Overview
My profession has allowed me to live in Europe 10 months out of the year for the last 13 years. While living here, I’ve had bank accounts in 5 different countries but never made the switch over to a European credit card. While it would be easier to get credit cards connected to the bank accounts I’ve opened here and use them without thinking about foreign transaction fees, I always feared missing out on something. After so much research on credit cards, turns out I was right! The benefits of US credit cards by far outweigh any credit cards that you can get through overseas banks.
The US credit cards have higher SUB’s, more reward categories and give a higher bonus per dollar/euro spent than their international counterparts. The US credit cards, give SUB’s so high in value that you can cover the annual fee (AF) of the card for years without spending a cent after you reach the minimum spend for the bonus. For example, the US Platinum card offers 125k MR points (Amex points) which is equal to $1,250 - $2,500 in value with a $695 AF. The Platinum Card in Germany has an AF of 660€ and the SUB is 250€.
Even while being overseas, using an US credit card has the possibility of getting you more value than using it domestically. Overseas, you have to make multiple stops every time you run errands for example, going to the pharmacy, coffee shop, grocery store, clothing store and so on. All of those stops equal multiple card swipes, in the US on the other hand, you can get everything done in one trip which means ONE credit card swipe.
Today’s post will highlight the advantages and disadvantages of using US credit cards as an expat living abroad. Just remember, I’m speaking from my experiences and research. Your miles may vary (YMMV) so do your own research if you’re thinking about applying to a card because you read my one of my post!
Here’s where being an expat shines.
Expat Advantages
Travel Category (all travel)
Travel has been a huge category for us. The travel category itself, is where the CSR shines above all other travel credit cards because its travel category is termed as “Broad” travel, so everything that has anything to do with travel counts as 3x per dollar spent. While we use the Amex Green where we can, which also has the broad travel category, the CSR has been accepted everywhere we’ve tried to use it. Tolls, trains, parking services, buses, flights, taxis, subways, ride shares and boat tours are all covered under the broad travel category. The majority of international cities, big and small, you’ll get heavy use in this category. In comparison, the only way to get the same type of high value from the travel category in the US would be in big cities, specific jobs that require contestant public transportation use or you rent cars pretty often.
Gas Station Category
Gas is a forgotten category abroad but it’s a lot more expensive than the US, so for that simple reason it’s a higher earner. European gas prices are on average, 3 times more than the US. So that’s 3 times the rewards. There’s a few cards that have multiplayers in gas worldwide but if you have one, the points and miles add up quickly. An easy work around if you have a grocery store bonus card is to buy the gas gift cards in the grocery stores when you have a bonus for grocery spend but not gas. The gift cards overseas luckily don’t code like they do in the US so you can do this pretty often and purchase a good amount if needed. Shhhhh you didn’t hear that from me…
Hotel and Airline Credit Cards
Hotel and Airline credit cards are good cards to have for the no foreign exchange fees and sometimes (YMMV) as an everyday (non bonus) card. I’ll mention this more and more as posts continue to come out. You should always sign up for the free memberships with airlines and hotels, even if you use them one time. With the credit cards for those companies, it’s another way to gain points and miles, plus preserve your points and miles from expiring (US travel companies only).
Good everyday credit cards that earn a good rate and have a higher cents per point (cpp) average are hard to come by that don’t have an FTF (foreign transaction fee). For us, you have to decide where you want your travel points and miles to go. This takes planning and understanding if you’re trying to add up miles or hotel points, but if you’re letting transferrable points pile up, theres not much thinking until you need to use them. We’ll get to that sooner than later…
Hotel Loyalty Programs
Hotel Loyalty programs offer great benefits overseas. Earning high hotel elite status is a rare commodity abroad! In the US, every hotel you visit, you’re in direct competition with another guest that has the same status or higher. Overseas, you’ll rarely run into that problem. Even in the major cities I’ve been upgraded 90% of the time and I’ve gotten VIP treatment with lower level elite status like Hilton Honors Gold and Marriott Bonvoy Gold. Now that I have Hilton Honors Diamond and Marriott Bonvoy Titanium, I’m treated like royalty every time I’m checking in!
Airline Alliance Programs
While it’s difficult to gain status with US domestic airlines, expats in Europe have the advantage of earning status with European alliance partners. Also, if you’ve completed your segment requirement for the US domestic metal, you have an easier and cheaper path to earning elite status through alliance travel partners. Earning status with an alliance partner gives you status at the same tier or higher with the domestic counter part and vis versa.
For example, I have American Airlines Platinum Status and it gives me OneWorld Sapphire status with all airlines associated with OneWorld alliance partners. We recently received priority line check in, priority baggage, fast track through security, lounge access and priority boarding. The best part about this most recent trip was that I didn’t know my AA Platinum status gave me these perks and was going to try and pay for lounge access.
