- 1 What is the best first credit card?
- 2 Which is the best travel credit card?
- 2.1 What's the best credit card to use abroad?
- 2.2 Will I get charged for using these credit cards abroad?
- 2.3 Will I get charged for withdrawing cash abroad?
- 2.4 Should I book my flight using a credit card?
- 2.4.1 Get wise on more money-saving matters, with these articles:
- 2.4.2 Travel money tips: how to save on your holidays
- 2.4.3 How to bag a great late deal on your flights
- 2.4.4 How to find the cheapest fares across the month
- 2.4.5 Flybe's luggage rules explained and how to maximise your cabin baggage allowance
- 2.4.6 Beat airline baggage charges: the best in wearable luggage reviewed
- 2.4.7 Wizz Air luggage rules explained and how to maximise your cabin baggage allowance
- 3 What Are The Easiest Credit Cards To Get?
- 4 How to Pick the Best Credit Cards for Travel and Use Your Points Wisely
What is the best first credit card?
While there are plenty of great credit cards on the market, not all of them are accessible to the person getting a credit card for the first time. Whether you are a recent graduate, new to the country, or just haven’t been interested in getting a credit card before, your lack of a credit history may limit your options. (If you are still in college, see our student credit card section for first time credit users.)
If you get any of these starter credit cards, we would suggest you use them for a year, make all of your payments on time, and then apply for a better card with the rewards or interest rate you really want.
That said, here are our choices for the best credit cards for those getting credit for the first time:
- Credit One Bank® Unsecured Visa® for Rebuilding Credit – See if you Pre-Qualify without harming your credit score. 1% cash back on eligible purchases, terms apply. No deposit requirements and opportunities to build your credit. ++
- Capital One Platinum MasterCard – There is nothing exciting about this card, including its very high 24.99% interest rate. But it has no annual fee, and that high interest rate means it is more likely to accept first time credit card applicants.
- Store Credit Cards – Credit cards tied to department stores or smaller retailers are often easier to get for the first time credit card user. They usually have high interest rates over 20%, but if you always pay off your balances in full each month, they are one of the best ways to start as a credit card user. We’d suggest going for a card from a larger retailer for the first time, because you will at least be able to get wider use out of it, even if you are restricted to a single chain. (Many stores offer a Visa or MasterCard option, but might also choose to give the first-timer a card accepted only at that retailer.) Ideas to try: the Walmart credit card, the Best Buy credit card, the Gap/Old Navy/Banana Republic credit card.
- Secured Credit Cards – Unlike the cards above, a secured credit card forces the first time credit card user to put down a deposit in order to get the card (much in the way you’d put down a security deposit on an apartment). You then get a credit line equal to the amount of your deposit. You pay your bills each month like any other credit card, and if you always pay on time, these cards help you build a good credit history and hopefully are the first step toward getting a regular, unsecured credit card. (Note that these cards may have a small annual fee, but you do get your security deposit back when you no longer want the card, provided you’ve paid all your debt.) A bonus: many secured cards come from major banks that say they’ll consider you for a standard credit card after a year or so — in particular, check out the Bank of America Secured Card, the First National Bank of Omaha Secured Visa, and the Discover It Secured Card.
++ Indicates that this site receives compensation when you are approved for this card.
Credit One Bank® Platinum Visa® for Building Credit - See if you Pre-Qualify without harming your credit score. +This fully unsecured credit card with no deposit requirement can be helpful in growing or building credit. Your account activity will be reported monthly to all three major credit bureaus. +All the features you want in a credit card are included. Get 1% cash back on eligible purchases, take advantage of free online credit score tracking, and enjoy credit line increase opportunities. Terms apply.
Which is the best travel credit card?
You've booked your flights, reserved a hotel, but how are you planning to pay for all those other expenses once you get there? If you're opting for plastic then you'll need to read this. We've got all the info on the best travel credit cards to take on holiday, including which ones won't charge you for overseas transactions, plus tips on how to protect yourself from fraud and cash withdrawal fees.
What's the best credit card to use abroad?
Here are five top-rated travel credit cards, as of 2017, including no foreign transaction fee credit cards, and added benefits like cashback.
