers!

– Cam

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