Travelling with a credit card

Travelling with a credit card

When you head overseas for a well-deserved holiday, rest and relaxation will be on your mind. Between sleeping in and sampling local delicacies, there’s plenty to look forward to when on holiday.

But don’t forget about the practicalities, such as choosing the right credit card to take with you.

Tap into loyalty schemes – but be wary

Research from Deloitte shows just that 93 percent of consumers will happily share details with airlines and hotels about their travel preferences, while just 32 percent are willing to share information about hobbies and only 28 percent will disclose geo-location details.

“Frequent travellers are often the most valuable customer segment for hotels and airlines,” said Charles Carrington, Deloitte Partner and author of the study.

While it always pays to be careful with your personal information, signing up to credit card-related loyalty schemes could help you snap up travel deals, from accommodation to airfares. Make sure you always read privacy policies before you sign up to schemes, so you know what will happen to your personal information.

Run a credit card comparison

When sorting out your holiday finances, a credit card comparison can go a long way.

There are plenty of factors to bear in mind, from interest rates to annual card fees. When you’re picking a credit card for overseas use, one of your biggest concerns will be the foreign exchange rate for overseas purchases. Using ATMs overseas can also be incredibly costly or almost entirely free, depending on which card you select – so choose carefully.

Some lenders offer travel-specific products, which are certainly worth investigating. If you’re jumping between countries, a travel card with pre-determined exchange rates can give you peace of mind.

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Use your card smartly

Whether you’re on a frugal trip or spending up a storm, there’s no point raking up the dollars on fees you could otherwise avoid.

When choosing a card, opt for one that offers relatively low fees or none at all – but be wary of any trade-offs, such as a higher interest rate, which could sting you when you have to make repayments on your return.

Make sure you’re using your card smartly when you’re overseas. For instance, try and limit your ATM withdrawals — get out cash in bulk and put one-third in your wallet and the remaining two-thirds in a hotel safe. 

Avoid using your credit card when paying for snacks and small gifts — using cash means fewer transaction fees, and it’s often the preferred means of payment in many countries, too.

Take a spare card

It’s always a good idea to prepare for the worst, so make sure you’ve got a spare credit card in case your principal one goes missing or is stolen. 

Always store your back-up card in a different location. For instance, if you keep your main card on yourself or in your carry-on bag, place your spare card in a secure spot in your main luggage.

It’s also a good idea to have a range of different money options with you, just in case a hotel or shop only takes cash and the  local ATM’s is down.

Manage your post holiday credit card debt

A lot of travellers return from epic trip overseas with a bad case of Mondayistis and an even more severe case of credit card blues.  One way to lessen the blow over a number of months is by transferring your debt on to a balance transfer card.  These cards typically offer 0% interest on your credit card bill for a set period of time, which can run up to two years.  Just check for any big fees and charges and formulate an iron-clad plan to pay it off before the deal expires.  Otherwise you’ll be hit with a hefty interest bill.


RateCity’s picks – top credit cards to use overseas

Bankwest’s Zero Platinum MasterCard has no annual fee, no or currency conversion fees, which are typically charged at around 3 per cent, and up to 180 days of travel insurance.

GE Money’s 28 Degrees Platinum MasterCard also has no annual fees or currency conversion fees, however it does have a slightly higher interest rate at 20.99% so make sure you are on top of your repayments.

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Learn more about credit cards

Should I get a credit card?

Once you've compared credit card interest rates and deals and found the right card for you, the actual process of getting a credit card is quite straightforward. You can apply for a credit card online, over the phone or in person at a bank branch. 

What should you do when you lose your credit card?

Losing your credit card is a serious situation, and could land you in financial trouble. Here is a simple guide detailing what to do when you lose your credit card.

Lock you card – Contact your provider and inform them about your lost credit card. From here lock, block or cancel your card.

Keep track of transactions – Look out for unauthorised credit card transactions. Most banks protect against fraudulent transactions.

Address recurring charges – If your card is linked to recurring charges (gym membership, rent, utilities), contact those businesses.

Check credit rate – To ensure you’re not the victim of identity theft, check your credit rating a month or two after you lose your credit card.

Can a pensioner get a credit card?

It is possible to get a credit card as a pensioner. There are some factors to keep in mind, including:

  • Annual income. Look for credit cards with minimum annual income requirements you can meet. 
  • Annual fees. If high fees are a concern for you, opt for a card with a low or $0 annual fee. 
  • Interest rate. Make sure you won’t have any nasty surprises on your credit card bill. Compare cards with a low interest rates to minimise risk.

How do you use credit cards?

A credit card can be an easy way to make purchases online, in person or over the phone. When used properly, a credit card can even help you manage your cash flow. But before applying for a credit card, it’s good to know how they work. A credit card is essentially a personal line of credit which lets you buy things and pay for them later. As a card holder, you’ll be given a credit limit and (potentially) charged interest on the money the bank lends you. At the end of each billing period, the bank will send you a statement which shows your outstanding balance and the minimum amount you need to pay back. If you don’t pay back the full balance amount, the bank will begin charging you interest.

What should you do if your credit card is compromised?

