- 1 Accepting Credit Cards and PayPal on Your eCommerce Site
- 2 How To Start Credit Card Point Hacking
- 3 Credit Card To Start a Business ?
- 4 The Credit Card Journey: From Applying to Buying
- 4.0.1 What do I do when I get my credit card?
- 220.127.116.11.1 Step 1: Activate the card. Instructions for activation will be included with your card.
- 18.104.22.168.2 Step 2: Ensure your account information is accurate, including your full name, address and contact information, and review your assigned credit line to know how much you have available to you.
- 22.214.171.124.3 Step 3: Read your Card Agreement and other Terms and Conditions. The Card Agreement explains how your account balance is calculated and what your annual percentage rate, or APR is, so it is important for you to read this information before you start using the card.
- 126.96.36.199.4 Step 4: Sign the back of the card.
- 188.8.131.52.5 Step 5: Sign up for online account management, become familiar with the online tools offered and set your preferences for bill payment reminders, spending alerts and automatic payments.
- 184.108.40.206.6 Step 6: You are ready to use your card at the store. If asked at the counter if your card is debit or credit, select “credit.”
- 4.0.2 How do I use my card correctly?
- 4.0.1 What do I do when I get my credit card?
- 5 Best International Credit Cards With No Foreign Transaction Fee
- 5.1 Best international credit cards for 2017
- 5.2 The Simple Dollar’s top international credit cards for 2017
- 5.3 The Simple Dollar’s top picks: summed up
- 5.4 Which international card is the best for me?
- 5.5 Foreign transaction fees starting to fade
- 5.6 Directory of All Card Issuers and their Foreign Transaction Fees
- 5.7 Have a plan B (and possibly C and D)
- 5.8 Foreign transaction fees and dynamic currency conversion fees: What’s the difference?
- 5.9 ATMs abroad: what to watch out for once you’re FX free
- 5.10 More questions to ask before taking your card overseas
- 5.11 Pro-tip: Mobile wallets are a globetrotter’s best friend
Accepting Credit Cards and PayPal on Your eCommerce Site
This excerpt is part of Entrepreneur.com's Second-Quarter Startup Kit which explores the fundamentals of starting up in a wide range of industries.
In Start Your Own e-Business, the staff at Entrepreneur Press and writer Rich Mintzer explain how to build a dotcom business that will succeed. In this book, you'll find recipes for success, road maps that pinpoint the hazards, and dozens of interviews with dotcom entrepreneurs who've proved they’ve got what it takes to survive in this sometimes fickle marketplace. In this edited excerpt, the authors discuss the two types of online payment processors you can use on your ecommerce site.
Thanks to the growth of ecommerce sites over the past ten years, credit card accounts are now very easy to set up on your site. The common methods of accepting credit card payments is either by using your own merchant account or by utilizing a payment gateway account, also known as a third-party merchant.
An internet merchant account gives you the ability to process credit cards and can be obtained through a bank. It's viewed by the bank as a line of credit that's extended to you. You must apply for this, just as you would any loan.
A good place to start your search for a merchant account is your own bank. Most issue credit cards, and if you have a long-term relationship with the institution, that’s a big plus. What if your bank says no? Try a few other local banks and even offer to move all your accounts there or at least set up a business account. You just may be rewarded with merchant status.
You'll also probably need a payment gateway account, which is an online credit card processor or transaction handler that's capable of hooking into credit card accounts belonging to the online shopper and your internet merchant account. The payment gateway handles verification and transfer requests. It interacts with the card issuer’s bank to authorize the credit card in real time when a purchase is made on a website.
The leading providers of payment gateway accounts targeting smaller merchants include:
If you don’t have a merchant account, these providers can help you set one up and offer a payment gateway in one convenient package.
Credit cards aren’t processed cheaply, at least not for a startup. A typical fee schedule for a small-volume account (fewer than 1,000 transactions monthly) would include monthly processing fees ranging from $10 to $100, plus transaction fees of about 3 to 5 percent per transaction. Some providers also charge startup fees, but shop around--in many cases the startup fee will be waived if you ask.
Entrepreneurs and freelancers are sure to love this free, cloud-based online invoicing and payments platform because it’s been designed for the small business owner. Due provides a wealth of financial, accounting, and project management tools that can save you time and money on non-revenue generating tasks while delivering a professional look and feel that also reflects your brand image. The platform includes a time tracking app, templates for quotes and invoices, online invoices for domestic and global clients, mobile and email invoice viewing and payment integration, reporting and dashboard functionality, and integration with other software like Basecamp. The transparent, low-cost payment options deepen the value that Due offers, including a range of payment acceptance methods like domestic and international credit card processing with a flat rate and no hidden fees, digital wallet functionality, and e-cash/e-check acceptance.
PayPal enables any individual or business with an email address to securely, easily and quickly send and receive payments online. PayPal’s service builds on the existing financial infrastructure of bank accounts and credit cards, and uses advanced proprietary fraud-prevention systems to create a safe, global, real-time payment solution.
PayPal has quickly become a global leader in online payment solutions. There are two major PayPal offerings for merchants.
1. Website Payments Standard. This is an easy way to start accepting credit cards online. A simple integration into your shopping cart allows customers to pay securely and easily. (PayPal seamlessly integrates with hundreds of compatible carts or custom-built storefronts.) If you don’t have a shopping cart, the free PayPal Shopping Cart can be set up quickly and easily as well.
After setting up the system on your website--which takes just a few minutes--you'll be able to accept all major credit cards, debit cards and bank transfers. Website Payments Standard is secure, and you don’t need a separate merchant account or gateway. Your customers don’t need a PayPal account. Transaction fees are low.
2. Website Payments Pro. This all-in-one solution gives you features comparable to merchant accounts and gateways, through a single provider and at a lower cost. There's a $30 monthly fee but no setup fee. Transaction fees are listed on the PayPal website under PayPal Website Payments Pro.
With this service, customers paying by credit card stay on your website for the entire transaction; PayPal is invisible. Website Payments Pro is already integrated into many popular shopping carts, or it can be easily added to a custom-built shopping cart.
Website Payments Pro includes a virtual terminal, which allows you to process payments for phone, fax and mail orders.
Both merchant and third-party accounts (aka gateway accounts) have their advantages and disadvantages. The primary advantages of having a merchant account include:
- Ease of transaction
- Protection. Banks are protected by the FDIC and merchant accounts typically come with fraud protection.
- You maintain control since the transaction is directly between the customer and your merchant account. There's no intermediary handling the money or getting the customer’s information.
- Typically you’ll receive payments faster than if you use a third-party payment service.
- Your business name is on the transaction statement.
Disadvantages of a merchant account include:
- Cost. Collecting credit and debit cards comes with a price tag for entrepreneurs.
- You must handle disputes. If you have your own merchant account, you'll be responsible for disputes, chargebacks and any compliance, fraud or security issues that may arise.
- Hidden fees. You can get hit with them, so read your contract very carefully.
Advantages of a third-party merchant account:
- You don’t need to get approved for merchant services by a bank. If you have low credit scores or no credit, you can sidestep the approval process.
- You have a company on your side when disputes arise. They can play middleman and work on behalf of your business.
- PayPal, if you choose to use it, is a very well known and trusted service for transactions.
Disadvantages of third-party merchants:
- Potentially higher fees.
