Credit Cards and Travel

This is a huge topic, and this post will only scratch the surface of some considerations with regard to credit cards and travel. One of the most important things to remember is to notify your credit card company when you plan to travel. If you don't, you could encounter the unpleasantness of having your card denied when you need it most.

Also, if you are on an extended trip be sure to check credit card charges carefully. People I know and I myself have encountered fraudulent charges during a trip, so it is best to have online access to your credit card bills.

Another no brainer with regard to saving money on credit cards--pay off the balance in full every month. The easiest way to arrange this is to have the money deducted from a bank account.

On the subject of premium (fee charging) credit cards, the jury is still out. It depends on your individual situation. I found my Gold Visa card issued by the Royal Bank of Canada (www.rbc.com) was worth its price when I was taking a lot of short trips, because it provided out-of-country medical insurance for about a month, provided you charged the trip or the flight to that card. However, as you get older the amount of time you get medical insurance diminishes, and I'm not sure it is still worth the cost.

If you have a credit card of any kind but especially a premium card, check the insurance coverage you get with the card. It may extend to trip cancellation or interruption, or even lost luggage or trip delays caused by airlines.

Another thing to check before deciding on a credit card is the exchange rate they use when converting foreign currency. Some Canadian banks had to settle a class action suit some years ago because they were charging exorbitant rates for foreign transactions. If you use a particular foreign currency often in your travels, consider getting a credit card issued in that currency. Many Canadian banks offer U.S. dollar cards, for example.

A credit card is very handy when you travel, but if you have poor credit there are often ways around it. For instance, in the U.S. I have recently observed people renting cars at Enterprise by using a debit card and making a substantial deposit.

I'm not going to get into the intricacies of credit cards that are connected with airline rewards and frequent flier miles. For information on them, consult www.thepointsguy.com or www.flyertalk.com.