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Expat life can present unique challenges, but it can come with some sweet rewards. In fact, the right credit card can help you spend, save and get the most out of living abroad.
A recent study on expat quality of life shows that expats are enjoying life around the world in countries ranging from Austria to New Zealand. Expats pick countries for a variety of reasons, including climate, health care, peacefulness, safety and even the ease of “digital life.” The top three most popular countries to live as an expat right now: Taiwan, Portugal and Spain.
In this article:
- What you need to know before you go
- Most important credit card features expats need
- 5 best credit cards for expats
No matter where you choose to live abroad, it’s important to have the right expat credit card in your wallet.
What you need to know before you go
In an ideal world, you should get your credit cards in order before you leave the country. When shopping for a credit card for your expat life, consider credit card acceptance worldwide. Mastercard and Visa are both accepted at 44.4 million merchants worldwide, and Discover is almost as accepted with 42.9 million merchant locations. However, American Express is accepted at only half as many (22.1 million) merchants around the world.
What would you do if you broke your ankle while hiking a volcano in Guatemala, crashed your rental car on a country road in France or lost your suitcase on the way to Mozambique?
Soon-to-be-expats should apply for credit cards before leaving the United States because some U.S. banks will not issue a card to an applicant living outside the country. For example, Chase requires you to have a valid permanent home address within the 50 U.S. states, Puerto Rico, Guam or the U.S. Virgin Islands, or to have a U.S. military address.
As soon as you get your cards, set up electronic delivery of all statements and other documents. “It makes keeping track of your spending and paying your bills easier,” Look said. “Also, if your card has a phone app, this can give you a lot of peace of mind as you can check new transactions almost instantly.”
Expats should know that exchange rates are variable, meaning they change over time, said credit card expert John Ulzheimer. And, they cross currency types, meaning your conversion from the various foreign currencies to U.S. dollars will be different. And finally, they also vary across card brands, meaning the conversion on a Visa card will likely be different when compared with other card networks, Ulzheimer said.
When making credit card purchases overseas, you’ll often be offered an option to use local or U.S. currency, Look said. “Long story short, always opt to pay in local currency,” he said. If you don’t, you could end up paying 3%-3.5% extra, he said, as merchants may tack on their own currency conversion fees. It’s better overall to allow the card network to do the conversions.
Most important credit card features expats need
Expats need to choose their go-to credit card wisely so they can maximize travel rewards, take advantage of any traveler perks and avoid getting hit with hefty foreign transaction fees on purchases.
Here are the three most important features expats need to look for in a credit card:
No foreign transaction fees — The conventional wisdom when shopping for a credit card is to look closely at the annual fee. For expats, it’s even more important to make sure a card does not charge any foreign transaction fees, which are fees some card issuers charge on every purchase made outside the United States. A CompareCards.com study on foreign transaction fees found that half of cards charge these fees, which average almost 3% on cards issued by banks and a little over 1% on cards issued by credit unions. These fees add up when you’re using a card abroad for an extended period of time, and a fee that would simply annoy a vacationer may break the bank for an expat.
Rich travel rewards — Expat life begins with traveling to a new home, and often includes additional travel after arrival. By choosing a card that rewards travel, you can maximize your card’s rewards points or miles from travel spending and then cash in on those rewards to pay for more trips. Think about what kind of traveling you’ll do as an expat and then choose a card that fits your lifestyle, said Jonathan Look, who runs the travel retirement adventure blog Life Part 2 and recently moved from Portugal to Malta. “For me, travel rewards are very important,” Look said. “Those airline miles add up quickly and many cards offer big sign-up bonuses.”
“Expats should think about what they’ll really be getting if they’re paying a fee toward a card, and if that is worth it.”
Travel perks and insurance — Living abroad means you may be far from friends and family who’d normally bail you out in an emergency. You also might be going on more adventures, with extra risk of lost luggage, canceled trips and getting sick or injured far from home. For example, what would you do if you broke your ankle while hiking a volcano in Guatemala, crashed your rental car on a country road in France or lost your suitcase on the way to Mozambique? Look for auto rental collision damage waivers, emergency medical evacuation benefits, trip cancellation and interruption insurance, and lost luggage coverage. An expat can really benefit from this extra coverage if something goes wrong, Look said.