- Their name is on the transaction and possibly links to their sites or those of other businesses.
- Reputation. Not all third-party merchants are PayPal, and while many have excellent reputations, others are known for working primarily with adult websites. Still others have been cited for fraud. You need to choose carefully.
How To Start Credit Card Point Hacking
I’m all about maximizing the utility of my money, the bang for my buck so to speak. I started out trying to cut every little expense I could find, then I worked on buying the right house with 20% down, increasing my income and savings rate, and maximizing my tax advantaged accounts. Now that I’m firing on all cylinders, I’m comfortable looking into other areas to gain an edge on my finances. One of these areas is points programs, specifically points programs that can give me a hefty bonus for signing up for a credit card that I am never going to pay a dime of interest on.
Choosing What Programs To Start Credit Card Point Hacking:
The vast majority of rewards credit cards are tied to air travel or hotel stays. For the most part these are optional expenses surrounding vacations, which is an area of our budgets that I personally feel a bit of guilt when I spend money on it. It’s a completely unnecessary expense and when its over I have no physical value to show for it, “just” a few good memories. It’s only natural then to try to limit the expenses in these areas as much as possible, and I think that’s why many people are drawn to using credit card points for travel. I’m currently participating in 4 rewards programs, Delta Skymiles, Hilton Honors, IHG Rewards, and Choice Privileges. I chose the first 3 of these because I utilize these services through one of my employers, which allows me to earn a bunch of points with no cost to me. I added in the Choice privileges account because the associated card comes with a decent sign up bonus, no annual fees, and there are many convenient hotels for our family to stay at in their network.
Skymiles is the first reward program I ever signed up for. I signed up for Skymiles back in 2009 when I started travelling for work. About 75% of the flights I am on are Delta flights. Many of the flights I take are relatively short flights but are often high cost due to last minute one way tickets (all paid for by my boss). Up until last year the Skymiles didn’t add up to much, but recently they switched how people earn Skymiles on flights from being based on total miles flown to being based on the ticket price. I now earn 5 miles per dollar spent. This means on an average $500 flight I will earn 2,500 miles, where in the past that same flight may have only earned me 500 miles.
In addition to flights I picked up the Gold Delta Skymiles Card 2 years ago and received a 50,000 Skymiles bonus. In addition to the bonus I receive 1 mile per dollar spent. I also get 1 free checked bag per person per flight on all Delta flights and priority boarding. The free checked bags is a wash for me, but it does save my employer a few hundred dollars a year (we get re-reimbursed for our baggage costs). I really like having priority boarding. I always get window seats and I hate getting to my seat when others have already sat down in that row, especially if its a 3 seat row. This card comes with a $95 yearly fee, which I justify on the priority boarding alone.
Skymiles have a wide range of redemption vs. dollars. For people who fly business class internationally Skymiles can have a redemption value of well over 2 cents a piece. For domestic flights they are generally around 1 cent a piece. I personally don’t fly when it isn’t for work because with a family of 6 flying is always more expensive than driving and Mrs. C. has absolutely no desire to ever step foot on an airplane. Using the Skymiles marketplace there are other options, but the redemption value isn’t that great. For hotel and housing rentals, it seems to be around 0.75 cents per mile.
What Will I Use My Skymiles On?
I’ve thought about saving up my miles and spending them when the kids are grown, but I’d rather not save them for that long. I do enough saving and I would much rather enjoy the miles now than in 10 – 15 years. Since flights don’t make sense for us now, hotel stays is the best option. We are planning to rent a house in the Orlando Disney World area for roughly 8 nights next August. We will be renting a 4 bedroom house with a pool within a 10 minute drive of the parks. These houses normally rent out for around $100 to $150 a night. The Skymiles redemptions on these vary wildly on the time of year you book, which I am really glad I figured out. When I first started looking into these in February these houses would be around 14,000 points per night. Booking in the May/ June time frame the cost increases to 20,000 to 25,000 points per night. That’s a huge difference especially staying for over a week! If it costs us 15,000 points per night we will spend about 120,000 Skymiles on this trip. Currently I have over 160,000 Skymiles, so I have some room if we end up having to pay more points per night or if we want to book a few extra days.
I have been using my Delta AMEX credit card exclusively for the past year and a half, but recently realized that this card is highly inefficient at building value for rewards. I’m getting 0.75 cents of value per Skymile and only receiving 1 Skymile per dollar spent. That’s not very good.
I looked into the Hilton Honors system and their points are valued at .5 cents, but with the Hilton Honors AMEX card I get 5 points per dollar spent on gas, grocery, and restaurants, which is about half of our card spending, and 3 points per dollar on everything else. Even at a .5 cent valuation this gives me an average of 2 cents value per dollar spent, which is 2.6X better than the Skymiles card.
This isn’t to say that the Skymiles card is bad, it’s just not super efficient at building up value if your goal is to redeem for hotel stays. I’m keeping this card around solely for the priority boarding.
I’ve worked for one of my employers since 2009 who typically books us in Hampton Inn’s when we are travelling. I didn’t even think about using points until a coupe years ago when I signed up for their rewards program, then I didn’t travel for 12 months and my points expired. This past spring I traveled a lot and made sure that I always used my Hilton Honors reward number when checking in. I also looked on their website and they were running a special deal for a good chunk of the season that gave me an extra 2,000 points per night. At then end of the season I had 77,000 points amassed. I figured this wouldn’t amount to much, but decided to look into the redemption values available.
It turns out that hotel redemptions start at only 10,000 points. There aren’t many of these, but for us two of them are in fairly good strategic locations. There is one in Seymour, IN about an hour south of Indianapolis. It gives us a nice stopping point on the way to visit my parents in Bowling Green, KY. The other location is in Bowling Green, OH. Bowling Green, OH is 30 minutes south of the Toledo Zoo, which we get in for 1/2 price thanks to our local zoo membership. It is also only 1 hour and 15 minutes away from Cedar Point. It’s a bit of a drive, but for the low point redemption it will be worth a trip someday, especially since Cedar Point regularly gives 1/2 off admission tickets to Michigan residents in August.
These two hotels are typically only 10,000 points, which gives an amazing 1 cent to 1.5 cent valuation on hotel stays. For a hotel giving 1.5 cents valuation, using my Hilton Honors card for gas, groceries, and restaurants gives me an effective 7.5 cents per dollar spent. Overall Hilton uses a dynamic system for point redemption which changes with the price of the hotel, so depending on the night redemption could be 20,000 points or 40,000 points. Most redemptions are roughly 0.4 cents to 0.5 cents in point value.
