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Many people hear the phrase “credit card” and immediately envision stacks of debt. That’s not an entirely inaccurate association considering that Americans hold more than $1 trillion in credit card debt. According to a recent survey, millennials are legitimately more terrified of credit card debt than they are of dying. Yes, you read that right: dying.
It makes me incredibly sad when I read statistics like that. Credit cards can be such a huge asset for young people… if they’re used correctly.
Today, I want to explain how credit cards can make your dreams of traveling the world more feasible, as long as you pay off your debt and use them responsibly.
Airmiles and Cashback Rewards
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There’s a little something called “travel credit cards,” and if you have a passion for exploring, they’re liquid gold. These cards will give you everything from free airline miles to cash bonuses as a reward for spending money like you normally would.
For instance, when I furnished my first apartment, I applied for the Chase Sapphire Card. After spending $4,000 in the first three months (which was easy to do considering I had no furniture or homeware), they gave me 50,000 points. That translates to $625 in travel redemption via their rewards site. Plus, I earned points throughout the year on more purchases, so I ended up with close to a grand in travel rewards. On top of that, you get 25 percent more value when you redeem airfare, hotels, car rentals, and cruises through their Ultimate Rewards system.
Even if you can’t apply for a credit card that offers travel rewards, you can still look into cards that offer cash back programs. For example, the Discover it Cash Back card gives you five percent back in specific spending categories every three months. During one quarter of the year, they might give you five percent back when you buy groceries. During another, they’ll give you five percent back on gas.
When you’re looking for the best travel credit card, a cash back advantage might not seem like a big deal, but it adds up. A couple hundred extra dollars go a long way toward planning your next adventure across the globe.
Discounts on Select Travel Expenses
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Many big credit card companies partner with travel companies like Marriott, Turo, Ritz Carlton, cruise lines, and countless others. Just being a cardholder is often enough to give you access to discounts with these partners. A nice hotel stay doesn’t seem as unaffordable when you’re getting 25 percent off, right?
Credit cards might also offer gift cards at discounted prices, which you can use to travel in the future. I recently bought three AirBnB cards for 20 percent off. Even though I didn’t have a use for them at the time, I know they’ll come in handy over the next year.
No Foreign Transaction Fees (Sometimes)
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If you travel abroad armed with just a debit card, you might end up paying quite a bit in transaction fees at ATMs and stores. This might seem like a tiny inconvenience, but no one wants to pay extra to use their own funds.
That’s where credit cards come in. Barclay, Capital One, Chase, and Citi all have cards that come with zero foreign transaction fees. Every time you swipe your card, whether you’re in Africa or Europe, you’ll only pay what you agreed to pay.
On a side note, if you want to avoid transaction fees or exchange rates, you should look into cryptocurrency!
Protection for Travel-Related Incidents
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Most people are surprised to learn that credit card companies often offer benefits like flight delay reimbursement and lost luggage insurance. Just the other day, an airline company lost my friend’s luggage. Fortunately, she had purchased the flight with her Chase credit card. The company gave her $200 so that she could buy toiletries and clothes until they received their suitcase.
If you were in my friend’s situation without a credit card, you’d have to drop your own money on clean underwear and a toothbrush. No fun shopping trip on vacation for you.
Why You Shouldn’t Be Scared
When you apply for a credit card, you don’t give up any power over your finances. In fact, you gain more power. Just make sure that you:
1) Pay your statement balance (in full) on time,
2) Don’t spend more money than you have in your bank account.
3) Make sure you’re being responsible with your purchases.
As long as you abide by these golden rules, you’ll experience the bright side of credit cards without all the fear of debt. So what are you waiting for? Apply for a travel credit card today and start living your best life (preferably somewhere exotic and beautiful).
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