It’s also smart to look at a card’s annual fee, but the travel benefits may make an annual fee worth the price, said travel blogger and photographer Becca Siegel. “Expats should think about what they’ll really be getting if they’re paying a fee toward a card, and if that is worth it.”
5 best credit cards for expats
We looked at a wide variety of credit card offerings to choose the best credit cards for expats and considered many factors in our selections that could impact expats. First, we chose only no foreign transaction fee credit cards, and we heavily favored cards that also offer travel insurance benefits since an expat may more likely need coverage than your average traveler. And we sized up travel rewards and travel perks, such as free checked bags and airport lounge access. We chose a few cards with high annual fees that might be worth the cost for expats, as well as several with lower annual fees and one no annual fee card for expats on a budget.
Here are our five top credit cards for expats:
Chase Sapphire Reserve®
- Annual fee: $550 plus $75 for each authorized user
- Foreign transaction fee: $0
- Rewards rate: 3X points on travel immediately after earning your $300 travel credit. 3X points on dining at restaurants & 1 point per $1 spent on all other purchases. Plus, you’ll earn 50% more when you redeem rewards through the Chase Ultimate Rewards®
While the $550 annual fee seems steep at first glance, a $300 annual travel statement credit effectively lowers the fee to $150. Earn 50,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That’s worth $750 in travel when redeemed through the Chase Ultimate Rewards portal. The card has generous rewards for travel and dining, allowing expats to rack up points quickly.
Finally, the Chase Sapphire Reserve® card offers free airport lounge access through Priority Pass Select, as well as $100 reimbursement for Global Entry. The card includes an array of travel insurance benefits, including up to $100,000 in emergency medical evacuation coverage, $20,000 per trip in trip cancellation and interruption coverage, as well as lost luggage reimbursement up to $3,000 per passenger. Overall, this card is an excellent value for expats when you consider all the benefits.
Earn 50,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening.
3X points on travel immediately after earning your $300 travel credit. 3X points on dining at restaurants & 1 point per $1 spent on all other purchases.
One Year Complimentary Lyft Pink ($199 minimum value). Complimentary DashPass subscription from DoorDash after activating by 12/31/21.
- Earn 50,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $750 toward travel when you redeem through Chase Ultimate Rewards®
- $300 Annual Travel Credit as reimbursement for travel purchases charged to your card each account anniversary year
- 3X points on travel immediately after earning your $300 travel credit. 3X points on dining at restaurants & 1 point per $1 spent on all other purchases. $0 foreign transaction fees.
- Get 50% more value when you redeem your points for travel through Chase Ultimate Rewards. For example, 50,000 points are worth $750 toward travel
- 1:1 point transfer to leading airline and hotel loyalty programs
- Access to 1,000+ airport lounges worldwide after an easy, one-time enrollment in Priority Pass™ Select
- Up to $100 application fee credit for Global Entry or TSA Pre✓®
- One Year Complimentary Lyft Pink ($199 minimum value). Complimentary DashPass subscription from DoorDash after activating by 12/31/21.
See additional details for Chase Sapphire Reserve®
Citi Prestige® Credit Card
- Annual fee: $495
- Foreign transaction fee: 0%
- Rewards rate: 5X points on air travel & restaurants, 3x points on cruise lines & hotels, and 1x points on all other purchases
The Citi Prestige® Credit Card also has a high annual fee, but it’s offset by a $250 travel credit, essentially lowering the fee to $245 a year for most expats.
Earn 50,000 bonus points after spending $4,000 within 3 months of account opening. This is worth $500 in travel that can be redeemed with no blackout dates. The rewards structure can pay off for expats who buy airline tickets and eat in restaurants frequently. And the Citi Prestige® Credit Card also offers impressive travel perks, including a free fourth night hotel stay twice a year and airport lounge access through Priority Pass Select. The card also comes with travel accident insurance, trip cancellation and interruption coverage up to $5,000 per trip, lost baggage coverage up to $3,000 per traveler per trip, baggage delay protection up to $500 and 24/7 travel and emergency assistance.