The Hilton Honors AMEX Cards:
Hilton Honors offers two AMEX Cards, the Hilton honors AMEX card and the Hilton Honors Surpass Card:
Hilton Honors Card: I just signed up for this card which gives a 50,000 point sign up bonus for spending $1,000 in the first 3 months. I have read that the bonus occasionally jumps to 80,000 points. It has the following features:
- 7X points for Hilton Hotel Charges
- 5X Points for gas, grocery, an restaurants
- 3X points for everything else
- Automatic Silver Status which gives a 15% point bonus on Hilton stays
- Upgrade to Gold Status if $20,000 of card spend per calendar year
- No Annual Fee
The Hilton Honors Suprass Card comes with 75,000 bonus points for spending $3,000 in 3 months and has the following features:
- 12X points on Hilton hotel charges
- 6X points on gas, grocery, and restaurants
- 3X points on everything else
- Automatic Gold Status, which gives a 25% point bonus on Hilton stays
- Upgrade to Diamond Status if $40,000 in card spend per calendar year
- $75 annual fee
I’m not a big fan of annual fees, so for me pulling the trigger on the Surpass card will be difficult to do. Obviously the higher sign up bonus is attractive, but the only truly valuable difference is earning 12X points on Hilton expenses rather than 7X with the no fee Hilton Honors card. Since my boss books our rooms for us and pays for them directly, I have no direct Hilton hotel charges, which takes away this benefit. At 0.5 cents per point, you would need to gain 15,000 points from the difference in bonus points to validate the yearly $75 fee, this would mean spending $3,000 per year on Hilton hotels. The other difference is the 1X point bonus on gas, grocery, and restaurants. You would need to charge $15,000 per year in these categories to make up for the yearly fee without any direct Hilton hotel charges.
For me this card may be worth getting at some point for the bonus points, but I would have to cancel it within the first year because the no fee Hilton Honors card makes much more sense for me personally. Mrs. C. will also be signing up for a no fee Hilton Honors card, but we are going to wait a bit to see if the bonus goes back up on it.
Between the card sign up bonuses, the points I get from stays while working, and the points I will get from using my Hilton Honors card as my main card, I will build up points very quickly, so what am I going to use them on?
What I’m Using My Hilton Honors Points On:
1. Trips to Bowling Green, KY:
As I mentioned above my parents live in Bowling Green and there is a hotel on the way that is only 10,000 points per night. We are going to try out how well we can do piling into 1 hotel room, but it is possible in the future we will get 2 rooms. I think 1 room is fine for a night or 2, but any longer we will certainly want more space. The location of the Seymour Indiana hotel is a great stopping point. It allows us to go do something in Indianapolis, like the Children’s Museum or Zoo on our way down, then drive for an hour and get some good rest before heading to my parents house. This also allows us to arrive in the mid morning instead of the late evening.
2. Trips to Toledo and Cedar Point:
The hotel in Bowling Green, OH is 30 minutes south of Toledo and 1 hour and 15 minutes from Cedar Point. We will probably do a Toledo only trip where we drive to Toledo and visit the Imagination Station science museum (which is free thanks to our Museum of Science and Industry membership), then drive to Bowling Green, OH and wake up the next morning to visit the zoo and drive back that night.
Going to Cedar Point is a bit iffy on our schedule, probably 2019 is the most likely time we will go. Cedar point has given half off admissions to Michigan residents for part of August for 2 years in a row. I would like to take the kids in August some time and 2019 is our next opportunity. This year I go back to work in early August and next year we are planning a trip to Disney World for August. Waiting til 2019 also gives the kids some time to grow. We would probably spend 3 nights in the hotel and 2 days at the park. Once again, we may double up on the rooms giving us a lot more space. Still, 20,000 points a night isn’t bad, especially if we are only paying half price for tickets.
3. 2 day trips to Chicago:
When it comes to trips to Chicago staying in a hotel is purely a convenience. We can drive back and forth to our home, which is roughly a 2 hour drive. During the summer we won’t use any Hilton points for hotel rooms because the redemptions are so high, generally 30,000 – 40,000 points per room. In the Fall these rates drop quite a bit and rooms not far from the Magnificent Mile area can be had for around 20,000 points. With our membership to the Museum of Science and Industry giving us free admission there, the Lincoln park zoo being a free attraction, and getting half price admission to the Children’s museum at Navy pier thanks to our membership to our local Curious Kids Museum, we have a lot of relatively cheap activities we can do in the Chicago area.
4. Trips to Orlando
Finally we have the heavy hitter. We have been saving up our Skymiles for years between my flights and our Delta Skymiles card for housing stays in Orlando. Since the Skymiles card spend of 1 point per dollar is not attractive for redemptions, we are looking into using our Hilton points for rooms down there for future visits.
Homewood Suites has a 2 room suite with 2 queen beds in the bedroom and a queen sofabed in the living room. There is plenty of square footage to add an inflatable mattress or two and the rooms come with a full kitchen. These suites are 20,000 points per night and when you redeem stays as a silver member or above you get a 5th night free with every 4 nights of point redemption. We plan on doing 1 large trip which would likely be 15 days, and multiple smaller trips that would be 4 – 5 days in the not too distant future (2020 – 2022 time frame). This is where we will spend a lot of our points.
It’s rare that I stay at IHG Hotels, which are primarily Holiday Inn’s for work. There is one job that we are always at an IHG Property, but other than that it is fairly uncommon. Currently I have just under 15,000 points. Points with IHG properties vary a lot, but Candlewood Suites are fairly consistent at between .75 cents and 1.30 cents per night. The worst deal I found was for the former Nickelodeon water park in Orlando Florida. The rooms are 2 Bedroom suites which is really nice, but they require 35,000 points and the rooms can sell for as little as $86. That gives a redemption of only .25 cents per point, certainly not ideal. It may be a great hotel to pay for 1 or 2 nights, but not to use with points.
The IHG Mastercard currently has a 60,000 point sign up bonus and gives 5,000 points for adding another user. This card has had sign up bonuses of up to 100,000 points, so I’m going to wait to pick one up to see if we can get a bigger bonus. The card offers:
- 5X points for hotel stays
- 2X points for gas, grocery, and restaurants
- 1X point for everything else
- Complementary Platinum status (50% bonus points on stays and 10% point rebate on redemptions)
- 1 free night at any IHG property on Anniversary of card date each year
- $49 annual fee
Value wise, this card doesn’t make as much sense to use as the Hilton Honors card as a daily card because the points are much lower. It does make sense to keep this card though because the $49 annual fee is MUCH cheaper than any hotel room. My understanding is that they don’t limit the rooms either for this, meaning you can redeem your free anniversary room at any property that you could redeem your points for. Here are a list of a few examples I found:
- Las Vegas – Palazzo Intercontinental Bella Suite normally $430 or 60,000 points
- Washington D.C. – The Willard Interconitinental normally $234 or 60,000 points
- Chicago – Magnificent Mile Intercontinental normally $250 or 40,000 points
- New York City – Times Square Holiday Inn normally $254 or $40,000 points
Once the bonus goes back up I will certainly snag a card for myself and Mrs. C, which will allow us to get 2 nights free per year. Well, 2 nights for $50 each, but when the normal cost per night is $250 it’s an amazing deal.
What Will I Spend My Points On?
For the most part, the points I earn from the credit card bonuses and from staying at IHG hotels I will use for stays at Candlewood Suites. Most of these are lower tier properties offering redemption at 15,000 points per night. Since we have a larger family the larger rooms Candlewood Suites provides are ideal. If we get the cards with 100,000 sign on bonuses, this will give us 13 nights at Candlewood Suites, worth roughly $2,000. We will then stay at a couple nights per year at a nice hotel, giving us roughly $400 in value over the annual card fee.
Choice Hotels is typically a less expensive brand than Hilton and IHG. When I’ve stayed at Choice Hotels I’ve typically had good experiences, but I’m also not that picky, I just need a place to crash. For me the difficulty with this program is that I don’t stay at these hotels for work, so I’m not earning any points from stays. For vacations when I am paying for a hotel, the rates and availability of Choice hotels are way better than Hilton, IHG, or other competitors. Choice also has a “Lowest Price Guarantee” when booking on Choicehotels.com . I’ve done a bit of searching and have yet to find lower prices on sites like Hotels.com. It’s nice to know that if I did, they would reimburse for the entire price of the room.