Credit card fraud is a serious problem. If your credit card is compromised and you’re wondering what to do, here are a few precautionary steps to take.

Contact you credit provider – Get in touch will your credit card provider. If you feel your card has been compromised, you should be able to lock or block it.

Monitor your accounts – Keep an eye on your credit card accounts. Any unauthorised transactions could be a sign your credit card has been compromised.

Check your credit rating – It’s also important to check your credit rating, to ensure you’re not a victim of identity theft or some other financial mischief.

How do you use a credit card?

Credit cards are a quick and convenient way to pay for items in store, online or over the phone. You can use a credit card as a cashless way to pay for goods or services, both locally and overseas. You can also use a credit card to make a cash advance, which gives you the flexibility to withdraw cash from your credit card account. Because a credit card uses the bank’s funds instead of your own, you will be charged interest on the money you spend – unless you pay off the entire debt within the interest-free period. If you pay the minimum monthly repayment, you will be charged interest. There are many different credit card options on the market, all offering different interest rates and reward options.

How to get a credit card for the first time

A credit card can be a useful financial tool, provided you understand the risks and can meet repayment obligations.

If you’re a credit card first-timer, review your options. Think about what kind of credit card would suit your lifestyle, and compare providers by fees, perks and repayments.

Once you’ve selected a card, it’s time to apply. Credit card applications can generally be completed in store, online or over the phone.

When you apply for a credit card for the first time, you must meet age, residency and income requirements. As proof, you must also provide documentation such as bank account statements.

What is a balance transfer credit card?

A balance transfer credit card lets you transfer your debt balance from one credit card to another. A balance transfer credit card generally has a 0 per cent interest rate for a set period of time. When you roll your debt balance over to a new credit card, you’ll be able to take advantage of the interest-free period to pay your credit card debt off faster without accruing additional interest charges. If your application is approved, the provider will pay out your old credit card and transfer your debt balance over to the new card. 

How to pay a credit card

There are a few ways to pay a credit card bill. These include:

  • BPAY - allows you to safely make credit card payments online.
  • Direct debits - set up an automatic payment from your bank account to pay your credit card bill each month. You can choose how much you want to pay of your credit card bill when you set up the auto payments.
  • In a branch.
  • Via your credit card provider's app.

How do you apply for a credit card?

You can apply for a credit card online, over the phone or in person at the bank. Once you’ve compared the current credit card offers, the application process is quick and easy. Before you get your application started, you’ll need to gather your personal information like proof of ID, payslips and bank statements, proof of employment and details of your income, assets and liabilities. To be eligible for a credit card, you’ll need to be an Australian citizen over 18 and earn a minimum of $15,000 each year. Once you’ve applied for a credit card, you should get a response fairly instantly. If your credit card application has been approved, you should receive a welcome pack with your new credit card within 10-15 days.

How do you cancel a credit card?

It’s important to cancel your old cards to avoid any additional fees. Unless you’re doing a balance transfer, you’ll need to pay the outstanding balance before you cancel your credit card. If you’ve opted for a card with reward points, make sure you redeem or transfer the points before you close your account. To avoid any bounced payments and save yourself an admin headache, redirect all your direct debits to a new card or account. Once you’ve done all the preparation, call your bank or credit card provider to get the cancellation underway. Once you receive a confirmation letter, destroy your card and make sure the numbers aren’t legible.

Which credit card has the highest annual percentage rate?

The credit card market changes all the time, so the credit card with the highest annual percentage rate is also liable to change.

Keep in mind that credit card interest rates are expressed as a yearly rate, or annual percentage rate (APR). A low APR is generally good but also consider:

  • There can be different APR's for each feature of the card (e.g. purchases may have an APR of 14 per cent, while cash advances on same card could have an APR of 17 per cent.
  • Credit cards with a variable rate can change throughout the year, affecting your APR, so check the full details.
  • If you pay your balance in full every month, having the lowest APR is not as important as the other fees associated with the card. However, if you carry a balance from month to month, then you want the lowest APR possible.

How easy is it to get a credit card?

For most Australians, there are no great barriers to applying for and getting approved for a credit card. Here are some points that a lender will consider when assessing your credit card application.

Credit score: A bad credit score is not the be all and end all of your application, but it may stop you being approved for a higher credit limit. If your credit score is less than perfect, apply for the credit limit that you need, rather than the one you want.

Annual income: Most credit cards have minimum annual income requirements. Make sure you’re applying for a card where you meet the minimum.

Age & residency: You need to be at least 18 years old to apply for a credit card in Australia, and most require that you are an Australian citizen or permanent resident. However, there are some credit cards available to temporary residents.

How to make a credit card online

If you’re wondering about how to make a credit card online application, here are some steps to follow:

  • Test the market. Many credit card options are available online. Compare providers by fees, interest and perks to ensure you’re getting the best deal.
  • Complete the application. Once you’ve selected a card, head to the provider’s website and complete the online credit card application form. Forms vary by providers.
  • Provide details. Most cards require you to meet age, residency, income and credit status condition, and you need to provide details like a bank account statement to prove this.
  • Review details. Ensure the information you’ve entered is correct.