If you’re living or planning to move abroad, you may be wondering what credit card is best to use in your new destination.
There are many important factors to consider, including foreign transaction fees and rewards structures that will give you the best bang for your buck throughout your travels. Plus, it’s important to understand the financial norms of the country or countries that you plan to travel to.
While credit cards are widely used in the United States, that is not always the case in other countries. Here’s our take on using credit cards as an expat and the best cards available today.
Best credit cards for expats
The Chase Sapphire Reserve credit card may have a hefty annual fee at $550 a year, but it comes with a laundry list of rewards that makes it more than worth it for any expat. New cardholders can earn an impressive 50,000 points if they spend $4,000 in the first three months. Plus, travelers can earn 10X points on hotels when they book through Chase Ultimate Rewards immediately after they spend the first $300 on travel purchases annually.
Nearly on par with the Chase Sapphire Reserve (but with a lower annual fee of $95) is the Capital One Venture Rewards Credit Card. This card has earned its spot on the consideration list of any globe-trotter with competitive rewards: 5X miles on hotels and rental cars booked through Capital One Travel and unlimited 2X miles per dollar on all other purchases. Better yet, you can earn 75,000 bonus miles when you spend $4,000 on purchases in the first three months from account opening. Finally, the Capital One Venture Rewards credit card charges no foreign transaction fees.
If you’re looking for a good credit card as an expat, but you don’t want the hassle of an annual fee, the Bank of America Travel Rewards credit card may be just the card for you. This card has no annual fee and no foreign transaction fees. It also comes with an introductory 0 percent APR offer on purchases that lasts 15 billing cycles (14.24 percent to 24.24 percent variable APR after). You’ll also earn 1.5 points on every dollar you spend and new cardholders are eligible for 25,000 bonus points if they spend $1,000 in the first 90 days after opening an account.
The Bank of America® Travel Rewards credit card content was last updated on April 9, 2022.
What to consider when using a credit card abroad
Credit card acceptance
If you’re coming from the United States, you’re probably used to the convenience of credit cards being accepted at most retailers. Credit card acceptance varies from country to country. While many bigger businesses may accept credit cards, local merchants or stores off the beaten path may not. Familiarize yourself with the financial landscape of your destination and consider back-up options like prepaid cards or cash if credit cards are not widely accepted where you’re going.
Foreign transaction fees
Travelers and expats alike should consider credit cards with no foreign transaction fees. Potential rewards from credit card purchases could be negated by foreign transaction fees that typically cost 3 percent of the purchase value. It may not seem like it will break the bank, but every little bit adds up—for example, a $500 purchase with a fee could cost you $515.
Informing your issuer
Notify your card issuer that you plan to use your card overseas and for how long. Unexpected overseas transactions may otherwise be flagged as fraud and you may be unable to use your credit card for purchases until you can contact your issuer to sort it out. It’s also a good idea to update your contact details if those are changing with your travel.
As many world travelers know, one major benefit of having a credit card abroad is getting points for flights and hotels. Being rewarded for purchases you already planned on making is beneficial and it can give you points for future trips around the globe. As an expat, it’s worth considering credit cards with great travel rewards.
Sign-up bonus spending requirements
If you’ll be living in a country where most transactions are handled with cash, then it may be difficult to meet the minimum spend requirement to earn a sign-up bonus. For example, if you had the Chase Sapphire Reserve, it may be difficult to earn the bonus offer of 50,000 points because you must spend $4,000 in the first three months of opening the account.
The bottom line
In most popular travel destinations, you should have no problem paying with your credit card. If you’re traveling somewhere off the beaten path, however, you may find it harder to use your credit card. Take the time to pick the right card for your travel, make sure you know how you’ll be able to earn or redeem any rewards and be sure to notify your credit card issuer that you’ll be using it abroad.