The Choice Privileges Visa Card is a no fee card and comes with 32,000 bonus points. It has the following features:
- 5X points on Hotel stays
- 2X points on everything else
- 8,000 bonus points for every $10,000 in card spend per year.
- Automatic Gold Status = 10% extra points per stay
- No Fee
Redemptions start at 6,000 points, however most hotels are in the 8,000 – 12,000 range. Choice has a really weird way of determining redemption value and I can’t make heads or tails of it, despite spending several hours researching it. What I mean by this is that the value per point has drastic variations. Hilton Honors for example is very consistent with most of it’s properties being around 0.5 cents per point, with a few outliers. When I was checking on Choice redemptions I found variations from as low as .35 cents per point to a high of 1.5 cents per night. It is really important with this program to compare these when booking.
Does It Make Sense To Use The Card?
Of course it makes sense to get the 32,000 bonus points, but beyond that does this card make sense to use? For me to determine this I looked at both the point redemption value and the opportunity cost of using these points vs. another card. Getting 2X points is fairly run of the mill, but it can have an advantage over other cards, especially if you can hit 10,000 in spending. Here’s my comparison to the Hilton Honors Card.
With Hilton Honors I get 5X points for gas, grocery, and restaurants. If I spend $10,000 in this category I earn 50,000 points which is worth $250 at a .50 cent valuation. If I spend $10,000 in other categories I earn 30,000 points which is worth $150 at a .50 cent valuation. If I spend $10,000 with the Choice card I earn 20,000 points, plus 8,000 bonus points for 28,000 points total. With a .50 cent valuation this is only $140, which is less than the Hilton card, which I don’t have to spend $10,000 to get bonus points.
On the surface Hilton looks like the winner, but I need to also look at the utility of the points. One of the main things we want to use points for is stays in Chicago for 2 day trips, which would eliminate 4 hours of drive time. For Hilton points I have to spend 30,000 miles for a 1 night stay in Chicago, and usually that includes a 30 minute drive to the area we want to be in (Museum of Science and Industry/Shedd Aquarium/Navy Pier).
For Choice Privileges I can stay in a really nice hotel, in the loop for 16,000 points. (Cambria Hotel and Suites on Randolph St.). I can also stay within a 30 minute drive at the Sleep Inn by Midway airport for 12,000 points, or at the Quality Inn by O’Hare for 10,000 points. The best value is staying at the Rodeway Inn in Lyons, IL for 6,000 points, but the reviews there are not very good. Bottom line is that I have several options in the Chicagoland area for Choice hotels that require much lower point redemptions. 30,000 points with Choice can almost get me 2 nights in the Loop, or 3 nights within a half hour drive, as opposed to 1 night within a half hour drive or half a night in the loop.
Likewise, the Clarion Suites Maingate in Orlando is just minutes from Walt Disney World and a suite with 2 queen beds and a Queen fold out sofa is only 8,000 points, compared to a similar suite a bit further away from Hilton, which costs 20,000 points.
So if you can charge $10,000 per year to the Choice card, I think it makes sense to use, provided you use your Hilton Card for the 5X deal on Gas, Grocery, and Restaurants first.
Credit Card Point Hacking Tips And Tricks:
Watch For Special Deals: Over the last several months I have kept an eye on the rewards program pages and most hotel reward programs have specials from time to time. For Hilton Honors, they were offering 2,000 bonus points per night. For a hotel with rooms selling at $100 per night, this was like getting 3X the normal point amount.
IHG is currently offering a bonus program where you get 2,500 bonus points for your first stay and then 3,000 bonus points for every 3 nights you stay. This can add up to a lot if you have a month long job or vacation.
Don’t Let Your Points Expire: Most Hotel programs have their points expire if you go a year without activity. Keep track of when your points are scheduled to expire to make sure you don’t lose your points. If you aren’t ready for a hotel stay, many programs offer a way for you to shop with points for other items. As an example, with IHG you can get a magazine subscription for as little as 1,100 points. This will reset your expiration date to 12 months in the future!
Start With No Fee Cards: No fee yearly cards can still come with decent bonuses and card spend points, like the Hilton Honors Card. If you start with no fee cards, you have nothing to lose, the math always works in your favor. The second reason to start with these cards is your credit score. About 15% of your credit score is determined by the average length of accounts. By opening cards that you intend to keep forever first you are giving yourself a leg up down the road in this category of your credit score.
Don’t Open Too Many Cards At Once: Chase has a rule called the 5/24 rule. Basically if you have applied for 5 cards in the last 24 months you will be automatically denied. You also don’t want to lose track of hitting your minimum spending thresholds for getting your bonus points. If you open several cards at the same time, it may be easy to miss this on one or more cards.
Pay Off Your Balance In Full Every Month: This is probably the most important part of the whole game. If you pay 16% in interest it kind of negates gaining 2% in points….by a lot! Using credit cards for points ONLY makes sense if you never pay a dime in interest. Stay on top of your cards and keep them paid off.
Know The Bonus Rules: Some card issuers, like AMEX will only allow you to get 1 bonus per card once in your lifetime. Other issuers are much more lenient and require a 1 year or 2 year break after geting a card bonus to get the same bonus again.
Don’t Think You Will Get Rich: Credit card points won’t make you rich. They are a supplement to an area of your budget that you would like to save some money on. As such far more time, effort, and planning should be put into increasing your savings rate and managing your investments than into credit card point hacking.
Always Be Learning: There are people who live and breathe credit card rewards programs, I am not one of them. Check out The Points Guy and Million Mile Secrets. Reading some of their articles will certainly give you a leg up when looking to maximize your points.
Keep Track Of Your Cards Using Personal Capital: I love using Personal Capital to track my net worth and to combine all my investment accounts in one place. It also works great for combining all your bank accounts and credit card accounts together. By using Personal Capital I can keep an eye on the balance on all of my accounts without logging in to 3 or 4 different credit card accounts, and best of all, Personal Capital is free .
Overall its a lot of work to figure out what cards do what, what point redemptions are the best to go for, etc, but it is amazing the total amount of value that can be extracted from these programs. It’s especially valuable for me because I do so much travelling for work, so I gain points both from credit cards and from actually travelling using these hotels and airlines. I’m looking forward to having many trips with the kids without having to pay for hotel stays.
Credit Card To Start a Business ?
Is it wise to use Credit card to start a business ? well, getting funds to start business, to be honest it’s not easy! because when you start a new business! mean, nobody want to know your drama as simple as that! so I am not surprise , when warren buffet or Bill gates starting he’s first business many people laugh hard on him! it’s true! and unfortunately it will apply to your business journey!
The point is, starting new business are not easy! but still we felt it’s gonna be our success! (I know how it feel) since nobody give you a fund or capital to start a new business, so basically yeah, I think Credit card COULD BE! a good Idea! although it’s not recommended by many people! doesn’t mean using Credit cards, to start business are bad idea!
Though I have to warn you! before using any credit card to getting a fund for business, you must realize the interest rates, are quite big! and if your business fail, it can make your loss double, or triple! that’s negative side, for using credit card for business!
