This page is part of a larger series focused on empowering you with tips, tricks and inspiration to help you finance your gap year. Many of these tips come from things I personally did when planning my own.

Preparing Your Finances Before a Gap Year (Part 1)

1) Money, Travel and Mindset
2) Determine How Much Money You’ll Need for a Gap Year
3) How to Save for Your Gap Year
4) Pay off your debts before taking a gap year

Preparing Your Finances Before a Gap Year (Part 2)

5) Converting Money
6) Services and Fees to Cancel and/or Reduce Before You Leave for Your Gap Year
7) Other Money Related Resources

Using Credit Cards, Debit Cards and ATM’s For Your Gap Year

8) Using credit cards while on your gap year and before it
9) Top Travel Credit Cards
10) Avoiding ATM fees while abroad

8) Using credit cards while on your gap year and before it

Credit cards can be very advantageous for your travels. There are many out there that provide either cash rewards or travel points towards hotels or airline tickets. I don’t like be restricted to a specific airline or hotel chain, so I personally use credit cards with cash rewards. That way, I can spend the money the way I choose. However, if you are preferential to one or more airlines or hotels, it may be a good idea to get their credit card as they provide additional benefits such early check-in, free or reduced bag fees, free or reduced airport lounge entrance and free hotel stays. What most people don’t realize is that credit cards offer many other benefits such as trip delay and trip cancellation insurance, lost luggage, supplementary rental car insurance and many other hidden benefits.

One important thing to verify with your credit card issuer is that they don’t have foreign transaction fees. This is typically around a 3% charge that the issuer will charge you if you use your card abroad. Think of it like an additional 3% tax that you pay for each additional transaction. That fee can add up quickly, so avoid cards with this fee! What’s nice is Capital One (my personal preference) who at this time of writing has no foreign transaction fees and travel credit cards (e.g. airline, hotels) will most likely offer them too.

The last point I like to make is, if you’re working to save up and plan for a gap year, let your credit cards work to your advantage! Your spending on normal, everyday purchases can really accumulate lots of money over time. Again, I prefer cash rewards, because I can see the cash from my purchases tally up in my savings account over time. However, if you’re banking up points or airline miles, it’s the same end result. The only thing I will say though, is if possible, make sure to pay your credit card purchases off each month. Don’t spend more than you earn! Having credit card debt

9) Top Travel Credit Cards

The top two credit cards that I like are from Capital One. As mentioned before Capital One does not charge transaction fees (as of this writing) for purchases abroad. Along with that, they have quite a few options for those who have great credit and are looking for cash back or point options. The ones I have are the SavorOne and Quicksilver cards. The SavorOne card gives you higher cash back on entertainment and dining (3%) and grocery purchases (2%) than many other credit cards. I use my card for these specific categories. I use my Quicksilver for the majority of my other purchases, as it pays 1.5% back on purchases. Other than earning cash back, I also like that these credit cards have no annual fees, as I personally refuse to pay to have a credit card.

Some other good travel credit cards I have heard of, but personally have not used include: Capital One Venture Card, Chase Sapphire cards and American Express cards. The reason why I don’t use these is because I don’t like paying an annual fee and having to deal with changing “points” or “miles” into my next trip. I know friends who use these or similar cards and love them, but my personal preference again is to just get cash back. That way I can use the cash for whatever I want.

A couple of websites I’d recommend for researching the top cash back and travel reward credit cards are The Points Guy and Nerd Wallet. I really like The Points Guy because the blog goes into great detail on how to choose the best credit cards for you and how to maximize your cash back/points earnings.

Note: The cash back amounts are up to date, as of this writing (November 2020). Please check with the card issuers to see up-to-date rewards and terms.

10) Avoiding ATM fees while abroad

While traveling if you’re using ATM’s a lot, I would advise you to get a debit card that doesn’t charge you fees. When I did my world trip in 2017, I utilized the Charles Schwab debit card, which I learned of it from a blogger, Traveling Jackie with her Budget Minded Traveler website article. Her tip in getting this card saved me hundreds of dollars that year. When you consider that most banks will charge you $3-5 each time you use an ATM, those fees can add up super quickly. In just one month alone in Chile, Schwab reimbursed me over a $100 in ATM fees. My personal experience with Schwab has been super positive. There are other cards out there that may offer similar benefits, but from my online research, Schwab was the best one I found.