Used wisely, the best travel rewards credit card can pay off in perks that go beyond convenience and bonus miles.
Credit cards provide a lot of value through initial rewards bonuses and zero percent financing deals, but they also offer zero-dollar fraud liability guarantees, the lowest possible currency conversion rates and even car rental insurance coverage, said Jill Gonzalez, an analyst with CardHub.com, a credit card information website.
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USE YOUR CREDIT CARD TO GET BETTER EXCHANGE RATES
If youre traveling internationally and are worried about exchange rates and fees for changing money, a travel credit card might be your best bet, said Gonzalez.
Using a no-foreign-transaction-fee credit card or a no-foreign-fee debit card is the least expensive way to convert currency, saving international travelers 10.84 percent relative to Travelex (a currency services firm) and 6.41 percent compared to banks and credit unions, she said, citing the results of a 2016 WalletHub study.
International travelers should also always pay in the native currency, Gonzalez added. Foreign merchants sometimes offer to convert prices into U.S. dollars in order to charge a high conversion rate, she warned.
APPLY FOR A NEW REWARDS CREDIT CARD MONTHS IN ADVANCE
If you have good-to-excellent credit, you could nab tens of thousands of reward miles by signing up for a new rewards credit card. The trick is to make sure you apply and get the card in time to earn the rewards. Many of these bonuses kick in after three or so months and after you spend a certain amount.
For instance, the Chase Sapphire Preferred Card gives new cardholders a 50,000-mile bonus, but only after they spend $4,000 in the first three months. You can earn another 5,000 points if you add an authorized user and make a purchase in the first three months.
Other cards have similar rewards, so do your research to find the best fit for your wallet.
GO ON VACATION AND PAY ZERO INTEREST
Traveling is expensive enough without adding credit card interest to your bill. So, if you have good-to-excellent credit, check out deals for introductory zero percent interest rates. Many cards offer these, and some have rather long introductory periods, said Bethy Hardeman, chief consumer advocate at Credit Karma, a credit advice site.
She pointed to the Citi Simplicity Card as an example. Citi currently offers one of the longest zero percent introductory (annual percentage rate) periods on balance transfers and purchases at 21 months, she said.
There are other cards with similar offers. Hardeman said if you do choose to accept a zero percent offer and get a new card before your trip, make sure the card also offers other travel-friendly benefits, such as no foreign transaction fees and car rental insurance. And, perhaps most importantly, she said, make sure you pay off your balance before the introductory rate ends to ensure your savings.
USE YOUR TRAVEL REWARDS CARD TO GET FREE HOTEL STAYS
Those reward miles you rack up could be good for more than just flying to your destination. Many travel credit cards allow miles to be used for free hotel rooms, said Lee Huffman, a travel expert and founder of the travel and financial advice site BaldThoughts.com.
He added that if your favorite card doesnt allow this, or if you have a favorite hotel that offers a credit card, it could be worth signing up for it.
Youll often receive an automatic upgrade to a mid-tier loyalty status, which comes with perks, and youll rack up points much quicker when using the card to pay for your room, said Huffman. Some cards even give you free nights when you pay the annual fee or spend a certain amount on the card, he added.