Though I can give a suggestion, if you want on safe side, here what you should do to avoid double loss, or triple loss, from credit cards!
First, Find best APR or interest rates, that credit card company can offer! the idea is, if your business not success, or fail, you still have time to pay the interest rates! that’s why small APR, will help you for long run! but if you use Credit cards, from best buy or wall mart credit cards! to be honest, I can said, it’s big No no!
actually you can find Low APR credit cards, if you do business with credit union! try find them in your area! join with them and get their credit product! such as, personal loan, auto loans, credit cards loan and etc! Credit union can give you a half APR from averages banks! most of credit cards company have best APR about 14% , meanwhile Credit union have 5%-10% APR , so if you business fails, and your debt are to big to pay off, at least it will need 10 years to double your debt! but if you dealing with commercial credit cards, it will most likely, in the 2-4 year, your debt will be 2 times, than previous! that’s why don’t use commercial credit cards to finance your first business!
To get Credit cards from credit union, for several cases are not easy! since they have so many rules and restriction! that’s why it would be great, if you already do business with them, for many many years! because most of credit cards, can give you much lower APR if you have good credit history! but for new creditor, or maybe bad credit! most likely they will give their standards APR from 10% to 16% APR! but the point is, build your credit score first! for 1 or 2 years at minimum! and then use that history to get decent capital with low APR! and for sure, low APR can help you a lot for long run! and not to mention, if your business having big success, and need more larger capital to smooth your cash flow! for Sure low APR can benefit your business over the long term!
In short using credit cards to start a business are possible! though you need to find right the best finance institution to get lower interest rates (APR), cause low APR mean big help for your business!
The Credit Card Journey: From Applying to Buying
Getting your first credit card is a big step, so it’s important to start your credit card journey on the right foot. Credit cards differ from debit cards. They offer the opportunity to build credit history and earn you rewards. Here are some tips to help make your experience a positive one, from good types of credit cards to apply for to using your card wisely.
In order to choose a card, it helps to know the different types of applications, rewards offerings, fees associated with the card and lastly the tools that can help you manage your account.
Credit card fees vary, so it’s important to evaluate how you’ll use your card and the fees that could be associated with it. For example, if you plan to travel a lot, you’ll want a card that doesn’t charge a foreign transaction fee. These fees should all be clearly documented when you’re applying for your card. There are plenty of credit cards without annual fees or other types of fees.
Different credit card issuers provide different tools to help you manage your credit card. Tools will vary by issuer and should be considered before applying to ensure that you have the tools you need to manage your spending and make your payments on time.
An unsecured, traditional credit card that you can apply for on your own if you have good credit and sufficient income (income requirements vary by credit card issuers). This is the ideal card to apply for and use. However, if you are new to credit, you may not qualify for this type of card just yet. Some credit card issuers offer student credit cards specifically designed for college students who have limited or no credit history that have lower income requirements.
When a traditional card is not an option available to you, a secured credit card can be a great solution to building the good credit you need to ultimately obtain a traditional credit card. A secured credit card requires that you put down a deposit which typically determines your credit limit (for example, a $200 deposit gets you a $200 credit limit). After that, the card works just like a traditional credit card and allows you to build credit.
Some credit cards reward you for using them by giving cash back incentives for everyday purchases.
With some credit cards, you can earn frequent flyer miles or rewards points when you travel or when you spend.
Some credit cards offer reward points that can then be redeemed for a variety of items, including merchandise, gift cards or cash back.
Some credit cards don’t offer any rewards or incentive programs at all.
If an annual fee is a term of your card, you will be charged that fee each year for using the card.
Foreign transaction fees are charged on purchases made in a foreign currency, or on purchases that involve a foreign bank.
Balance transfer fees are charged when you transfer a balance from one account to another.
Late payment fees are charged when you miss paying at least the minimum payment by the payment deadline.
Insufficient funds fees can be charged by both your credit card company and your financial institution.
A flat fee or percentage may be added any time you withdraw cash using your credit card. While a cash advance fee is typically a percentage of the amount withdrawn – the interest rate is usually higher than the standard purchase rate.
A personal finance tool that gives you a fast, easy way to see how you’re really spending on your card—so you can make smart spending choices.
A convenient feature you can opt into that automatically pays your bills ensuring you never miss a payment.
A Paydown Planner tool helps you plan to pay off your entire account balance or just simply make it more manageable.
Receive mobile and e-mail alerts that help remind you when payments are due.
Some issuers provide free Credit Scores on your statements or online. These are based on information from your credit report, and knowing your score can help you can stay on top of your credit and avoid surprises.
Spend management tools help you monitor your spending and make paying off your balance more manageable.
Resource centers provide valuable information to help you learn about credit.
Not sure where to research? The Internet is a great tool to help you explore your options. Check out these sites to research different credit cards:
It’s important to start your credit card journey on the right foot.
Get Cash Back on Gas and Restaurants with Discover it ® Chrome.
After you’ve weighed your options and decided which card best fits your needs, you can start an application. Follow these steps to make the application process easier.
Step 1: Gather the information needed to apply, such as your:
- Social security number
- Current address
- Current employer
- Total annual gross income – the amount of money you earn in a year before taxes
- Length of employment at current job
- Information on any of your bank accounts (checking and savings)
- If you are applying for a student credit card you may need information such as: school name, graduation date, and area of study for school verification
Step 2: Decide how you want to apply. Regulations require that if you are under 21, you must apply in writing (online or paper application), so you cannot apply over the phone.
What do I do when I get my credit card?
After you’ve been approved, the credit card company will issue your credit card to you through the mail. When you receive your card, here’s what you should do.
Step 1: Activate the card. Instructions for activation will be included with your card.
Step 2: Ensure your account information is accurate, including your full name, address and contact information, and review your assigned credit line to know how much you have available to you.
Step 3: Read your Card Agreement and other Terms and Conditions. The Card Agreement explains how your account balance is calculated and what your annual percentage rate, or APR is, so it is important for you to read this information before you start using the card.
Step 4: Sign the back of the card.
Step 5: Sign up for online account management, become familiar with the online tools offered and set your preferences for bill payment reminders, spending alerts and automatic payments.
Step 6: You are ready to use your card at the store. If asked at the counter if your card is debit or credit, select “credit.”
How do I use my card correctly?
Here are some best practices to follow when using your card:
- Keep your card in a safe place.
- Determine when you’d like to use your credit card, such as for gas, groceries, or strictly for special purchases like a vacation.
- Make sure you can afford each purchase before you buy. Credit cards are not a way to live beyond your means.
- Pay off as much of your balance as you can by the payment due date. If you can, try to pay your balance in full to avoid finance charges.
- Always stay well within your credit limit, and don’t spend all the available credit on your credit card.
- Try to avoid cash advances. Cash advances are when you use your credit card like a debit card and withdraw money from your account. Usually, there are fees associated with cash advances, and interest will start to accrue immediately at the cash advance APR.
Legal Disclaimer: This site is for educational purposes and is not a substitute for professional advice. The material on this site is not intended to provide legal, investment, or financial advice and does not indicate the availability of any Discover product or service. It does not guarantee that Discover offers or endorses a product or service. For specific advice about your unique circumstances, you may wish to consult a qualified professional.
