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Adding supplementary credit cards — credit cards tied to a primary credit card account — can be a good way to help someone establish credit. For example, adding a supplementary credit card for a child can help them build credit, since they will get the benefit of the primary cardholder’s good credit history. Someone working to rebuild their credit could also benefit.

Still, it’s important to keep in mind that the primary cardholder is responsible for any charges made by any authorized users on the account. Read on to learn more about who can benefit from a supplementary credit card and the pros and cons of adding an authorized user to your account.

What Is a Supplementary Credit Card?

A supplementary credit card, also known as an authorized user credit card, is a secondary credit card tied to the account of an existing user. This existing user could be a trusted friend, family member, or caregiver. The primary cardholder is responsible for all charges made by any authorized users or supplementary credit card holders.

Recommended: What Is Considered a Fair Credit Score?

How Do Supplementary Credit Cards Work?

When you add a supplementary credit card to your credit card account, your credit card company will send a new physical card. The credit card issuer will typically mail the card to the address of the primary cardholder in order to prevent fraud.

In some cases, the supplementary credit card number will be the same as the card number of the primary credit card. In other cases, it may have a different number. Either way, all charges made on the account — including those made by supplementary cardholders — are the responsibility of the primary cardholder.

Supplementary Credit Card Annual Fees

For most credit cards, there is not a charge to add a supplementary credit card or authorized user. However, some premium cards, such as The Platinum Card from American Express, do charge an annual fee for additional cards.

Supplementary Credit Card Sign-Up Bonuses

Typically there is not a sign-up bonus or welcome offer for adding a supplementary card user. If you want to enjoy credit card bonuses, you must apply as the primary account holder.

Supplementary Credit Card Earnings and Redemption Rates

The earnings rates for supplementary credit cards are the same as the rates for the primary credit cardholder. Because the primary cardholder is financially responsible for all charges, they will receive the benefits of all rewards, regardless of which account makes the charges.

Who Needs a Supplementary Credit Card?

A supplementary credit card can be useful for someone who does not meet the credit card requirements to qualify for a credit card on their own.

For instance, you can get a supplementary card for a child to help them establish credit. Adding them to your account also offers an opportunity for you to teach them the ins and outs of using a credit card responsibly.

You might also add a trusted friend or family member to your account to help them build their credit score although this will depend on the primary cardholder keeping the account in good standing. Another reason you might add an authorized user to your account is to allow them to take advantage of travel or other benefits when you are not with them.

It’s also possible to add someone as an authorized user without actually giving them a card. This can allow them to enjoy the benefits to their credit score without the risk that they’ll overspend or otherwise use the card irresponsibly.

Pros and Cons of Supplementary Credit Cards

While there are benefits to supplementary credit cards, there are also downsides that are worth noting. Consider these pros and cons.

Do Supplementary Credit Cards Affect Your Credit Score?

Yes, using a supplementary credit card can affect the credit score of both the primary and the secondary user. Depending on how a credit card is used, the effects could be either positive or negative.

If all cardholders on the account use their credit card responsibly, a supplementary credit card can have a positive impact on their credit scores due to how credit cards work. However, if the supplementary cardholder makes charges that the primary cardholder can’t repay, both of their credit scores could go down. Similarly, if the primary cardholder fails to make on-time payments, that could hurt the supplementary cardholder’s credit rather than helping it.

This is why it’s important that both cardholders are on the same page when it comes to credit card rules and best practices.

Recommended: When Are Credit Card Payments Due

How Much Do Supplementary Credit Cards Cost?

In most cases, there is no charge for adding supplementary credit cards or authorized user cards. However, some credit card issuers do charge an additional fee for adding supplementary cards. Make sure to check with your issuer before ordering one.

Applying for a Supplementary Credit Card

Because any supplementary credit cards are tied to the account of the primary cardholder, you can’t apply for a supplementary credit card directly. Instead, the primary cardholder will need to request an additional card directly from the issuer.

To do so, the primary cardholder can either call the customer service number listed on the back of their credit card or request an additional card through their online account or app.

Alternatives to Supplementary Credit Card

Opening a supplementary credit card can be a good way to help a family member build their credit, but it does come with some risk. One alternative to giving someone a supplementary credit card is to open a supplementary credit card account but keep the actual card.

