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We’re now seven weeks into the new year, and after looking at my calendar I’ve realized that I’ve spent about five of those weeks outside the US. So it goes without saying that a vast majority of my credit card spend has also been outside the US.
Copenhagen, Denmark, where I rang in the new year
I think on average most of us proportionally spend more money when traveling than when at home. Not only do charges add up quickly, but foreign transaction fees on credit cards can add up quickly as well. I’m often asked what the best no foreign transaction fee credit card is, and in my book there are two top picks:
While I think these two cards are almost unarguably the best, they’re not created equal — which card is better for you depends on which type of spender you are and what kind of rewards you’re seeking. So I figured I’d talk a bit about the relative value of each card, especially in context of international spend.
Comparing sign-up bonuses
While this isn’t relevant to which card you should actively spend money on when traveling internationally, it could perhaps sway you if you’re trying to decide which card to pick up:
The Chase Sapphire Preferred® Card offers 50,000 bonus points after spending $4,000 within three months, plus an additional 5,000 Ultimate Rewards points when you add an authorized user to the card that makes a purchase within three months. I value Ultimate Rewards points at ~1.8 cents each, so that’s potentially worth ~$900.
The Barclaycard Arrival Plus™ World Elite MasterCard® offers 40,000 miles after spending $3,000 within first 90 days. Each point can be redeemed for one cent towards the cost of travel, plus you get a 10% refund on redemptions, so that’s worth ~$440 to me.
In this case I think the Chase Sapphire Preferred is the clear winner.
Comparing spending bonuses
The Chase Sapphire Preferred® Card allows you to earn 2X points on travel and dining, which includes things like airfare, hotels, car rentals, subway tickets, taxis, parking, etc. In my case, a vast majority of my international spend falls into this category. To me that’s the same as earning a return of ~1.8-3.6 cents per dollar spent, depending on the category. Looking at my spend, about 80% of my international spend falls under the “dining and travel” umbrella.
Earning bonus points in Muscat, Oman
The Barclaycard Arrival Plus™ World Elite MasterCard® offers two miles per dollar spent, each of which can be redeemed for one cent towards the cost of a travel purchase, plus you get a 10% refund on redemptions. That’s like earning ~2.22% cash back towards travel for all purchases, regardless of the category.
Which points are more useful?
Ultimately I think which card is best to use for international travel comes down to which type of points currency you value more:
- Chase Ultimate Rewards points are transferable to nearly a dozen partner airlines and hotels, and can be used as “traditional” miles; if you understand the programs, that has the potential to be extremely useful. These points can also be redeemed as 1.25 cents each towards the cost of a travel purchase.
- Barclaycard Arrival miles can be redeemed as cashback towards travel. For each dollar you spend you’ll ultimately get ~2.22% of value towards a travel purchase.
Ultimate Rewards airline partners
If you have aspirations of redeeming your points for international premium cabin award tickets, then Ultimate Rewards points will be more valuable. If you’re hoping to redeem your points for cheap domestic tickets or for international economy tickets that you’d still like to earn miles on, Barclaycard Arrival miles would be more useful.
Just recognize that there’s virtually no “information disadvantage” when it comes to using Barclaycard Arrival miles, while there are great uses and not-so-great uses of Chase Ultimate Rewards points.
For my personal uses, the Chase Sapphire Preferred® Card proves more rewarding to use when traveling internationally. That’s because a vast majority of my spend when traveling falls under the category of “dining” and “travel” (shocker!). Earning a return that I value at ~3.6% while not paying foreign transaction fees is huge.
The one major advantage of the Barclaycard Arrival Plus™ World Elite MasterCard® is that it has Chip + PIN technology, which means it can be used at many automated kiosks in Europe, like at train stations, etc.
Chip + PIN technology makes buying train tickets in Europe easier
I know a lot of people don’t like cards with annual fees, but I do think in many cases waived foreign transaction fees alone justify some annual fee cards. Fortunately in the case of both of these cards, the annual fee is waived the first year.
What’s your preferred credit card to use when traveling internationally?