Best International Credit Cards With No Foreign Transaction Fee
This page includes analysis of our favorite cards from The Simple Dollar’s advertisers and the marketplace. Visit our advertiser disclosure to learn more.
Smartphones have become a necessity for travel: Not only do they allow us to make calls, but apps like Messenger and FaceTime add a new dimension to staying in touch with loved ones at home. Also, travelers can now combine favorite credit cards with mobile wallets, such as Apple Pay or Android Pay, to be used across the globe. For the savvy traveler, combining credit cards with no foreign transaction fees with their virtual wallet of choice is one of the best ways to ensure safe purchases overseas – all the while avoiding that extra 1-3% surcharge.
We’ve looked at the ever-changing international credit card marketplace and selected the top card in four categories: best all-around, best hotel card, best first-year rewards matching, and best no-annual fee. After you’ve found your perfect fit, click Apply Now, and let the pre-travel excitement begin!
Best international credit cards for 2017
- Chase Sapphire Preferred® Card: Best all-around international credit card
- Starwood Preferred Guest® Credit Card from American Express: Best hotel card with no foreign transaction fee
- Discover it® - Cashback Match™: Best international card with first year rewards matching
- Discover it® Miles: Best no annual fee international credit card
The Simple Dollar’s top international credit cards for 2017
- Best all-around international credit card
Best all-around international credit card
- Earn 50,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $625 toward travel when you redeem through Chase Ultimate Rewards®
- 2X points on travel and dining at restaurants worldwide & 1 point per dollar spent on all other purchases.
- Earn 5,000 bonus points after you add the first authorized user and make a purchase in the first 3 months from account opening
- No foreign transaction fees
- 1:1 point transfer to leading airline and hotel loyalty programs
- Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards. For example, 50,000 points are worth $625 toward travel
- No blackout dates or travel restrictions - as long as there's a seat on the flight, you can book it through Chase Ultimate Rewards
- Issuer: Chase
- Rewards Details: 2X points on travel and dining at restaurants & 1 point per dollar spent on all other purchases worldwide
- Sign Up Bonus: Earn 50,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $625 toward travel when you redeem through Chase Ultimate Rewards®
- Annual Fee: Introductory Annual Fee of $0 the first year, then $95
- Balance Transfer Fee: Either $5 or 5% of the amount of each transfer, whichever is greater.
- Cash Advance APR: 25.99% Variable
- Foreign Transaction Fee: $0
- Introductory APR: N/A
- Introductory APR Period: N/A
- Introductory Balance Transfer APR: N/A
- Introductory Balance Transfer Period: N/A
- Ongoing APR: 16.99% - 23.99% Variable
- Penalty APR: None
Anyone who considers themselves a world traveller should check out the Chase Sapphire Preferred® Card. Combining $0 foreign transaction fees with Visa’s worldwide merchant network, it’s globally accepted and one of the most secure spending options for those abroad. At home and overseas, cardmembers benefit from 2X points on travel and restaurants worldwide with 1x on all other purchases. Whether you’re looking to earn points as quickly as possible, or you want the widest variety of travel redemption offers, this card should be first on your list.
- Cardmembers earn 1x points per $1 spent on most purchases, so use it as often as you can.
- Use it while you’re eating out for 2X points on dining at restaurants worldwide.
- Even use it while you’re travelling for 2X points on travel by air, taxi, or train.
- Use it ASAP: Cardmembers earn 50,000 bonus points after spending $4,000 in purchases within the first three months.
- Travel often. You’ll get 25% more per point when redeeming points for travel through Chase Ultimate Rewards®, including transport and hotel costs.
Chase waives the annual fee for the first year. After that, membership costs $95 a year. If you’re not a frequent patron of restaurants, then you’re likely to miss out on one of the card’s biggest benefits. And if you’re not the travelling type, then you might want to consider a card with more flexible benefits. If that’s you, we recommend the Discover it® Cashback Match™ for unlimited 1.5% cash back on every purchase.
On our list of $0 foreign transaction fee cards, the Chase Sapphire Preferred® Card offers the most generous rewards and the most flexibility for redeeming them. Earning 2X points on travel and restaurants worldwide will especially appeal to frequent international travelers. Add in the perks of redeeming with a 25% points bonus on travel booked through Chase Ultimate Rewards®, and you have even more reason to consider the Chase Sapphire Preferred® Card before your next overseas trip.
Best hotel card with no foreign transaction fee
- Earn 25,000 bonus Starpoints® after you use your new Card to make $3,000 in purchases within the first 3 months.
- Earn 2 Starpoints® for each dollar of eligible purchases spent on the Card at participating SPG® & Marriott Rewards® hotels. Earn 1 Starpoint for all other purchases.
- No Foreign Transaction Fees on International purchases.
- Redeem Starpoints® at over 1,300 participating hotels and resorts in over 100 countries and for flights on more than 150 airlines with SPG flights, all with no blackout dates.
- $0 introductory annual fee for the first year, then $95.
- Terms Apply.
- See Rates & Fees
- Issuer: American Express
- Sign Up Bonus: Earn 25,000 bonus Starpoints® after you use your new Card to make $3,000 in purchases within the first 3 months.
- Annual Fee: See Details
- Balance Transfer Fee: Either $5 or 3% of the amount of each transfer, whichever is greater.
- Cash Advance APR: 26.24%
- Foreign Transaction Fee: None
- Introductory APR: N/A
- Introductory APR Period: N/A
- Introductory Balance Transfer APR: N/A
- Introductory Balance Transfer Period: N/A
- Ongoing APR: 16.24% - 20.24% Variable See Rates & Fees
- Penalty APR: 29.99%
It’s in the name: If you’re a preferred guest of Starwood Hotels & Resorts, or you’d like to be, then the Starwood Preferred Guest® Credit Card from American Express is a fantastic card to have. You might patronize Starwood Hotels more often than you think — Marriott International recently acquired Starwood, forming one of the largest global hotel companies. So if you travel often for business or pleasure, this is a pretty handy card to have.
- Use this card often. Members earn 1 Starpoint® for everyday purchases, redeemable at over 1,300 participating hotels and resorts, located in 100 countries (a number that’s likely to grow).
- You’ll earn 2 Starpoints® for each dollar of purchases made at participating Starwood® and Marriott Rewards® hotels, so use it whenever you travel.
- Earn points while you fly: Members can redeem points for frequent-flyer miles on over 150 airlines.
- Don’t just sign up for the card. If you become a Starwood Preferred Guest (SPG), you’ll gain access to a ton of additional benefits! Use Uber? As an SPG member, you can earn 1 Starpoint® per ever $2 spent with Uber at home, and per every $1 spent while travelling.
Benefits aren’t necessarily flexible. Starpoints® are only redeemable at SPG hotels, and only transfer at a 1:1 ratio for certain airlines. If you’re looking for a wider variety of airline redemption options, consider the Discover it® Miles card.
The loyalty-based rewards of the Starwood Preferred Guest® Credit Card from American Express make it the top hotel card on our list. For cardholders who also favor certain airlines, the ability to transfer Starpoints® to participating frequent flyer programs is another potential benefit. If you make SPG® and Marriott Rewards® properties your home away from home when you travel, you’ll find a lot to like about the Starwood Preferred Guest® Credit Card from American Express.