Barclaycard Platinum travel credit card
An overseas credit card with no fees for foreign transactions, the Barclaycard doesn't even charge you for withdrawing cash, provided you pay off your full balance at the end of the month. However, this is a limited-time offer - until August 2018 - after which you'll get charged if you're still using the card abroad.
This simple, user-friendly credit card offers permanent, fee-free cash withdrawals and no fees on foreign purchases. There's also a 24-hour online banking service, so if you pay your bill off as you go, you'll only get charged minimal interest on taking cash out abroad.
You can only apply for this card if you're already a Nationwide customer, but it has some tempting starting offers that might make it worthwhile if you're about to travel. The first 26 months comes with 0% on balance transfers, for the first 15 months you get 0% on purchases, and there's no annual or foreign purchase fees, full stop.
The Zero card has a few perks up its sleeve, in that you can claim up to 5 cashback offers of 25% at selected retailers. This is another credit card with no foreign transaction fees, though you may have to watch the interest on cash withdrawals, as it's charged at 29.9% until you pay it off.
Halifax are consistently well-reviewed in terms of credit cards you can use internationally, and the Clarity card comes without foreign transaction fees as standard. The interest rate for withdrawals is a little higher than some other cards, but you'll only be charged until you've cleared your bill.
Now you've picked the right credit card, but what are the benefits and how can you avoid paying overseas transaction fees?
Fraud protection is a big advantage to using a credit card abroad, rather than cash. Cards are monitored by the credit company, meaning they can report unusual activity if they suspect someone's stolen your card, or even block it (always let them know if you're going on holiday and where, in case they think your card is being used by someone else!) If you do lose the card, you should be able to get a replacement card pretty quickly, depending on where you are in the world.
When you use a credit card on holiday, you are usually protected under Section 75 of the Consumer Credit Act when you buy anything costing between £100 and £30,000*. This means that the credit card company is responsible for returning all or part of your funds if something falls through from the retailer's side, or it turns out that someone has being using your card fraudulently. You're on holiday - let someone else do the worrying for you.
Will I get charged for using these credit cards abroad?
Sorry to be the bearers of bad news, but yes, potentially. Some of the credit card companies listed above may charge the following fees:
This is the charge that your credit card company will add to your bill if you use your card abroad. Usually it is 2.75% so a £200 purchase will actually cost you £205.50 instead. Never fear, there are credit cards with no foreign transaction fees out there (see our list above).
This little beauty refers to whether or not your payment is in sterling or local currency. If, when presented with your bill, you choose to pay in sterling, then you could be charged a conversion rate by the restaurant or retailer (instead of the transaction fee) which is significantly higher than that which your bank would offer.
Will I get charged for withdrawing cash abroad?
Avoid this one if possible. Credit card companies will charge you between 2.5% and 3% for this with a minimum withdrawal fee of £2.50 to £3. Then, to add insult to injury, cash is usually charged at a higher rate of interest than standard purchases and begins as soon as it comes out of the ATM. Lastly, their final pound of flesh is taken if the card company operates a payment hierarchy system meaning that some providers leave payment of cash withdrawals till last so you will be paying interest for longer. Again, some specialist overseas credit cards, like the ones we've listed below, don't incur fees and only charge (a fairly low rate of) interest until you've paid your bill off.
Should I book my flight using a credit card?
Airlines can charge as much as 3.75% if you book your flights using a credit card. Recently, a few well-known names like Jet2 and Monarch have dropped their credit card fees but the majority of long-haul and budget airlines, including BA, Flybe, Ryanair and Emirates, still charge you extra to pay with a credit card. It certainly pays to check, considering you could be paying up to £10 more per person on a return flight. Generally-speaking, you won't get charged for using a debit card, though there are sometimes 'admin fees' to watch out for.
Get wise on more money-saving matters, with these articles:
Travel money tips: how to save on your holidays
Why pay more than you need to on travel? Cut costs and travel cheaper with Skyscanner’s 20 top tips for slashing the price of your holiday.
How to bag a great late deal on your flights
Here's some tried and tested tips on finding last minute flight bargains.
How to find the cheapest fares across the month
Want to find the very best flight prices? If you’re flexible on when you fly, use Skyscanner’s 'whole month' search tool to find the cheapest day to travel to your chosen destination.
