A TRAVEL GUIDE TO CREDIT CARDS

There’s nothing like travel to broaden the mind, experience new cultures, enjoy adventure and, on a less positive note, potentially rack up expensive debts if you’ve not planned in advance.

Sadly, the spontaneous break option, so loved by our American literary heroes who always seemed to be escaping off on motorbikes to see the world, can nowadays become highly expensive without planning or savings.

Many cheaper holiday and travel packages attract early bird booking discounts or incentives, as they allow travel agents and holiday providers to plan their bookings in advance and get a view of demand.

Last minute flights, hotels and attractions can be arranged at good prices, but a little more care and pre-planning is required to avoid paying rack-rates and ‘at the counter’ regular prices.

Assuming your savings are in place for such exciting options as a trip, or perhaps you are lucky enough to be heading away with work, then the question arises on how to organise your finances whilst away.

When abroad, credit cards can be popular options as they offer some protection over other forms of spending. Firstly, they don’t require you to carry around large sums of money, which can be unsafe.

Secondly, they generally come with additional consumer and identity protection, for example where purchases become lost or stolen. Check your card terms and conditions to see if you have such insurance.

Credit cards offer different incentives to overseas travelers. For example, some cards allow you to build airmiles. Simply buy your monthly goods using the card (pay off in full where possible to avoid attracting interest on balances) and accrue airmiles.

These can then be redeemed to part or fully pay for a flight for your next trip and they are available for several large airlines. These are useful for those who travel a lot.

For those more inclined to save on credit fees and avoid commission and currency transfer costs, there are overseas credit cards, designed to avoid these types of fees.

These are particularly useful if you are planning to stay in one foreign country for some time. Note that if you are planning to reside in another country, it’s worth setting up a local bank account or an international currency account to further reduce administrative costs.

Other credit cards offer incentives such as zero percent purchasing periods. These are useful if you have the money available to pay off the credit balance when you return home, but want the security and consumer protection of using a credit card rather than cash.

It is also sometimes possible to get additional incentives when ordering credit cards. Look online at cash back sites, to see where you can earn a reward for taking a particular credit card.

As with all financial products, avoid being swayed by gimmicks and incentives and focus on the fundamentals such as cheap credit, a steady offer and the right option for your circumstances.

Seek advice where you can and arm yourself with knowledge before travelling – and spending – abroad. Time spent pre-planning is far less of a bind, compared to attempting to sort financial difficulties such as fraud and theft, whilst abroad.

This is a guest post written by Money Supermarket, a UK based comparison site.