Best international card with first year rewards matching
- Issuer: Discover
- Rewards Details: 1% cash back on all other purchases. 5% cash back in rotating categories each quarter like gas stations, Amazon.com, restaurants, wholesale clubs and more, up to the quarterly maximum each time you activate.
- Annual Fee: $0
- Balance Transfer Fee: 3%
- Cash Advance APR: 25.99% Variable
- Introductory APR: 0%
- Introductory APR Period: 14 months
- Introductory Balance Transfer APR: 0%
- Introductory Balance Transfer Period: 14 months
- Ongoing APR: 11.99% – 23.99% Variable
Do you like cash? If so, this is the card for you. Discover it® Cashback Match™ card puts money right back in your pocket. It’s the perfect choice for anyone looking to save up for a big vacation with every purchase. And Discover’s rotating categories are perfect for everyday consumers. Cardmembers earn 1% cashback on regular purchases, and 5% cashback on purchases made in rotating categories that change each quarter. With no foreign transaction fees, members will be able to save at home and spend abroad.
- Use this card for everything. From groceries, to movies, to travel, you’ll receive 1% cashback on all purchases.
- Pay close attention to special categories, like Amazon.com, gas stations, restaurants, and wholesale clubs. Categories rotate every quarter, but you’ll earn 5% cashback for every purchase you make on those types of purchases.
- Maximize your rewards during your first year. Discover’s Cashback Match™ program gives members a dollar-for-dollar match of all the rewards they’ve earned after one year of membership.
- Take your time. Rewards never expire.
There’s nothing more flexible than cash, but members only earn 1% back on the majority of their purchases. So if you spend $100, you’ll earn $1 back. In order to fully maximize benefits, cardholders need to pay close attention to the current 5% category, which can sometimes create unnecessary spending. Be careful not to overspend in order to earn more rewards.
Although not strictly a travel rewards card, the $0 foreign transaction fee does make the Discover it® Cashback Match™ useful for shopping overseas or making international purchases online. This card is a good fit for someone who’s planning a special overseas vacation but doesn’t plan on becoming a frequent traveler in need of airline or hotel rewards for future trips. Overall, the signature Cashback Match™ feature, unique to the select Discover cards, makes this card a useful option regardless of your travel frequency.
Best no annual fee international credit card
- Issuer: Discover
- Rewards Details: 1.5 Miles per dollar on all purchases.
- Annual Fee: $0
- Balance Transfer Fee: 3%
- Cash Advance APR: 25.99% Variable
- Introductory APR: 0%
- Introductory APR Period: 14 months
- Introductory Balance Transfer APR: 10.99%
- Introductory Balance Transfer Period: 14 months
- Ongoing APR: 11.99% – 23.99% Variable
If you’re looking to bank travel rewards with no annual fee, then the Discover it® Miles card should be your top pick. Members earn 1.5x Miles per dollar on every purchase, with no annual fee to reduce the rewards they earn. You’ll be able to earn miles simply by buying coffee in the morning. Or shopping. Or traveling. And Discover will double all the miles earned at the end of your first year of membership!
- Each purchase earns 1.5X miles per dollar spent, and there’s no limit. So if you’re trying to save money on expensive airfare, use the card for everyday expenses. They’ll add up.
- Everybody’s got a dream vacation, and with the Discover it® Miles card, you can actually make it happen. Discover will automatically match all miles earned at the end of your first year, seriously reducing transportation costs.
- Don’t worry about when or where you want to travel. Rewards come without blackout dates. You’ll be able to fly any airline, to any location. That’s because rewards are redeemable for a travel statement credit, so you can book however you’d like.
While the Discover it® Miles is one of the most user-friendly miles-based cards on the market today, there’s not a whole lot of wiggle room when it comes to redemption. Members can redeem miles as statement credits towards travel-related purchases: Lodging, train tickets, etc. But miles can’t be transferred towards frequent flyer programs. If transferring miles to airlines is important to you, we recommend the Starwood Preferred Guest® Credit Card from American Express.
If you’re an independent, pay-as-you-go type of traveler who likes flexibility, consider packing the Discover it® Miles for your next trip. You can redeem your rewards for a statement credit towards travel purchases after you get home instead of committing to a particular airline or hotel brand months in advance. At the end of your first year, you can also look forward to Discover matching the rewards you’ve earned mile for mile.
The Simple Dollar’s top picks: summed up
Which international card is the best for me?
I want a card that maximizes my travel rewards, whether I’m traveling in the U.S. or overseas.
I want a hotel card for frequent travelers that also lets me transfer airline points.
I want a travel card that will match my rewards point for point.
We suggest the Discover it® Cashback Match™ for cash back rewards; Or the Discover it® Miles for travel reimbursement credits
I want a travel card that I can transfer rewards to.
I’m not a frequent traveler, but I’m planning a once-in-a-lifetime overseas trip.
I want flexible travel redemption.
I don’t travel that much, but I do make a lot of international purchases online.
I want an international rewards card with no annual fee.
Foreign transaction fees starting to fade
Over the past several years, an industry trend has seen more credit card issuers gradually moving away from foreign transaction fees.
What are foreign transaction fees? Many credit cards charge them for purchases made overseas, usually amounting to 1% to 3% of the total purchase. The fee covers the cost of converting foreign currency to U.S. dollars.
The fee has long been standard, and the majority of credit cards still charge it. In recent years, however, the fee has started to trend downward.
The 2016 Credit Card Fee Survey found that out of 100 widely used credit cards, the number that charge foreign transaction fees had fallen from 77 the previous year to 61. Some of the cards that still charge the fee have opted to reduce it.
As to why more banks and credit card companies have chosen to bear that cost themselves, industry observers have a few theories:
- Financial institutions have grown less reliant on these types of processing and service fees, thanks to the economic recovery from the Great Recession.
- Issuers have learned to process foreign transactions more efficiently.
- It’s a show of goodwill toward customers who are seen as high-value.
Whatever the reason, consumers who no longer have to pay the fee can agree that — unlike a sumptuous meal purchased at a Paris bistro — the memory won’t be a fond one.
Directory of All Card Issuers and their Foreign Transaction Fees
If you’re interested in learning more about cards that don’t charge any type of foreign transaction fee, this directory can help. Listed below are all of the top credit card issuers, the respective foreign transaction fees they charge, and the cards they offer that don’t charge this fee. As you’ll probably notice, Discover and Capital One don’t charge foreign transaction fees on any of their cards.
Have a plan B (and possibly C and D)
Travel can be unpredictable, and something could go wrong with your international credit card. Plan to have one or more backups ready before you leave. The options include:
As with tips 1 through 3 above, contact this card’s issuer beforehand to avoid false-alarm fraud alerts. You should also check to see whether your backup credit card charges a foreign transaction fee, which could range from 1% to 3% on every international purchase.
You can get it from your bank, through an online service or at the airport. Although you’re likely to encounter fees any with any method of exchanging currency, your bank may be the option with the most favorable exchange rate. Keep on-hand cash somewhere discreet, and put the rest in a secure spot, even if you intend to use an international card as your primary source of spending. And plan ahead! The way to get the best exchange rate is to examine your options beforehand, so don’t wait until you’re at the airport.
Contact your bank beforehand to notify them of your trip, check the availability of in-network ATMs at your destination, and ask about fees (which may well be inevitable). If you have to use your ATM card in a pinch, consider withdrawing enough local currency for a day’s worth of purchases rather than using the card for individual transactions. That way, you can minimize the number of times you incur a fee.
