“Thanks for verifying that information, Ms. Mark.”
“No problem.”
“I’m satisfied with your application, so we’ll be sending out the card to you in seven to ten business days.”
“Great! Thanks for calling and verifying… ”
“You’re welcome. Bye.”
Easiest character check I ever passed. That conversation meant I was just approved for a travel credit card. One could assume that I already have one. Nope. Here’s why. A few years ago, I decided to stop playing material girl and purchase with actual money.
Credit cards irk me. Whenever I type in my number on a vendor site, the pinch of 18.5% (per year) on top of the final price hurts. Since I’m budgeting and saving money, there’s a reluctance to have one. I’m attempting to strike an oil well of money, not spend more to gain travel points.
What’s the Deal?
Travel credit cards allow a consumer to collect travel points on their purchases. You can then redeem those points towards flights. A few consistent features of cards:
- Signing bonus – many grant 15,000 to 20,000 travel points when you apply by a certain date.
- Accumulate points through purchases – The Bank of America Airlines Card gives you $1 mile for every real dollar you spend. The general range is $1 to $1.25. Many cards can be applied to gas, drugstore or grocery purchases.
- Brand loyalty – Some cards offer only Aeroplan miles or only applicable to certain carriers.
- Insurance – Trip cancellation/trip interruption or travel medical insurance are some standard services.
- Renewal bonus – renewal of a card is automatic, but with travel cards you can obtain points to renew. 2,500 is the norm.
If You Hate Them, Then Why Woman?!
Considering my stance on credit cards, my actions are contradictory. Truthfully, I prefer to research flightless options. I’m quite interested to read A Little Adrift’s upcoming guest blogger discuss this concept. I mainly chose cards as a back-up. In a rush I might have to fly somewhere. Purchasing gear for traveling is unavoidable, so I might as well earn points at the same time. I hope to achieve a flightless/flying ratio of 70/30%.
Which Ones are Good or Bad?
A site called Rewards Canada has a travel credit card comparison chart.
Rewards Canada also posted a feature on the best travel rewards credit cards for 2009. Categories are:
- Top Airline Credit Card.
- Top Hybrid Travel Credit Card.
- Top Travel Points Credit Card (with annual fee).
- Top Travel Points Credit Card (with no annual fee).
- Top Hotel Points Credit Card.
Listen to Others
Another good source is reading customer reviews. Credit Card Forum is a site created for consumers. Just search under ‘rewards’ and a plethora of reviews should appear. Another one I found is called Top Ten Reviews. Their tag line is “We Do the Research So You Don’t Have to”. My, strong promise. I managed to bring up a search for rewards cards – the link is here.
I Got Two
My credit rating is that good. Logic stands that it’s smarter to have more than one. When I’m traveling and have to make a decision, the right card will suit the occasion.
I chose the RBC Visa Platinum Avion and Capital One Miles Plus Platinum MasterCard. Why?
RBC Visa Platinum Avion
- Ability to book with any airline with no blackout periods. Useful when there are no seat sales.
- Option to transfer my RBC rewards to two major airlines.
- If I book with RBC and at least 14 days prior I get a decent redemption rate.
Capital One Miles Plus MasterCard
- Can book with any airline.
- Can also transfer my points into cash, gifts, hotels etc.
- 2% return on all purchases.
- Low yearly fee.
- I already have a Capital One Platinum, thus getting approved was no problem.
Important Points to Consider When Choosing
- How do you like to travel? With a single carrier or no brand loyalty? Contemplate your goals.
- How often do you use your credit cards? I only use them for big ticket items, not gas or groceries.
- Make sure there’s a signing bonus – the main motivator for obtaining one.
- Conversion rates. Consider the range. Capital One use to be zero, now they charge 1%. My RBC card will charge a bit more – 2.5%. However, a few also charge 3%.
- Double check that the card you’re selecting has insurance options.
- What other perks come with the card? I’m happy that my points on the Capital One can be used for other purposes.
- You may be defeating the purpose if you buy a bunch of crap just to rack up points. Don’t get a card if you can’t pay the incoming bills.
It makes sense to be prepared. Spread your money in several areas: cash, traveler cheques, ATM cards, credit cards. A travel rewards credit card is just another option. And this lady appreciates more than one.
