What makes a great credit card for international travel? Just because a card is ideal for your shopping needs in the United States doesn't make it a smart choice for use abroad. This is especially true in a region like Central America, where credit card acceptance isn't universal.
Features to look for in a travel credit card
There are several things to consider when you're looking for a credit card to use while traveling internationally. First of all, it's important to make sure that the card will be readily accepted in the region or country you're traveling to. Second, you want a card with minimal fees. And finally, you want the credit card to have good rewards and other perks.
As far as acceptance goes, Visa and MasterCard are the undisputed leaders when it comes to international acceptance. American Express is commonly accepted in foreign countries, but not nearly as much as Visa and MasterCard are. Discover is mostly a U.S. credit card company -- its cards are simply not widely accepted outside of the U.S. It's also important to point out that "widely accepted" can be a relative term, depending on where you're going (we'll get into that in the next section).
Also note that many credit cards charge a foreign transaction fee on any purchase that originates outside of the U.S. This fee can vary, but the industry standard is a 3% surcharge on non-U.S. purchases; as you may imagine, this could add up rather quickly on an international trip when you're charging thousands of dollars in purchases. Fortunately, most credit card issuers offer at least one card that does not charge foreign transaction fees. Cards advertised as "travel" cards generally don't charge such fees, but this is not a set-in-stone rule.
Finally, you want the credit card to have competitive perks and rewards. Competition among card issuers is intense, and the 0% intro APR offers, sign-up bonuses, and rewards programs on the market now are some of the most generous we've ever seen.
Credit card acceptance in Central America
Generally speaking, credit cards are accepted throughout Central America, with Visa and MasterCard being the most widely accepted, in that order. However, this does not mean that you should expect to pay for every meal and shopping expense in Central America on your Visa card. Credit cards are not as universally accepted as they are in the United States.
This is especially true in certain countries. In Costa Rica, credit card acceptance is widespread, but in Belize, Nicaragua, and Guatemala -- not so much. Major hotel chains and upscale retailers and restaurants typically accept credit cards wherever you go, but this is not always true of smaller hotels and local restaurants and merchants.
So, while credit card acceptance in Central America is relatively high in many places, it's still important to have access to cash. U.S. currency is readily accepted throughout much of Central America, but in some cases, you'll need to have local currency.
Some of our favorite credit cards for international travel
I mentioned earlier that credit card offers are more generous than ever. They are also constantly changing, so to make sure you choose the best credit card for your next trip to Central America, be sure to check out our updated list of our favorite travel credit cards.
For travel to Central America, the best bet is a Visa or MasterCard product, for the acceptance reasons mentioned earlier.
The Capital One® Venture® Rewards Credit Card is one of our favorites for foreign travel. The card charges no foreign transaction fees, and offers an industry-leading rewards rate of two miles per dollar on all purchases, with unlimited earning potential. And while the card charges a $95 annual fee (waived the first year), there's typically a valuable sign-up bonus offered; it could more than make up for several years' worth of paying the fee.
If you'd prefer not to pay an annual fee but still want to earn rewards at a generous rate, the Bank of America® Travel Rewards credit card could be a good option for you. The card earns rewards at 1.5 points per dollar, which isn't quite as impressive as the Capital One® Venture® Rewards Credit Card, but if you're already a Bank of America customer, you could be eligible for a relationship bonus making your rewards 10% to 75% higher. And as with most travel-oriented credit cards, there are no foreign transaction fees to worry about.
The bottom line
When traveling to Central America (like pretty much any other international destination), a Visa- or MasterCard-branded credit card that doesn't charge foreign transaction fees is generally the best way to go. I've named a couple of our favorite travel-rewards credit cards here, but there may be others that better suit your needs and reward preferences, so it's certainly worth shopping around.
Just remember that, depending on your destination in Central America, credit cards may not be accepted everywhere you need to pay for things. So keep this in mind, and be sure you have sufficiently easy access to cash as well.
Matthew Frankel owns shares of American Express and Bank of America. The Motley Fool owns shares of and recommends Mastercard and Visa. The Motley Fool recommends American Express. The Motley Fool has a disclosure policy.