Is it better to use a travel card or a credit card?

It’s better to use a travel credit card if you travel frequently because you can get travel-based rewards and benefits that a regular credit card might not offer. These benefits include travel insurance, airport lounge access, and annual travel credits.

Using a card geared toward travelers rather than a regular credit card can help you get the maximum value out of your spending. If you don’t travel often, however, another type of credit card – a cash back credit card, for example – will likely prove to be a better choice.

In addition to travel credit cards, there are prepaid travel debit card options that may be useful for some people. These prepaid cards allow you to preload international or domestic currency onto the card to spend at any merchant that accepts the card’s network, and they often offer travel protection in the form of lost luggage assistance and reimbursement. But even if you get a travel debit card, it’s a good idea to have a credit card as backup when you travel (and for credit-building / rewards-earning purposes).

As you’ll see below, there are different benefits to using a travel credit card or a prepaid travel debit card. In either case, you’ll want to make sure the card you choose has no foreign transaction fees if you plan to use it abroad.

Benefits of a Travel Credit Card

• Earn higher rewards rates on travel purchases: Travel credit cards may give higher rewards rates on travel-related purchases like plane tickets or hotel reservations, compared to regular credit cards.
• Use rewards for travel savings: If you rack up enough rewards, you could completely pay for plane tickets or hotel stays. This can save frequent travelers a lot of money, and even the average user can save over $1,000 in the first two years of using a travel credit card.
• Transfer rewards: Some travel cards allow you to transfer your rewards to your airline or hotel loyalty account, which can be helpful if your rewards expire soon or if your loyalty account is short on rewards. Some cards even increase the value of your rewards when you transfer them.
• Get big initial bonuses: Travel credit cards are known to offer large initial bonuses, which can be appealing even for infrequent travelers.
• Enjoy annual travel credits: Some travel credit cards offer a yearly free night or statement credit, which can be a nice perk of having the card. Just make sure that the annual fee doesn’t outweigh the value of the benefits you’re receiving.
• Enjoy other perks and benefits: Luxury airport lounge access, travel insurance, and high-level status in airline and hotel loyalty programs are just some of the benefits that can be found on travel credit cards.

If you don’t want to use a credit card but don’t feel safe carrying cash around, a prepaid debit card can be a great option for traveling. There are some added benefits, too.

Benefits of a Travel Debit Card

• Limits how much cash you need to carry: Using a prepaid travel debit card makes carrying large amounts of cash unnecessary because you can simply load your card instead. And if you lose your prepaid card, you can immediately cancel and replace the card by contacting the issuer online or over the phone. You’ll also have built-in fraud protection from the card network, and the card isn’t linked to your bank account so there’s no risk of a thief accessing your account.
• Lock in exchange rates: You won’t need to worry about the exchange rate changing while you’re traveling, since the rate will be fixed at the time that you load the card.
• Load multiple currencies: You can have multiple currencies on some cards at the same time, which is helpful if you’re visiting multiple countries or want to continue using the card when you come back home.
• Helps with budgeting: By preloading the card, you’re essentially setting a spending limit before you even leave home. This can help keep spending under control. Should you decide to expand your budget during your trip, however, you can often reload your card online and at retail locations worldwide.

To learn more, check out WalletHub’s editors’ picks for the best travel credit cards and best prepaid travel debit cards.