Best Credit Cards for Overseas Travel

Ready to set off on an overseas adventure? Before you pack up your suitcases, make sure that your wallet is packed well for the trip. Your well-wishers at mymoneykarma don't want you to fall in trouble and hence urge you to keep the following in mind while prepping for your trip.

5 Useful Tips

1. Your Credit Card Should Be Suitable for Overseas Travel

   You might have a great card with innumerable benefits, but it doesn't mean that it is fit for traveling abroad. Before setting off, make sure that your credit card has EMV compatibility and doesn't charge you for foreign transactions.

   If your credit card has a small embedded golden square, be sure that it is EMV-enabled. These chip-enabled cards are more secure than the erstwhile popular magnetic stripe cards. The EMV chip cards work on a superior technology than the erstwhile magstripe cards and it is more difficult to hack into your account information through chip transactions than the ones through the magnetic ones. Travelers are prone to becoming victims of fraudsters. With the advent of these chip cards, the world has breathed a sigh of relief as it promises more security from credit card frauds.

   Most Indian credit cards typically charge a fee on every foreign transaction. It could be as expensive as 5% of your total purchase per transaction. You would end up paying a lot of money for purchases. Instead, look for a credit card that doesn't levy the foreign transaction fee. You could actually save a lot this way. Consider getting a forex card as well.

2. You Should Carry Multiple Cards

   Now that you have a credit card with EMV chip as well as no foreign transaction fee, do you think you are completely prepared to fly off? I don't think so. You need at least another card for backup. Are you wondering why? Well, be prepared for emergencies. Think of the worst - what if your card is lost or stolen? Expecting a replacement card immediately would be impractical. You would be inevitably stranded at a foreign location without any access to funds. It is better to be safe than sorry. Get yourself that backup card asap.

3. You Must Understand Your Card Network

   Visa and MasterCards are more or less accepted universally, but there are quite a few other card networks like Discover, Amex, RuPay, etc. that do not work in all countries. Check whether your card network works in the destination country.

4. Inform The Card Issuer about the Trip

   Credit card issuers lookout for fraudulent transactions. Overseas transactions generally come off as potential red flags. Your card could get blocked. Don't let it roll so far. Inform your card issuing company about your upcoming trip - convey the location and duration of travel. You could do this by calling up their customer service department. Some companies provide this facility on their websites.

5. Carry Some Cash

   In spite of carrying multiple credit cards, you might run into unexpected exigencies. Your itinerary might include an obscure location where cards aren't accepted. You should carry some cash for such emergencies. It need not be your primary mode of payment, but it might come to use just in case.

Choosing the Right Card

Credit cards have become a prerequisite for travel. It is always safer to travel with less cash, and credit cards facilitate this. Whether you choose to shop or dine or buy airline tickets, credit cards make the best mode of payment. Certain credit cards also offer valuable travel services. However, the biggest issue is when the credit cards levy exorbitant charges for foreign transactions. Should you pay such high charges or should you look for alternatives?

Well, you must always look for cheaper travel options, but finding the right credit card to suit your purpose can be a tedious task. However, let me tell you that you can save a considerable amount of funds if you just research enough to find the suitable card. Most credit cards in the US and UK charge low foreign transaction fees, sometimes even as low as 0%. Unfortunately, Indians aren't that lucky. All Indian credit cards charge at least 2% foreign transaction charges, and these are the premium travel cards that are difficult to qualify for. Ordinary credit cards might charge you an insanely high fee. Do not keep your credit card options limited; broaden your horizons of knowledge on credit cards, devote some quality time to it, and search extensively for the best credit card deal.

These are the criteria that you must check before deciding on taking a credit card:

1. If you are a frequent overseas traveler, the first prerequisite for your apt credit card should be a decently low currency conversion charge and foreign exchange rate.

2. Look for cards offering reward points that can be converted to Air-miles, or direct Air-miles that can be redeemed while purchasing flight tickets.

3. Check for cards that give you free access to Airport Lounges.

4. Credit cards levy a markup fee of 3% to 5% on foreign transactions. This essentially means that if you spend Rs.1 lakh on your foreign trip by a credit card with 5% markup fee, you will end up paying an extra Rs.5000 to the issuer. Hence, you should look for a card that has low markup charges.

5. A few credit cards levy a fee on swiping the card for purchases. Avoid those. You will find many cards that do not charge this absurd fee.

6. Most credit cards charge varying rates for cash withdrawals through ATMs. Find the card that charges the least. Nevertheless, try to avoid cash advances as much as possible.