With this arrangement, the authorized user gets the advantages of a supplementary account — namely, building their credit through the primary cardholder’s responsible use — without the risk that they will use their card irresponsibly.

The Takeaway

Supplementary credit cards, or authorized user cards, are additional cards tied to the credit card account of a primary cardholder. When used responsibly, they can help the authorized user build or establish credit. However, the primary account holder is responsible for all charges made by supplementary cardholders, so there is also some risk if the supplementary credit card is used irresponsibly.

Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.

FAQ

Are bills paid with the card number of the primary or supplementary card?

The card numbers of the primary and supplementary cards are both tied to the primary cardholder’s account. As such, the primary cardholder is responsible for all charges made, including by authorized users.

Is a supplementary credit card the same as a joint card?

A joint credit card account allows two people to use the same credit card account, with both account owners holding responsibility for all charges made to the account. In contrast, a supplementary credit cardholder is not responsible for charges they make. Instead, only the primary cardholder is financially responsible for all charges made by any user.

Who is responsible for a supplementary credit card?

Only the primary account holder is responsible for charges made by any and all authorized users. Any secondary or supplementary cardholders are not considered financially liable for any charges they make.

Does a supplementary card affect credit score?

Yes, having a supplementary card can affect your credit score. It can help build credit when used responsibly. But because the primary cardholder is ultimately responsible for all charges, their credit could suffer if an authorized user uses the card irresponsibly. An authorized user could also see their score suffer if the primary account holder fails to manage their account responsibly.

Photo credit: iStock/MixMedia

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

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Credit card residual interest is interest that builds up between when your billing cycle ends and when the issuer actually receives your payment. Read on to learn more about what is residual interest, when it may apply, and how you can avoid it.

What Is Credit Card Residual Interest?

Residual interest, also called “trailing interest,” is one of the ways credit card companies make money. It’s a finance charge that’s applied to any balance that is carried over to the new billing cycle.

The charges accrue from the date your statement was issued until the bank receives your credit card payment.

How Credit Card Residual Interest Works

If you thought you paid your last credit card bill in full, you might be surprised to see a residual interest charge on your next statement. However, this can occur if you keep a rolling balance on your credit card, meaning you’ve carried an unpaid portion of your credit card balance from month to month.

Some credit card issuers charge interest based on a daily periodic rate. To calculate your daily periodic rate, the issuer divides your APR (annual percentage rate) by 360 or 365 days. Then, it adds the result to your daily balance.

Here’s where credit card rules around interest get tricky, so take a closer look:

•   Your card issuer is required by law to provide you with your billing statement at least 21 days before your credit card payment due date. If you always make on-time full payments, your card issuer typically won’t charge interest during this “grace period.”

•   However, if you’ve been rolling over a balance to your new statement, trailing interest on the old charges are applied. You’ll also lose your grace period for new purchases made during the billing cycle so interest charges accrue immediately. Each day that the balance goes unpaid, the residual interest compounds.

•   Since this residual interest is added during the days after your billing statement was sent, they can feel like unexpected credit card charges on your next billing period despite making the “full” payment the prior month.

Do All Credit Cards Charge Residual Interest?

Generally, the practice of charging residual interest is common across credit card companies. However, how and when it charges trailing interest varies between issuers.

If you’re unsure how your card issuer handles this type of interest charge, review your credit card agreement, or contact your issuer directly to learn more about its terms.

Why Is It Important to Keep Track of Residual Interest?

Residual interest can impact your finances in many ways. For starters, you’ll owe more money on interest fees and miss out on a grace period. Additionally, a residual interest charge can easily slip past your radar if you thought you’ve zeroed-out your credit card balance.

If you didn’t add new card purchases during a billing period, you might not even look at your new statement and can easily miss a residual interest charge. This seemingly small issue can snowball into a late payment — or worse, a missed payment — that adversely affects your credit rating.

Recommended: Does Applying For a Credit Card Hurt Your Credit Score

Tips for Avoiding Credit Card Residual Interest

To avoid this costly mistake, make sure you’re practicing smart habits when using a credit card responsibly.

Making the Full Payoff Amount

Given how credit cards work, the best way to know your card’s true outstanding balance is to directly ask your credit card issuer for your “full payoff amount.” Since residual interest is charged daily, your full payoff amount will change each day your account goes unpaid.

