Whether it's a weekend getaway or a two-week escape traveling your favorite foreign country, getting a "designated traveler" credit card can make life much simpler.
What's a designated traveler? It isn't as mysterious or as complex as it may sound and it isn't some new kind of credit card. In fact, that's part of the beauty as any credit card can do the job. It simply means designating one of your existing cards or getting an additional credit card that you use strictly for travels, no matter how short or how long, domestic or foreign.
Why do I need one? The simple answer is to separate your travel expenses from your day-to-day credit card charges. There are many reasons for this.
You can match your designated traveler credit card to your vacation budgeting strategy. People manage their credit differently... some pay off their charges every month, others continually carry a balance, and then some use both strategies, depending on the current situations. However, when you go to travel, you may wish to adopt a different strategy for that trip... you specifically save up for a trip to pay for it all when it happens, but you might normally carry balances elsewhere. Or, you may normally pay your balance in full each month, but might want to pay off your vacation over a few months time.
Along with this budgeting strategy, you can adopt the appropriate credit card strategy. If you pay your designated traveler credit card off immediately, then you might want to use a credit card that has great rewards or cash back, even though it carries a much higher interest rate. Likewise, if you carry a balance on this card, obtaining the lowest interest rate may be more important. No sense paying high interest rates on the milk and gas you bought last week on top of your vacation expenses. Match up your credit strategies to the appropriate credit cards.
Everyone should audit their credit card statements when paying their bill to make sure that all charges are accurate and legitimate. Mixing in a bunch of travel charges with all your regular charges can make things considerably more complicated. This is especially true when you are traveling abroad where you may not recognize the name of the business and it may be in a different language. Now add in the effects of exchange rates and currencies to try to match up your expenses to. You'll still need some cash when traveling abroad, but your designated traveler can simplify money handling, limit your risk, and cut down on currency exchange charges.
So next trip, give your regular credit cards and your new designated traveler credit card well deserved vacations.
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