What's the Latest on Travel Credit Cards?
Some Cards Offer Travel Benefits
March 10, 2011 -- The relationship between travel and credit cards may be longstanding, but it continually evolves and changes. Knowing my ongoing interest in the subject, a reader asked me:
"What's new with credit cards for travelers?"
The short answer is, "Some key issuers have added important benefits to at least a few of their cards. But there's no news yet on the chip-and-pin front." Here's a look at some of the latest developments.
Chase and Citi Drop Foreign Surcharges on Premium Cards
Two big banks are dropping the 3 percent surcharge on foreign purchases on at least some of their premium-level cards:
These two banks join Capital One in eliminating not only the bank-imposed 2 percent surcharge but also the 1 percent conversion fee nominally charged by the international MasterCard/Cirrus and Visa/Plus networks, resulting in a zero fee. American Express has also recently dropped the surcharge for its Platinum card.
I know of no other banks that assess neither their own nor the network fees, but several niche banks, including USAA and many credit unions, add only the networks' 1 percent charge, as do some other cards limited to a few banks' preferred and high-value customers. But on most cards, the giant banks – Bank of America, HSBC, US Bank, Wells Fargo – still add a 3 percent surcharge to all foreign purchases, as do Citi and Chase on other cards.
"Free" Checked Baggage
Three card issuers have noticed the public resentment about baggage charges and are offering relief from these offensive fees:
I know of no other cards that waive or absorb baggage or other fees. In this competitive environment, however, a few other cards may follow.
Lounge Membership
Five premium cards now provide for access to airport lounge clubs as a no-extra-cost benefit:
I know of no other cards issued by U.S. banks that provide for no-cost airport lounge access.
Other Benefits
Virtually all of these cards claim big mile/point bonuses for initial enrollment, first purchase, and reaching a purchase plateau, as well as mileage bonuses for various classes of purchases. I downplay those claims, mainly because amassing lots of miles doesn't gain you much if you can't use them. These cards also typically include a laundry list of standard benefits, including buyer protection, rental car collision coverage, overseas assistance, and such.
For the most part, cards that offer a high level of travel benefits generally entail relatively high annual fees and good credit scores. You have to check each card individually for the right mix of benefits and requirements.
Chip-and-Pin: No Progress
With all the competition among cards for travel benefits, I'm still stumped to figure out why no big U.S. bank has started to offer dual-mode credit cards that travelers can use in both the stripe-and-sign system in general use in the U.S. and the chip-and-pin system that is quickly becoming the standard in Europe and many other overseas areas. The banks say they can't convert to chip-and-pin completely because of the prohibitive cost of converting all individual merchants to the new technology. Fine, I'll accept that. But I don't see why they can't issue cards enabled for both systems. They're already issuing such cards overseas. Dual cards wouldn't require any changes among U.S. merchants and would probably cost no more than a one-time extra charge of a dollar or so to issue such a card upon cardholders' request. Go figure.
Ed Perkins is a SmarterTravel contributing editor and a respected commentator on all aspects of the travel industry, including passenger comfort and rights, travel insurance, the best credit cards for travelers, and car rental. This article originally appeared on SmarterTravel.