On the day you’re ready to make your credit card payment, contact the phone number on the back of your credit card. Ask the associate for your full payoff amount to date. Or look for this information on the credit card issuer’s website or in their app. This is the payment amount you can make toward your bill to fully pay your account.

Paying Your Bills on Time

If you haven’t carried a balance between statements and your credit card offers a grace period, making a payment for the full statement balance by the credit card’s due date is enough to prevent residual interest. This can also help you maintain your grace period.

If you’ve already rolled over a balance, pay off your total account balance before the billing cycle closes. This can help you avoid trailing interest charges that start between the date your statement is sent and when the bank receives your payment.

Considering a Balance Transfer to a 0% APR Card

A 0% APR balance transfer card can be a useful tool if you have a balance that’s too large to pay off early or in one fell swoop. Balance transfer cards effectively allow you to pay a credit card with another credit card by transferring the prior balance onto the new card at no interest.

Keep in mind that the promotional interest rate is only valid for a short period of time. For example, the transferred amount might incur no interest for six months or a year, depending on the balance transfer terms. After that, the standard interest rate will apply.

When considering this strategy, make sure you weigh the pros and cons of a balance transfer card, such as the cost of a balance transfer fee. This fee might be a fixed dollar amount or a percentage of the amount you’re transferring. Always do the math to ensure that the amount you’ll save on residual interest from your original card outweighs the balance transfer fees.

Recommended: How to Avoid Interest On a Credit Card

How Long Does Credit Card Residual Interest Last?

Typically, if you’re hit with residual interest, it might take about two consecutive statement periods to clear out residual interest charges. However, you can get rid of residual interest faster by contacting your card issuer to request your full payoff amount.

The Takeaway

Carrying a balance into a new statement period results in losing your interest-free grace period on all purchases shown on that statement. You’ll owe residual interest on purchases carried over from the previous cycle, and you’ll also be charged interest immediately on new purchases made within the new billing cycle.

To avoid getting residual interest credit card charges, always pay your entire statement balance in full. By doing so, you can pay less interest (or none at all) on your credit card purchases.

Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.

FAQ

What is credit card residual interest?

Residual interest is the interest that’s charged on purchases you’ve rolled over from one statement into the next. It starts accruing the day after your new billing cycle begins to the date when the bank receives your payment.

Do all credit cards charge residual interest?

Yes, most credit cards charge residual interest when you carry over a balance between billing statements. However, when and how your card issuer applies residual interest can vary; check your card’s terms of agreement to learn more.

How can I pay off residual interest?

If you see a residual interest charge on your credit card statement, the best way to pay it off is by making a payment for the full payoff amount, rather than just the statement balance. This helps you capture daily trailing interest charges as of the day you plan on making a payment.

Photo credit: iStock/fizkes

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A rewards credit card allows cardholders to earn incentives for purchases they make. While the potential benefits of these cards are apparent, maximizing these benefits requires determining which rewards credit card is best for you. That’s because different cards offer different types of rewards and have varying criteria for how to earn them.

Read on to learn more about how these cards work and how to choose a rewards credit card that suits your spending habits.

What Is a Rewards Credit Card?

A rewards credit card offers cardholders bonuses based on their spending. Bonuses can come in many forms, including airline miles, cash back, or points.

The benefits of a rewards credit card will vary based on the card type. For instance, one cash back credit card may offer a flat percentage back on all purchases, while another may offer higher rates in certain categories, such as gas or groceries, and a lower rate across other areas. Meanwhile, another rewards credit card could offer cardholders one or two points for every dollar they spend using the card, which they could then redeem for airline tickets or hotel stays.

Recommended: What Is the Average Credit Card Limit

How Rewards Credit Cards Work

Rewards credit cards operate similarly to how credit cards work traditionally, with the bonus of rewards earned based on spending. These cards offer access to a revolving line of credit that cardholders can use to make payments. Cardholders can use the card to make purchases as long as they stay under their credit limit.

When the cardholder makes a payment by their credit card due date, their revolving credit is restored for the amount of their payment.