*Published March 2017. Any prices, interest rates and benefits are correct only at the time of writing and are subject to change and/or availability.
Skyscanner is the world’s travel search engine, helping your money go further on flights, hotels and car hire.
We've rounded up some of the best January flight sales all in one place so you can compare and find .
Flybe's luggage rules explained and how to maximise your cabin baggage allowance
Flying with Flybe? We've covered what you need to know about sizes and weight. Plus 8 essential tips .
Beat airline baggage charges: the best in wearable luggage reviewed
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Wizz Air luggage rules explained and how to maximise your cabin baggage allowance
Avoid unexpected baggage fees at the airport with our guide to Wizz Air's luggage allowances plus es .
What Are The Easiest Credit Cards To Get?
One of the more common questions we get on this blog is “what’s the easiest credit card to get and why?“. Rather than answering the same question over and over again via e-mail, let’s answer it here instead.
It’s a pretty simple question, with a pretty simple answer. It depends. Some people want to know the answer to this question because they have bad credit that they want to improve and others ask because they don’t have a credit history at all. I’m going to break the answer down into two different answers and address these two subsets of people separately to make things simple. Before we do this, a simple disclaimer:
Don’t put any charges on your credit card unless you can pay them in full. Credit card issuers charge a very high APY and it’s very easy to fall into a cycle of debt that you can’t get under from. If you need a personal loan, speak to your local credit union instead.
If you have really bad credit then it can be extremely difficult to get approved for any cards as card issuers don’t want to extend you any credit due to the associated risk. It’s important to understand how big this risk is for card issuers, somebody with a FICO score of 800-850 has an average delinquency rate (late payment or no payment made at all) of 1% where somebody with a score of 600-649 has an average delinquency rate of 31%. If somebody had a 31% chance of paying you late, or not paying you at all would you loan them money? Likely not. There are still options for people with bad credit, let’s have a look at those.
Store credit cards are a great option, there is something known as the shopping cart trick. This lets you apply for certain store credit cards (mostly cards issued by Comenity) without a hard pull being done on your credit report, because they aren’t checking your report they don’t know how bad your credit is. The downside to this solution is that these store cards typically have low credit limits and don’t offer very attractive interest rates or rewards programs. They can still be a useful way to show other card issuers that you can handle credit cards responsibly and pay those cards back on time.
As we mentioned before, the reason card issuers don’t want to issue credit cards to those with bad credit is because they don’t want the risk associated with it. When you get a secured credit card, you’re required to put down a security deposit that is equal to the credit limit. This eliminates that risk for them (because if you don’t repay your credit card, they are holding what you owe in cash). The downside to secured credit cards is that they often have application fees, annual fees, high APY’s and no rewards program. You’d think that this wouldn’t be the case since there is little risk to the card issuer, but some seem to take advantage of the fact people with bad credit have little choice. Thankfully this isn’t the case with all secured cards, there are some good ones out there including the Discover it Secured card (no annual fee, no application fee and a good rewards program).
The situation is a bit different if you don’t have any credit history at all, card issuers simply don’t know how likely you are to repay your debts. Most credit card issuers offer a starter credit card for people with no credit history (or thin credit files). That said, some issuers are more lenient than others. Here are some things I’ve learned from anecdotal evidence (please provide your own in the comments).
- Chase wants you to have credit history with at least two credit cards before applying (although they should still be on your radar after you do have two active accounts due to the 5/24 rule). It might be possible to be approved if you put $10,000 in funds into a Chase checking & savings account (if you do this, make sure you use a Chase coupon to get a sign up bonus)
- Citi will approve customers with thin files
- Discover will approve customers with thin files
If you have any data points on other card issuers, please let me know in the comments below. If you’re just starting off on your credit adventure, I’d recommend tracking your credit (lots of places will give you a free FICO score and there are two credit monitoring sites that will monitor all three of your reports for free)
There are lots of options when it comes to credit cards that are easy to get, the best option will depend on your individual circumstances. If there is interest, we’ll also add options for people with bankruptcies on file. If you have anything to add, please do so in the comments below.