***blog post coming soon explaining alliance programs and their benefits***
Expat Disadvantages
Everyday (non bonus) Spend Cards
The number one issue expats come across with all credit cards that have rewards attached is an everyday (non bonus) spend card. **everyday card means spending on categories that don’t have a bonus. E.g. When shopping at a boutique, with a card that has bonus categories for gas and groceries at 3x, you’ll get 1x at the boutique instead** Using your main transferrable points card is the most common daily driver for expats. Hotel or airline cards are best if there’s a planned trip you’re working towards. I personally use the Platinum card if they accept Amex or Citi Premier if they don’t. I always try to plan out getting new cards while overseas to get SUB’s for my daily spend while still being able to use my bonus category cards for their typical purchases.
In the US, there’s more options that have 2x per dollar spent with only one having $0 foreign transactions fees. The Capital One Venture is the only transferrable points card with 2x back on all purchases and no foreign transaction fees. The travel partners have gotten better recently, still not great but better, especially for expats. ***More to come about Capital One***
Travel/Lifestyle Credits
A big part of a Travel credit cards with AF’s are the credits they offer to help offset the costs. With the exception of few travel credit cards, the credits are mainly with US domestic companies. For example, the The Amex Platinum has an $200 Uber credit, $200 Amex Travel credit, $100 Saks credit, $200 airline fee credit, $300 Equinox credit, $179 Clear credit and a $240 entertainment credit. Out of all those credits, only two are available to be used outside of the US and one requires a VPN.
We expats run into this problem a lot, especially with the new SUB’s that have been coming out recently with huge offers like $200 credit on US restaurant spend or 10x at US Grocery Stores and Gas Stations. There are ways around it, like letting family and friends use the credits and then in return, getting the money back. Takes some trust but it’s an option. Either way it’s an hassle to do and it’s not as easy as just spending in the US like you’re supposed to.
Grocery Store Category
The international grocery category is another area, travel credit cards fall short. In the US, you have many 3x and up credit cards for the groceries category but for us expats abroad, you only have one or two options. I’ll speak about the Citi Premier in future posts, but the 3x back in groceries is one of the main reasons it’s the best travel credit card for expats! Unlike the US, groceries go bad within one week of purchase here, so you need to buy them pretty often if you eat healthy. There are not many other options unfortunately for travel credit cards. Hopefully this changes sooner than later but we are at the mercy of the banks for this one.
US Airline Elite Status
As I mentioned before, it’s hard to gain US domestic airline status directly unless you’re a big spender with one of their credit cards. There are ways around it with luck in timing or you’re flying enough to earn high status with international airlines. It’s rare to gain if you’re not in the business of travel. Yes, with the international travel partners you’ll gain status with domestic airlines but you have to reach the segments required on US metal first. This makes it a hassle to reach elite status for the US airlines but reaching it with alliance partners is always an option.
While expats have a few struggles with US travel credit cards when it comes to gaining points and using credits. If you actually fly back and forth internationally, you’re more than likely earning more than most people earn domestically. The multiplayers that come with your travel cards are usually 2 or 3x bonus categories spending low amounts at a time. When flying internationally, you’re spending $500 and up a pop at 3x-5x. With the Platinum Card and Citi Prestige, (discontinued, available by product changing) that’s 2,500 points in one shot. YMMV, this is just one example of how being a expat that travels internationally gives you a big advantage when it comes to spending in specific categories.
Until next time, before you pack your bags, don’t forget to PACK YOUR POINTS!
I am not a financial advisor and highly recommend doing your own homework about the credit card you want to apply for! All of the content on my website, page and channel are for entertainment purposes only.
If you’d like my opinion or help in forming an idea of what works, I’m here to help. BUT, if you want me to make a decision for you, I cannot do that for you.
Here are REFERRAL LINKS to the credit cards mentioned in today’s post. By using them to apply, you’ll be supporting the website and channel because when approved, I’ll receive bonus points and miles as well!
Schwab Platinum Card by Amex
Apply for an American Express Card with this link. We can both get rewarded if you're approved! http://refer.amex.us/KENNEHImXb?xl=cp105f
Platinum Card by Amex
Apply for an American Express Card with this link. We can both get rewarded if you're approved! http://refer.amex.us/NATASHkCtJ?XLINK=MYCP
Amex Green Card
Apply for an American Express Card with this link. We can both get rewarded if you're approved! http://refer.amex.us/KENNEHga7A?xl=cp105f
Hilton Honors Card by Amex
Apply for an American Express Card with this link. We can both get rewarded if you're approved! http://refer.amex.us/KENNEHyfW4?xl=cp105f
Hilton Surpass Card by Amex
Apply for an American Express Card with this link. We can both get rewarded if you're approved! http://refer.amex.us/KENNEH60vq?xl=cp105f
Hilton Aspire Card by Amex
Apply for an American Express Card with this link. We can both get rewarded if you're approved! http://refer.amex.us/KENNEHMKdm?xl=cp105f
Bonvoy Bold & Boundless Card by Chase
Earn 3 Free Night Awards with the Marriott Bonvoy Boundless™ Credit Card or 1 Free Night Award with the Marriott Bonvoy Bold™ Credit Card. I can be rewarded too if you apply here and are approved for a card. Learn More.