Where rewards credit cards differ from other types of credit cards is that a portion of each purchase will go toward the card’s designated bonus, whether that’s cash back rewards or points to use for a hotel stay. Card issuers pay out rewards on a specific term, such as by billing period, on a monthly cycle, or based on spending. Once the rewards hit the user’s account, they can redeem them.

There are a number of ways that cardholders can redeem the credit card rewards they earn. This could include as a statement credit, for merchandise or gift cards, for stays at hotels and resorts, toward airline tickets, as a direct deposit to a bank account, or in the form of a check mailed to the cardholder.

Types of Credit Card Rewards Programs

Rewards credit cards break down into six broad categories based on the earning and redemption processes.

Cash Back

With cash back rewards cards, users get a percentage of “cash back” on every purchase made with their card. Cash back rewards rates are typically around 1% to 2% of every purchase, but some cards may offer higher returns based on the spending category.

Cardholders can redeem cash back rewards in several ways, including as:

•   A credit against the card’s balance

•   Gift cards from select retailers

•   Donations to charity

•   A check sent by mail or direct deposit

Travel Rewards

Credit card issuers also offer general travel cards, where cardholders can earn points or miles through their spending that they can then put toward all manner of travel expenses. This could include everything from car rentals to hotels to flights, effectively allowing the cardholder to use credit card rewards to travel for less.

Typically, general travel cards offer points or miles on any purchase, often at a rate of 1 or 2 miles or points per dollar spent. However, general travel rewards cards may offer 2x or 3x points on specific spending categories, such as dining out or travel.

With general travel cards, users can typically redeem points through the issuer’s booking platform or transfer the value to a partner. Unlike co-branded cards that may restrict where cardholders can redeem their points, general travel cards usually allow redemption at a variety of airlines or hotels.

Points

Credit cards that offer rewards points can provide access to a variety of rewards, including options for cash back or travel redemption. Generally, a base rate of 1 point per dollar spent is offered.

However, the value of points can vary depending on the card issuer and how the cardholder redeems their points. Reward point cards could be redeemed for gift cards, travel, donations, or cash, depending on the issuer.

Gas

Gas cards help users save money on filling up the tank. Typically, these cards only offer rewards or redemptions for purchasing gas at a gas station. A cardholder could redeem their rewards as a statement credit or a discount at the pump.

Hotel or Airline

Hotel and airline-branded credit cards reward users when they spend with a particular company. For instance, booking nights at the same hotel brand could earn a cardholder points, bumping up their status, or give them access to room upgrades or a free night’s stay.

Similarly, airline credit cards reward users for traveling on their airline. They also can include opportunities for status upgrades, and being a loyal airline traveler could lead to receiving perks like lounge access in the airport or free bag check.

Retail

Retail credit cards is a broad designation that encompasses any credit card reward tied to a specific retailer or store. Rewards vary based on the card issuer and the store. However, they could include point-of-sale discounts with every purchase or the chance to earn points to use toward discounts and gift cards at the store.

Factors to Consider When Comparing Rewards Credit Cards

There’s a wide range of reward programs to take advantage of, and the policies of these programs vary from credit card issuer to issuer. This is why it’s important to take the time to compare rewards credit cards. Before applying for any rewards card, it’s worth looking at each of the following factors.

Annual Fees

Some rewards credit cards include an annual fee. This fee could be as low as $50, while other cards’ annual fees may soar into the thousands of dollars a year for super premium cards.

It’s important to consider whether the rewards you earn from the card will offset the cost of a credit card’s annual fee. Depending on how often someone uses the card, and how frequently they redeem rewards, they could determine that the fee is worth it.

Additionally, it’s worth looking into whether the card offers a lucrative opening bonus offer that essentially cancels out the annual fee, at least for the first year.

Interest Rates

Interest rate, or annual percentage rate (APR), is the amount of interest a person will pay on the money they borrow from the credit card issuer. If the credit card holder carries a balance month to month, they may owe interest charges on their outstanding balance.

Currently, the average APR is around 22%, though APRs on rewards cards tend to be on the higher end. A high APR on a credit card could translate to steep interest charges if the cardholder carries a balance. As such, keep an eye on the interest rate when comparing cards.

Tiered vs Fixed Rewards

Tiered vs. fixed refers to the way the card structures its rewards, which is another important consideration to keep in mind.

