Wednesday, April 3, 2013

Vacation Credit Card

Just coming back from a month long trip in New Zealand, I thought it would be a good opportunity to talk about vacation. I'll probably split this topic over the next few posts with this one focusing on how to get access to foreign money.

Vacations are important for any balanced lifestyle.  It offers the opportunity to relax and rejuvenate as well as seeing new places and exploring new cultures.  If taken at home, you are able to rest your body and mind to better prepare yourself for work when it resumes.  Taken abroad, vacations offer the chance to break out of your comfort zone and enrich yourself with new experiences.  Of course, you can always also explore new activities and areas in your hometown and you can relax abroad, but I find that most often that travelling to some place new invokes a greater sense of adventure.

Obviously, my vacation to New Zealand was taken abroad.  Originally, I had planned on going backpack western Europe but changed since I could still catch the end of summer in New Zealand.  There would also be a little bit less culture shock since English is the primary language and the country is absolutely beautiful, famous for many scenes in the Lord of the Rings trilogy.  The photo above is one we took of Milford Sound while kayaking.  Finally, the country is known for attracting adrenaline junkies seeking opportunities to bungee jump and skydive and foodies seeking the high quality lamb and beef.

As many of my readers can probably guess, I wanted to plan a bit about what I would do when I got to New Zealand.  Some people may prefer to just buy their ticket, arrive, and then figure out what to do but it may cost them.  While planning ahead can help save you money and stress, it is a bit tedious to do.  However, especially with regard to finances, planning is important to make sure you don't have any issues with paying for your vacation.

I would like to strongly recommend Capital One as the credit card and method of payment to use for anyone looking to go abroad.  In New Zealand, I didn't have much problems with places accepting my credit card which is on the Visa network.  There was definitely much lower acceptance of American Express and no one even mentions Discover and I would venture to say this is similar to many other foreign countries.  The main reason for recommending Capital One is that it has no foreign transaction fee.  It is extremely important to be aware of these fees with your credit cards.  I had an issue with booking my plane tickets with my Citi card which charged about a 3% fee since I booked with Virgin Australia which is considered an international company, even though the transaction was made in U.S. dollars.  Luckily, I emailed customer service twice and politely asked them to forgive this transaction for the first time and they did.  Citi has been fairly reasonable with giving a second chance but now I will make sure to use Capital One if there is any ambiguity about getting classified as a foreign transaction.

However, cash is always king.  Even though most places accepted Visa, there were a couple places which charged an extra 2% or so for using a credit card and a couple places only accepted cash.  It is important to have some emergency cash or access to cash in a foreign country.  But even though cash is king, it is often the pricier choice.  Credit cards seem to be much better priced for exchanging your domestic currency into the foreign one.  Without any foreign transaction fees, Capital One charged an exchange rate ranging from NZD 1.19 to 1.215 throughout our vacation and I believe the free market rate was around 1.20 the entire time.  This rate was no doubt much better than the currency exchange desks at the airports and in the cities as well as banks.

If you don't plan on spending vacation abroad, I wouldn't recommend Capital One as much since the rewards program is poor compared to other cards like the Chase Freedom.  But if you are going to need access to difference currencies, no other card can top it.

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