How to Pick the Best Credit Cards for Travel and Use Your Points Wisely
Some of the links in this post are from our sponsors. We’re letting you know because it’s what Honest Abe would do. After all, he is on our favorite coin.
My wife and I spent the first night of our recent road trip at a Courtyard hotel in Athens, Georgia. We walked downtown to eat Indian food and had drinks on the roof of the Georgia Theatre. Our room was clean, the pool area was nice and the hotel had a bar. Our cost: $0.
After a couple days exploring Greenville, South Carolina and waterfalls in North Carolina, we arrived in Savannah, Georgia for our last night. We had a suite at the Andaz downtown, across the street from the waterfront. We were handed free glasses of wine at check-in, and the room was stocked with free snacks, juice and soda.
From our balcony we watched kids playing in the fountains in the plaza below, as horse taxis passed in the street. The living room had a huge television and the bedroom a smaller one. The bathroom had a deep tub, separate shower and two sinks. Robes and slippers were provided, and there was an outdoor pool on the second floor. Our cost: $0.
Want to get deals like these? Then it’s time to learn how to find the best travel credit cards and how to get the most from them.
My new Marriott Rewards Visa came with a free night at one of a dozen hotel brands owned by Marriot — up to category four. That’s what I used for the Courtyard by Marriott in Athens.
The promotion also offers 50,000 bonus points if you spend $1,000 on the card within three months. I paid our home insurance and a few bills to meet that requirement. We can get up to seven more free nights with our points, but we’ll get about three nights at category three hotels — the level we typically choose (15,000 points each).
In total, we’ll get four free nights at hotels that normally cost more than $100 per night, just for paying some bills with a credit card — that’s not bad. The Marriott Rewards card is one of the best hotel cards. The fee is $85 per year, but there is no fee the first year, which brings us to the question…
To avoid the fee for the Marriott Rewards card, I might just use up the points and cancel the card. However, you do get an “Anniversary Free Night” every year when you pay the fee. Since we normally stay in hotels that cost around $85 per night even when we pay, it might make sense to keep the card.
Consider the Hyatt Credit Card, which is what we used for our stay at the Andaz in Savannah (a brand owned by Hyatt). Spend $1,000 on the card within three months and you get two free nights at any Hyatt in any category, anywhere in the world. That’s a great start, but you’ll have a $75 annual fee after the first year.
Every year, you get a free night at a category one to four hotel. We used a free anniversary night to stay at the Hyatt Regency in Lake Tahoe, and it was one of the nicest places we’ve ever stayed (sadly upgraded to a category five now). At the time, the best price online was $239 per night, so the $75 annual fee on the card was worth paying. And we got the second night with our points.
Some of the best travel credit cards have no annual fee and offer 1.5 points per dollar spent — the equivalent of 1.5 cents in the form of travel credits. Spend $10,000 annually on a card like that, and you’ll save about $150 (in rebates toward your balance).
But there are hefty bonuses too. For example, with the Barclaycard Arrival™ World MasterCard®, if you make $3,000 in purchases in the first 90 days, you can get a $500 statement credit.
Of course, it can be difficult to put $3,000 on a card in three months, so I prefer lower spending requirements. I recently finished putting $1,000 on my VentureOne Rewards Card, which got me a $200 credit toward flights, hotels, or other travel expenses.
What happens to your credit score when you open and close credit card accounts to get travel bonuses? BankRate says it’s never hurt by having too much credit. But canceling cards can hurt your rating a little, especially when you close old accounts.
On the other hand, my score went up when I started opening and closing accounts regularly. I believe it’s because all the new credit lines I’ve opened lowered my credit utilization ratio, which overcame any effect of closing accounts. I explained this trick for raising your credit score in a previous post.
It may help to learn how to cancel credit cards without damaging your credit score. For example, you might want to put a couple months between new account applications (probably necessary anyhow, to meet spending requirements on each card). That can reduce the likelihood of any ding to your score from frequent credit inquiries.
In addition to bonuses, you also accumulate points as you use your travel cards, but not always at the same ratio.
For example, the Hyatt Credit Card gives you a point for every dollar of normal purchases, but three points per dollar spent at Hyatt properties. The Marriott Rewards Visa offers five points per dollar spent at their properties. Clearly, it makes sense to use the hotel card if you get a meal or drinks at the hotel.