With tiered rewards, a credit card offers different points or values based on the category of purchase. For example, a travel card may offer more points for a travel-related purchase as opposed to groceries.

Fixed rewards, on the other hand, offer the same rate for every purchase. An example of this is a cash back rewards card that gives cardholders 2% cash back on every purchase, no matter the spending category.

The type of rewards structure that’s right for you will depend on your spending habits. If you know you spend mostly in one category, you could find that a tiered rewards card that prioritizes that category is the right fit. But if your spending doesn’t align with the highest rewards categories, fixed rewards may pay off more.

Cashback Rewards Caps

When researching cash back rewards cards, keep an eye on the fine print around rewards caps. Some cards may cap redemption after a certain amount of spending.

For example, it may offer 3% cash back on purchases up to a certain dollar value, then only offer 1% once the cardholder hits that amount.

If you’re between two cards, the one with the higher cap — or better yet, no cap at all — could help you determine which one will win out.

Guide to Choosing the Best Rewards Credit Card for You

While no two cardholders are the same, many can approach the search for the perfect card by considering the same factors. These include:

Analyzing Your Spending Habits

Where or what a person spends the most on will directly impact which rewards card is the best fit for them.

Here’s an example of how that would play out in the decision between credit card miles or cash back rewards. If someone prioritizes travel and lives near an airport that’s a central hub for one particular airline, they may choose to get an airline credit card that rewards their travel spending with airline miles for future flights.

However, if someone travels very little, they may benefit more from earning cash back on their everyday spending rather than airline miles.

To figure out where you spend the most, look at your credit card and bank statements from the last quarter. Whichever spending category comes up the most may be the best fit for a rewards card. On the other hand, if there are no clear patterns, a standard cash back card may be the right fit.

Checking Your Credit Score

Checking their credit score may give credit card applicants a healthy dose of reality. Most rewards credit cards require a good or excellent credit score, which means a score of 670 or above. Those with a credit score lower than 670 may not be able to qualify for a rewards credit card.

Recommended: Does Applying For a Credit Card Hurt Your Credit Score

Pros and Cons of Rewards Credit Cards

Credit card rewards may sound too good to be true, and in some ways, they are. Here are some rewards credit card benefits and drawbacks:

Making the Most of Your Rewards Card

Ready to reward regular spending? Keep these final tips in mind to make the most of your rewards credit card:

•   Spend within your means. It may feel tempting to overspend when every purchase means more points, but overspending can lead to debt, interest charges, and even a negative impact on credit score.

•   Aim to snag the bonus. Most rewards credit cards offer an introductory bonus when the cardholder hits a certain spending threshold within a specified period. Plan purchases strategically to hit this bonus.

•   Plan card opening around large purchases. Planning a wedding, buying a house, or making a large purchase? It may be the perfect time to open a new card, as a few large charges could mean hitting the bonus.

•   Use rewards wisely. Rewards are only really redeemed when they’re spent. Take time to read up on the fine print around redemption, as there’s often a strategy associated with getting the best value out of card rewards. That may mean redeeming them for a gift card of the highest conversion rate or booking travel through the card issuer’s platform to make miles stretch further.

The Takeaway

Rewards credit card benefits can make them very enticing for many credit card holders. However, consider a card with benefits that “pay” for themselves, meaning the benefits fit within the cardholder’s lifestyle and suit their existing spending habits. A card with a high annual fee and rarely used benefits likely isn’t worth someone’s time or money.

Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.

FAQ

What are the benefits of having a rewards credit card?

The main rewards credit card benefit is earning rewards — whether points, miles, or cash back — from everyday spending. Rewards credit cards can also offer additional perks, such as free credit monitoring, travel insurance, and purchase protection.

Are credit card rewards taxable?

In most cases, credit card rewards are not taxable, as they’re considered rebates or discounts. However, if a credit card reward is given without the user doing any spending to earn it, then those rewards may be considered taxable income.

What credit score do I need to get a rewards credit card?

Most rewards credit cards require a good or excellent credit score in order to qualify. This is typically 670 or higher.

What can I do with credit card rewards?

You can redeem credit card rewards for cash, statement credits, hotel and airline bookings, store discounts, or gift cards. Ultimately, what you’re able to do with your credit card rewards will depend on the type of card you have.