Chase Sapphire Preferred® Card
- Annual fee: $95
- Foreign transaction fee: $0
- Rewards rate: 2X points on travel and dining at restaurants & 1 point per dollar spent on all other purchases worldwide and 25% more in rewards redemption through the Chase Ultimate Rewards portal
The less flashy and less expensive counterpart to the Chase Sapphire Reserve®, the Chase Sapphire Preferred® Card is a solid choice for expats who would rather sacrifice some perks and benefits for a lower annual fee. Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $750 toward travel when you redeem through Chase Ultimate Rewards® That’s worth $750 in travel. The Chase Sapphire Preferred® Card offers the travel coverage expats need, with trip cancellation and interruption coverage up to $10,000 per person, trip delay reimbursement up to $500 per ticket, an auto rental collision damage waiver, baggage delay insurance up to $100 a day for five days and travel and emergency assistance services.
60,000 bonus points
2X points on travel and dining at restaurants & 1 point per dollar spent on all other purchases worldwide
Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards. For example, 60,000 points are worth $750 toward travel
- Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $750 toward travel when you redeem through Chase Ultimate Rewards®
- 2X points on travel and dining at restaurants worldwide & 1 point per dollar spent on all other purchases.
- Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards. For example, 60,000 points are worth $750 toward travel
- Get unlimited deliveries with a $0 delivery fee and reduced service fees on orders over $12 for a minimum of one year on qualifying food purchases with DashPass, DoorDash's subscription service. Activate by 12/31/21.
- Earn 5X points on Lyft rides through March 2022. That's 3X points in addition to the 2X points you already earn on travel.
See additional details for Chase Sapphire Preferred® Card
Citi Premier℠ Card
- Annual fee: $95
- Foreign transaction fee: 0%
- Rewards rate: Earn 3X Points on Travel, Including Gas Stations, Earn 2X Points on Dining Out & Entertainment, Earn 1X Points on All Other Purchases
The Citi Premier℠ Card is another good choice for expats who don’t mind giving up perks like airport lounge access to get a lower annual fee. Earn 60,000 bonus ThankYou® Points after you spend $4,000 in purchases within the first 3 months of account opening, worth $750 in travel through the Thank You Travel Center. Like the Citi Prestige® Credit Card, the Citi Premier℠ Card offers travel accident insurance, trip cancellation and interruption coverage up to $5,000 per trip, lost baggage coverage up to $3,000 per traveler per trip, baggage delay protection up to $500 and 24/7 travel and emergency assistance.
Capital One® VentureOne® Rewards Credit Card
- Annual fee: $0
- Foreign transaction fee: None
- Rewards rate: 1.25 Miles per dollar on every purchase, every day
The Capital One® VentureOne® Rewards Credit Card is a no-frills card that offers way less in the way of perks and travel benefits. However, the card works well for expats who do not want to pay an annual fee or don’t use their card frequently, but still need a card that doesn’t charge a foreign transaction fee. The card has a One-time bonus of 20,000 miles once you spend $1,000 on purchases within 3 months of account opening, equal to $200 in travel. Even with no annual fee, it offers an auto insurance collision damage waiver, travel accident insurance and 24-hour travel assistance.
If you are ready to take the expat plunge, know that the right credit card can help make life abroad easier by offering great travel rewards, travel insurance benefits and other perks like airport lounge access.
Despite the high annual fee, both expats we interviewed chose the Chase Sapphire Reserve® as their favorite card. “Yes, at first glance, the annual fee of $550 is pretty brutal, but if you look at the benefits, you can see how the card is a pretty good deal,” Look said.
The information related to Citi Prestige® Credit Card and Citi Premier℠ Card has been independently collected by CompareCards and has not been reviewed or provided by the issuer of this card prior to publication.