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{ 15 comments… read them below or add one }
ugh. CC’s are my current quandry for a year abroad & how many countries take AmEx these days?… Initially, I thought travel rewards CC’s would be ideal for me- until I realized many have annual fees and I have 2 pending FF awards (1 which expires at the end of this year) from my 2 fave carriers who don’t service many routes near Korea. Nix that. Will be visiting my bank this week to inquire about a regular ATM/visa card. No cool perks but might be a decent backup. My HSBC cashback rewards CC doesn’t have an annual fee…
I am leaving soon! Well in eight weeks or so and I still haven’t found a good Canadian bank. I’ve heard HSBC is pretty good and I think foreigh transaction fees for PC Banking is only $3 compared to $5 at TD and CIBC.
I’ve really been procrastinating on this one. I need to just go into a branch at every bank and compare.
Kathy, great advice. Hopefully others read this comment and take heed. You are correct on watching the conversion rates, and more importantly when buying an airline ticket the currency choice is paramount.
My plan is to buy when I get to a country. For instance, in London I hope to pay in pounds, not CDN dollars. It also helps to have a bank account that’s not in dollars, but Euros or pounds. Thanks for stopping by and love your wisdom in these matters! :)
You really need to check the foreign conversion fees for both your credit cards and your ATM cards (always carry at least two of each on a trip). I have a Cap One card I use only for travel because of its 0% conversion fee, and I have a Credit Union checking account because of the 1% conversion fee, and five fee-free “foreign” ATM accesses a month.
Also be careful about buying airline tickets from foreign carriers while you’re home – your US card will charge a foreign conversion fee EVEN THOUGH you’re charged in dollars! When you’re abroad, watch out for outfits that try to put a charge through in dollars instead of the local currency (google dynamic currency conversion).
You already know to contact your CC and ATM companies and let them know when and where you’re traveling, right? Otherwise the fraud software will block your charges.
You’re welcome Floreta. Come and visit again. :)
thanks for the info! I do think a rewards points card would be good for me and my current lifestyle. Hmmm, maybe I need to follow your advice. But, I also hate credit cards and am a woman of contradiction. lol!
Chris (Aussie Nomad) – I knew it. Should have married an Aussie when I had the chance. :) Oh, I’ve never had a chance. Any takers??
I have an upcoming post about this very topic :) In Australia I was lucky enough to score a CC that has no foreign currency fees at all and as long as I keep it topped up with credit will never pay interest either. Not to bad eh :) Pity its not linked to an air miles program.
The currency conversion fees are what irks me. I will use my american express frequent flyer card with Qantas for big ticket items and leave the fee free card for the smaller things and when I don’t have cash on me.
@Ayngelina – funny you ask, yes one of the next Gypsy Tips will be about banking. Watch for it. But lady, you’re leaving soon correct?
@travelingsavage – I put it off as well, all to do with my aversion to credit. :) However, this strikes me as credit with purpose.
@soultravelers3 – once again, some great advice. Have I mentioned you have the cutest family?
I realize you’re mainly concerned about budget travel & not wanting to run up charges on a credit card, but if I’m not mistaken the best deal you can get on foreign currency conversion is via CC. So, while you’re traveling, you might consider using the card for purchases you’ve budgeted for & then pay the bill right away to avoid finance charges. You save money & rack up the miles or points.
This can also work for purchases at home before you leave (not the conversion issue obviously) – if you purchase things you’ve budgeted for, pay the card immediately when the bill comes in, you earn miles/points but have no finance charge.
You do have to be dilligent & have lots of self-discipline though. :-)
It’s a tricky issue. We hate credit cards ( the US dollar ones are particularly painful in Europe) and hate debt. We did our homework on getting good ones for travel, but since we started our family world tour in 2006, we almost NEVER use them.
We only use them when we have to and REALLY try to avoid them in Europe (where we prefer to pay in Euros etc) because it’s very painful.
Timely post – I’m currently in the process of looking for credit cards that will work for me. I’m sadly behind the times in this area. Thanks!
Wow Capital One has a 1% foreign currency conversion charge? Sign me up.
With 2 months to go to my trip I still haven’t chosen a bank, any chance you’ll be doing a post on that any time soon :)
Thanks for visiting and commenting Shannon! :)
Hmmm.. my spidey sense tells me your guest might talk freighter. No matter, can’t wait for the post!
The credit card issue always irks me a little too. I have a CapOne to avoid the fees if I do need to use a card overseas, but like you, I reeeaaally try to avoid putting things on the card. The blogger next week should have some great tips for you – but I’ll give you a heads up…it’s not precisely “budget” travel :-)