Photo credit: iStock/Hiraman

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If you want to avoid dealing with native currency or carrying traveler’s checks or cash when traveling abroad, an international credit card can be an asset. Having this kind of card in your wallet, which you can use both at home and abroad, can make for smoother trips overseas.

Here’s a closer look at what an international credit card is, its main features, and how to get an international credit card that’s right for you.

What Is an International Credit Card?

An international credit card is a credit card that you can use outside of the United States to make purchases and at an ATM. The major networks that issue international credit cards include Mastercard, Visa, Discover, and American Express.

However, having an international credit card doesn’t mean you can use it anywhere in the world. The countries where you can use a certain card depends on the network. For instance, Mastercard’s international cards can be used in over 210 countries, whereas Visa’s global network spans over 200 countries to date.

Features of International Credit Cards

Besides the fact that you can use the card overseas, here are some of the other features an international credit card may have:

International Chip and Pin

International credit cards feature an international chip and pin. Chip cards, or EMV cards (which stands for Europay, MasterCard, and Visa), add an extra layer of security to transactions.

With the chip and pin feature of international credit cards, you dip your card into the reader, then insert your PIN. This differs from in the U.S., where EMV cards come with chip-and-signature technology, which means you insert your chip and then may input your signature. Chip-and-pin is the standard everywhere else and, as such, this is what international credit cards offer.

Welcome Offer

An international credit card might have a welcome offer, which features an attractive introductory bonus. Typically, with how credit cards work, you’ll need to spend a certain amount on the card within the first few months of opening your account in order to earn the bonus. The amount you’ll need to spend, the time frame in which you’ll need to do it, and the number of bonus rewards points you can earn will vary by card.

Travel Perks

Some international credit cards come with attractive travel perks, such as trip cancellation insurance, rental car insurance, and lost luggage insurance. They might also feature access to exclusive airport lounges around the world.

To qualify for an international credit card with some of these luxury perks, however, you’ll usually need to have a good or even excellent credit score (meaning 670 or above).

Rewards Points

While many credit cards come with the ability to scoop up rewards points, international credit cards might offer a higher credit card rewards rate for travel-related purchases. This might include hotel stays, car rentals, dining out, and booked flights. For example, you might get 5x points on these travel-related purchases, whereas other purchases earn 1x points.

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Credit Card Foreign Transaction Fees

An international credit card might come with a foreign transaction fee, which is a fee that applies when you make a payment with your card in another country. This fee is typically 3% of the total cost of the purchase, and it is charged in U.S. dollars. For example, if your total purchase came to $50, then the foreign transaction fee would be $1.50, for a total of $51.50.

If you’re not careful, foreign transaction fees can easily take a bite into your travel budget. Some international cards might not charge foreign transaction fees, which can put money back into your pocket and help you avoid credit card debt that’s hard to get rid of.

How to Get an International Credit Card

To get an international credit card, follow these steps:

1.    Do your homework to see which cards are most attractive to you. Which have the best perks, lowest fees, and most enticing rewards?

2.    You’ll also want to see which cards you can qualify for. By checking your credit score, you can better determine which cards you might get approved for.

3.    Apply for a credit card. The process of how to apply for a credit card is similar whether or not it’s an international credit card. You’ll usually need to provide basic personal and financial information, such as your Social Security number and details on your income.

4.    Once your application is submitted, the credit card issuer will do a hard pull of your card to determine your creditworthiness, which helps inform whether your limit will be above or below the average credit card limit. Be aware that a hard pull will likely result in a temporary ding to your credit.

5.    Find out if you’re approved. If you are, you can expect to receive your new card in the mail in seven to 10 business days. Your card will have a unique account number as well as the CVV number on a credit card.

Recommended: What is the Average Credit Card Limit

How to Choose the Best International Credit Card

What’s the best international credit card for you will depend on a handful of factors. Specifically, you’ll want to consider:

•   Where you’ll be traveling. Are you planning on using your card on business trips, and do you frequent certain countries for work? If so, there are certain countries or parts of the world where an international credit card may be more widely accepted. Different cards may be accepted in different locations.

•   Rates and fees. Look to see what the APR on a credit card will be. If you are likely to keep a balance, it’s particularly important that you have a good APR for a credit card. The lower the APR, the less you’ll pay in interest when you carry a balance. Also take a look at any other fees that may apply with the card, such as annual fees, late fees, cash advance fees, and, of course, foreign transaction fees.