Trending Travel Credit Cards of 2018

If you are planning on a foreign trip, here are some of the best travel credit cards that you could consider. Each has some advantages and disadvantages. Find the one that suits your needs.

The Expensive Ones

Yes First Exclusive Credit Card

The Yes First Exclusive Credit Card welcomes you with 50000 reward points on your very first transaction and also gives you a complimentary membership of TAJ Inner Circle. It has a dedicated website to redeem the reward points which offer exciting deals. Its overseas medical insurance has coverage of Rs.50 lakhs. This card gives unlimited access to airport lounges to the primary as well as add-on cardholders.

The best feature of this card is a low markup fee of 1.75%, which is rare to find in credit cards. This is one of the best travel credit cards as it has a lot of premium features as well as low transaction rates, but it isn't accessible to all. Since it is a premium card, only those who earn more than 50 lakhs a year are eligible for this card. Additionally, it has a membership charge of more than Rs.10,000 each year.

HDFC Infinia Card

If you are a frequent traveler and do not wish to be nagged by restricted credit limit, this card is the best for you as it offers a minimum credit limit of Rs.10 lakhs. This card suits international travelers well as it has a markup fee of 2% on all foreign transactions. You get reward points for each transaction made using the card, which can either be redeemed or converted to Air-miles.

It also gives access to more than 700 airport lounges globally to the primary and add-on cardholders. This card provides medical insurance of Rs.50 lakhs while traveling overseas and promises a compensation of Rs.3 crore in case of an air accident. Additionally, golf enthusiasts get access to the finest golf courses for free. This card also has a whopping annual membership fee of Rs. 10,000.

HDFC Diners Black Credit Card

The HDFC Diners Black Credit Card has unbeatable savings scheme and rewards plan. The credit limit is exceptionally high for this card and a low markup fee of 2% on all foreign transactions. Airline travelers also get free airport lounge access, concierge services, additional baggage allowance of 10kg and premiere check-in facilities during domestic travel.

Golfers would love this card as it gives you a Green Fee waiver on golf games at designated golf courses in India and abroad. This card is great for foodies too, as you can avail a whopping 15% discount on your restaurant bills across the country. Air accidents are covered by this card and the nominee will receive a compensation of Rs.50 lakhs. This card is quite affordable, with Rs.1500 joining fees and Rs.500 for subsequent yearly renewals.

The Affordable Ones

HDFC Regalia Credit Card

HDFC Regalia Credit Card offers maximum travel and other benefits with high membership rewards. It is extremely secure for all types of overseas transactions as it contains an EMV chip. It has a low markup fee of 2% per month and also offers an interest-free grace period for paying off the balance in 50 days. It charges an annual fee of Rs.2500 but welcomes you with a bonus of 2500 reward points. This card gives you complimentary access to international airport lounges - around 600 of them, worldwide. You can avail medical insurance of Rs.12 lakh for emergencies during overseas travel and receive a compensation of Rs.1 crore for air accidents. However, this card might not suit everyone as you should have a minimum monthly income of Rs.1.2 lakh to qualify for this card.

Yes First Preferred Credit Card

The Yes First Preferred Credit Card welcomes you with 15000 reward points on your first transaction. Just like the Yes First Exclusive Card, this one too lets you access the bank's dedicated website to redeem the reward points on exciting deals. Its overseas medical insurance has coverage of Rs.25 lakhs. This card gives free access to four airport lounges in a year. The best feature of this card is a low markup fee of 1.75%. This is also a great travel credit card as it is quite affordable. Those who earn more than 18 lakhs a year are eligible for this card and need to pay a reasonable membership charge of around Rs.2500 each year.

Many more co-branded credit cards are available that provide amazing travel benefits. Most of these cards have tie-ups with airlines or travel companies and offer exciting combo schemes on flight tickets, rental cars and hotel bookings. The Amex Platinum Travel Credit Card has become very popular in India. Citi Premier Miles Credit Card and SBI Air India Signature Card are also worth consideration. Get yourself the best and the most suitable credit card before you step out of your country.

To Sum Up

When you are stepping out of your country, you must be prepared to face the unexpected. Make yourself financially secured during your travel with the best travel credit card. However, make sure that you check your credit score before applying for a credit card.

Carry multiple cards with EMV chips, and check whether your credit cards are accepted in the country that you are visiting and definitely carry some cash at all times. May your vacation be a smooth and memorable experience.