Which Credit Card For Overseas Everyday Spend?


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There are increasingly more and more credit cards that don’t charge foreign transaction fees when you use them abroad and that’s a trend that has been very good for those of us who like to travel.

I have a whole arsenal of cards I can use when traveling outside of the US ranging from the high-end Chase Sapphire Reserve credit card through to the no-fee Hilton Honors Card from American Express but they all have one thing in common – they all earn me no more than 1.5 cents/dollar when I’m not spending in one of the popular bonus categories.

Here’s what some popular credit cards (which don’t charge foreign transaction fees) offer for non-bonused spending:

  • Chase Sapphire Reserve card – 1 point/dollar (my value = 1.5 cents)
  • Chase Sapphire Preferred card – 1 point/dollar (my value = 1.5 cents)
  • Platinum card from American Express – 1 point/dollar (my value = 1.5 cents)
  • All Hilton Honors cards from AMEX – 3 points/dollar (my value = 1.2 cents)
  • Platinum Delta SkyMiles card from Amex – 1 mile/dollar (my value = 1.0 cents)
  • Starwood Preferred Guest card from Amex – 2 point/dollar (my value = 1.4 cents)*
  • Citi AAdvantage Credit Cards – 1 mile/dollar (my value = 1.25 cents)
  • Citi ThankYou Premier card – 1 point/dollar (my value = 1.5 cents)
  • Citi ThankYou Prestige card -1 point/dollar (my value = 1.5 cents)

*Effective from 1 August 2018

The list above isn’t exhaustive but should give you an idea of what some of the more popular cards offer.

The fact is that, when I’m traveling abroad, I don’t just eat out and book travel (the two primary bonus categories a lot of cards offer) – I buy groceries, I shop, and I do a whole host of other things which only earn me the very minimum number of points/miles my cards offer….and that’s not great….I’m always looking to earn as much as possible when using my cards.

Fortunately there is a card that may offer something better – the Capital One Venture Rewards Credit Card (link)

Capital One Venture Rewards Credit Card

In brief:

  • The card doesn’t charge foreign transaction fees
  • The $95 annual fee is waived in the first year
  • You earn:
    • 2 miles/dollar on all purchases with no cap (value = 2.0 cents)
    • 10 miles/dollar on all bookings made through Hotels.com (value = 5.0 cents)

1 mile is worth 1.0 cent towards all flight and hotel bookings made through the Venture Rewards portal and, while that may not make the currency particularly flashy, it does make it remarkably easy to use.

To redeem your miles you simply sign in to your online Venture Rewards account and do one of two things:

  1. Redeem miles as statement credits
  2. Book new travel

Statement Credits

You can redeem miles (at a rate of 1 cent each) as a statement credit offsetting any eligible travel purchases made through the Capital One Venture Rewards card in the preceding 90 days.

The definition of eligible travel covers airfares, hotel bookings, AirBnB, taxis/Uber/Lyft and more.

Book New Travel

You can use the Capital One travel portal to book flights and hotels just like you would with any other travel portal. If you don’t have enough miles for your booking you can use a credit card to make up any difference.

What I Really Like

One of the best things about using a reward currency directly for airfare and hotel bookings is that you don’t have to face blackout dates and you don’t have to find award flights – you are simply booking a regular flight or room and using your miles/points as your currency of choice (rather than cash).

This also means that you’ll earn miles/points/status credits on all the fights you book (not the case when you book award flights with airline miles) and you’ll earn hotel points for all the stays you book too.

Chase’s Ultimate Rewards Points, Citi’s ThankYou points and Amex’s Membership Rewards can be used in the same way but, to the best of my knowledge, those card issuers don’t offers a credit card offering an effective rebate of 2.0 cents/dollar while also not charging foreign transaction fees.

That’s what makes the Capital One Venture Rewards Credit Card quite interesting.

Thoughts

The only drawback I see to this card is that, after the first year, it will cost $95 to hold – that’s quite a lot for a card that may only get used for non-bonused spend outside of the US.

Capital One has been known to offer to waive their annual fee in some instances but you shouldn’t rely on this when deciding whether or not to get the card – different people will have different experiences with the card issuer.

The big positives here are that you’re guaranteed a 2% rebate on all non-bonused transactions you make (home or abroad) and that the rebate is very easy to use.

If this post wasn’t focusing on overseas non-bonused spend then cards like the Citi Double Cash card (link), Chase Freedom Unlimited (link) and various cashback cards would come into play….but they charge foreign transaction fees so they’re not much use in this instance.

Personally I think I’m going to get the Capital One Venture Rewards Credit Card for at least a year (it’s free so why not?) and see just how much use I get out of it. If after a year my spending patterns are such that it’s worth paying the annual fee then I’ll go ahead and keep the card, otherwise I’ll cancel it (or downgrade it) and move on.

Featured image courtesy of Wiki Commons