Some issuers offer other reasons to use their cards. For example, the VentureOne Rewards Card says you’ll get “complimentary upgrades and special savings at hotels, resorts and spas,” so you might want to book a hotel room using that card.
Many travel cards offer extra lost luggage protection if you book the flight with that card. Read the benefits guide that comes with your cards and take a few notes as to which card is best for each purpose.
Finally, if you have no other compelling reason to use one card over another, see which one offers the most points for your particular travel purchases. For example, some offer double or triple points when you use them to pay for car rentals, flights or hotels.
On the same trip, I might use my Hyatt card while at the Hyatt to get triple points, a second card for restaurants and my American Express business card for fill-ups, because I get triple points for gasoline purchases.
You points or miles have different values in different circumstances.
For example, it will cost you 25,000 miles from your Delta SkyMiles Credit Card to pay for a $99 flight. But if the flight costs more than $200, you can use just 10,000 miles to get $100 off the price. So you wouldn’t want to use your miles for short cheap flights if you’ll ever be taking more expensive flights.
Also, if you travel often, you might want to pay cash for hotel rooms in inexpensive cities rather than using points, so you can save your free hotel nights for otherwise expensive stays.
And by the way, a category four Marriott or Hyatt might cost twice as much in one place as another. The categories do not have a direct relation to the normal room rates.
More Tricks to Get the Most From Your Travel Cards
We complained about garbage near the hot tub at the Hyatt in Coral Gables, Florida, and the desk clerk apologized and put 6,000 points on our card — almost enough for another free night. So if there’s something wrong, speak up!
Here are a few more tips for getting the most from your travel cards.
You may have various redemption options, and you need to carefully weigh each one.
For example, the Chase Sapphire Preferred card would give you $400 cash back for 40,000 points, but if you book through Chase Ultimate Rewards, you can get a $500 credit toward a plane ticket with those same points.
Compare Cash Prices of Redemption Options
If you have more than one way to redeem your points, look at the cash cost of each option.
For example, the Starwood Preferred Guest card from American Express lets you redeem for airline flights or hotel rooms. If you need a flight and a place to stay and you have enough points for one or the other, check the current cash prices to see which one costs more, and use the points for that.
The value of redemption options also depends on what things are worth to you, and what your plans are.
For example, you can redeem 30,000 Marriott Rewards points for two nights at a category three hotel or for a $100 gift card from various retailers. If you shop at one of them regularly, that card is the same as cash.
So if you have no plans to travel to places with Marriott hotels, or you normally stay at $29 hotels (yikes), then that gift card might be the better option.
If you plan to use your bonuses and points and then cancel the card, you need to track them carefully to get maximum value. You wouldn’t want to cancel and lose 7,000 points when you could have paid a few bills with the card to reach the 7,500 points needed for another free hotel night before canceling.
Is Collecting Points Worth the Trouble?
Yes, I spend some time applying for credit cards and tracking expenditures and points. But not too much time. I made more than $1,000 last year chasing credit card bonuses. And by the way, credit card bonuses are not taxable as income if you need to meet spending requirements to get them.
This year, I’ll take in cash and equivalents of at least $1,500. From travel cards alone, I received more than $600 in cash and free hotel rooms by June. So, yes, for me, it’s worth taking a little time to find and use good travel credit cards.
Want to learn more about the best travel credit cards? Join the Travel Hacking Cartel, a community of expert travel hackers.
Your Turn: Do you have good travel credit cards, and how much value have you received from them so far?
Advertiser Disclosure: Many of the credit card offers that appear on this site are from credit card companies from which The Penny Hoarder receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). We do not feature all available credit card offers or all credit card issuers.
Steve Gillman is the author of “101 Weird Ways to Make Money” and creator of EveryWayToMakeMoney.com. He’s been a repo-man, walking stick carver, search engine evaluator, house flipper, tram driver, process server, mock juror, and roulette croupier, but of more than 100 ways he has made money, writing is his favorite (so far).
Some of the links in this post are from our sponsors. We’re letting you know because it’s what Honest Abe would do. After all, he is on our favorite coin.