Yes, travelers checks still exist. The problem is, a dwindling number of businesses and hotels accept them these days. You would likely have to cash them in at a bank. As a credit card backup, consider travelers checks a last resort.
Foreign transaction fees and dynamic currency conversion fees: What’s the difference?
If you’re putting together finances for an overseas trip, chances are you’ve come across both foreign transaction fees and dynamic currency conversion. And you might have been told that both were necessary to safe spending abroad.
Here’s why that’s not true: foreign transaction fees, or fx fees, are small surcharges (anywhere from 1-3%), that credit card companies tack onto any purchase made outside the cardholder’s home country. If you’re making a purchase abroad and your credit card requires FX fees, you’ll have to pay the surcharge in addition to the cost.
Dynamic currency conversion (DCC) is a point-of-sale currency exchange rate. DCC gives overseas consumers the opportunity to make purchases using their home currency. An American travelling in Europe using DCC would convert the original cost of an item (in Euros), into U.S. dollars when they make a purchase.
DCC rates tend to favor merchants over consumers, and foreign transaction fees are added on top of that.
The good news? You can avoid both fees. By picking an international card with no transaction fees and (politely) declining DCC, you’ll be able to make the most of your savings during your travels.
ATMs abroad: what to watch out for once you’re FX free
Even after you’ve selected a card with zero Foreign Transaction Fees and declined Dynamic Currency Conversion, there’s still a few pitfalls to watch out for.
While you’re abroad, only use ATMs in case of an emergency. According to travel guru Rick Steve, using an out-of-network ATM in Europe places a $2-5 fee on every transaction. And although banks are slashing out-of-network ATM fees, they can still be a drain on your wallet.
Instead, set some cash aside and keep an eye on the exchange rate. Xe.com’s currency converter offers a comprehensive and current guide to any global exchange rate.
Or, research your international network. Your credit card may already grant access to multiple ATMs, no matter where you travel. But be sure to do your homework!
Here’s just a few of the many international ATM locators:
More questions to ask before taking your card overseas
Chip-based credit cards (also known as PIN or EMV cards) are accepted by multiple countries on all seven continents.
It’s better that all your cards are chip-ready. The number of ATMs and vendors that no longer accept magnetic stripe cards is increasing, leading to frustration when travelers discover their cards don’t work when they try to fill up their car, or even buy a plane or train ticket.
Globally, magnetic stripe cards are becoming a thing of the past. The US has adopted more slowly, with Target leading the way towards banning mag stripes in 2015. When traveling abroad, however, be sure that your cards are all chip-ready.
Unfortunately, accidents don’t know a time or place, and when they happen abroad, you want to make sure you’re completely covered. Plenty of international card issuers offer travel insurance for cardmembers, generally falling into four categories: accident insurance, trip cancellation, rental car insurance, and lost luggage.
One piece of fine print to note: To utilize travel insurance, you must have paid for your trip completely with your international credit card.
Did I notify my credit card company?
If you’ve ever told your mom you were planning a trip, you’ve heard this question before. And, like always, she was totally right.
If you don’t notify your card issuer about your travel plans, it’s likely that your card will be declined due to suspicion of fraud, probably at the worst possible time. Letting the company know about your travel plans is easy: Just call the number on the back of the card, and tell the friendly representative on the other line where you’re going, and for how long. That’s it.
However, you do have to notify each issuer about any cards you take with you, even if two of them are from the same bank. Where finance is concerned, credit card companies tend to err on the side of caution, so better safe than sorry.
Pro-tip: Mobile wallets are a globetrotter’s best friend
The mobile wallet is one of the fastest growing financial technologies in the world. Earlier this year, Business Insider released a report predicting that in-store mobile payments in the United States would grow from $75 to $503 billion between 2015 and 2020. That’s a compound annual growth rate (CAGR) of 80%.
Despite the impressive numbers, the U.S. is the slowest global market to adopt mobile wallets. Asia-Pacific leads the charge, with an expected total worth of $165.1 billion in 2020. At 45.9%, the CAGR is smaller than that of the U.S. but builds on existing value. All of which is to say: The future of the mobile wallet is incredibly bright, and if you’re looking to travel outside the U.S., it’s a reliably safe way to spend.
For the uninitiated, mobile wallets are virtual wallets that can carry credit or debit card information on a mobile device. The three big mobile wallets – Android Pay, Apple Pay, and Samsung Pay – empower customers to make quick and secure purchases both digitally via mobile apps, or in-store via Near Field Communication (NFC) technology. So if you’re concerned about identity theft, the loss of your physical card while overseas, or about acceptance in general, you might want to consider adding your card to a mobile wallet before you head to the airport.
Here’s a quick list of major credit card providers and the mobile wallets that accept them:
Note: This list applies to participating providers within the US only. If you’re outside the U.S., be sure to check out your country’s list of participating banks.
But how does all this help travelers? There’s a few ways:
Your card’s benefits remain the same
First off, if you’re on this page then you’re looking for a credit card with a wide, reliable global presence and no foreign transaction fees. Mobile wallets don’t override already existing rewards programs, annual fees, or foreign transaction fee (FTF) rates.
So if you’re a Chase Sapphire Preferred® Card holder, you’ll still be able to earn 2X points on travel and dining across the world, all without swiping a physical card. Because you are utilizing a smartphone, data charges and international fees may apply, so be sure to discuss that with your wireless provider before you leave.
It’s safer than swiping or chipping
Credit card skimming isn’t just a stateside problem, and when you’re visiting a new country, your mind may be so occupied by other things that you miss telltale signs. That’s exactly how it should be: no matter where you travel you should be focused on exploring the culture and making memories with loved ones, not identity theft.
Mobile wallets utilize a two-, sometimes three-step token-based transaction system. When you sign up with a mobile wallet and register your card(s), the information is stored in a vault managed by the service provider (such as Apple, Samsung, or Android).
When you make a purchase, your mobile wallet generates a token – a random 15-16-digit number – instead of utilizing personal information. The number is generated specifically for that transaction, and has nothing to do with your personal credit card number, and it’s useless if stolen.
There are no transaction fees
Neither Android Pay, Apple Pay, or Samsung Pay will charge any transaction fee. And that’s in addition to the already existing 0% foreign transaction fee present on our list of favorite international cards.
If you’re a Discover it® Cashback Match™ cardholder, that means you’ll be able to earn 1% cashback on all purchases, without a FTF or transaction fee eating away at your rewards.
That’s a win-win for everybody.
Exact spending is more helpful than you think
Making cash purchases with an unfamiliar currency can be tricky. You want to be sure that you’ve received the correct amount of change, but that can be anywhere from inconvenient to overwhelming, especially in a new culture. On the other hand, you may have bills that are simply too big for the transaction, that you don’t want to break.
Mobile wallets don’t just empower you to spend instantly, they also empower you to spend only what you need, ensuring that every purchase creates as few headaches as possible.
You still need your physical wallet
Although global acceptance of mobile wallets is expanding at a rapid pace, it’s still a good idea to keep cash and credit cards on your person. Not all merchants accept credit cards, much less digital payments, so it’s important to have plenty of cash on hand. Your wallet can also hold personal information, such as a driver’s license or passport. And of course, if you’re concerned about your phone’s battery life it’s always best to keep physical money handy.
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