•   Perks and rewards. Not all credit cards are equal when it comes to the perks and rewards they offer. It’s easy to be dazzled by attractive travel-related perks, but make sure they’re ones you’ll actually use. Also look at the earn rate for different categories, and see if the categories with the higher earn rates are in line with your spending habits. You want to use your credit card responsibly vs. overspending to earn rewards.

Pros and Cons of Using an International Credit Card

International credit cards have pros and cons, both of which are important to weigh.

Pros of International Credit Cards

First, the upsides of international credit cards:

•   Less hassle when traveling: Perhaps the top advantage of using an international credit card is that you won’t need to fuss with native currency or carrying around cash or traveler’s checks. Plus, if something were to go amiss, you have the usual credit card protections in place, which could allow you to dispute a credit card charge or request a credit card chargeback.

•   Opportunity to earn rewards: Many international credit cards allow you to earn rewards for your everyday spending. Plus, some may offer higher rates of rewards for travel-related spending, which could be a big benefit for frequent travelers.

•   Travel perks: As mentioned before, international credit cards can come with a host of travel-related parks. For instance, international credit cards may offer trip cancellation insurance, car rental insurance, and free upgrades on hotels and flight bookings, to name a few.

Cons of International Credit Cards

Next, consider the potential downsides of international credit cards:

•   Fees: Some international cards have high annual fees, though these may translate to more attractive perks. You’ll also want to look out for foreign transaction fees, as these can quickly add to your costs when traveling.

•   Might not be accepted everywhere: Not all retailers within a country may accept payments with an international credit card. Some retailers might still only accept the local currency or certain payment methods. Additionally, international credit cards’ networks may not include particular countries.

•   Need to plan ahead to maximize perks: While international credit cards might come with some nice travel benefits and perks, it can take a bit of work and planning to make the most of them. For instance, if you want to rake in the bonus offer, you’ll need to plan for some big-ticket purchases to put on your card within the first few months of opening it.

Or, if a card features a travel credit that expires each year, the clock is ticking to use that benefit. This all could incentivize you to overspend, leaving you in a scenario where it’s hard to pay off more than the credit card minimum payment.

Recommended: Does Applying For a Credit Card Hurt Your Credit Score

The Takeaway

Having an international credit card in tow while traveling overseas can eliminate the hassle of dealing with foreign currency or carrying cash. When looking for a good that suits your needs, it’s important to weigh the perks against the downsides, particularly the fees involved.

Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.

FAQs

Can I use my credit card internationally?

Yes, if you have an international credit card, you’ll be able to use your card outside of the U.S. Exactly which countries you can use your card in will depend on the network. For instance, MasterCard’s global network includes more than 210 countries, while Visa’s network includes over 200.

Should I withdraw cash with my international credit card?

While withdrawing cash from an international credit card is an option, note that doing so often comes at a cost. On top of the foreign transaction fee, which hovers at around 3%, there’s also a fee that applies to cash advances, and cash advances tend to have a higher APR. Interest on cash advances typically starts accruing immediately, as there’s no grace period on cash advances.

How can I find out which countries accept a given card?

Check the credit card network’s international use network to determine which countries you can use your card in. You may find this on the credit card network’s website or in the app or by contacting customer service.

Do I have to pay fees annually for an international credit card?

Some international credit cards do have an annual fee. Do your homework ahead of time to see what the annual fee is, and if the perks will offset the costs. Other costs you want to check include foreign transaction fees, cash withdrawal fees, and late fees.

Photo credit: iStock/Drazen_

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

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Some credit cards offer a promotional interest rate, as low as 0% APR, for purchases and/or balance transfers. Often, these promotional interest rates are offered for a limited period of time when you apply for a new card, though some issuers offer promotional rates for existing cardholders as well.

If you have a large purchase coming up, or an existing credit card balance that you want to transfer over, these cards can save you a significant amount of interest. You’ll just want to make sure to pay off the full balance by the end of the promotional period, as your interest rate will likely jump significantly when your promotional APR expires.

What Are Credit Card Promotional Interest Rates?

A credit card promotional interest rate is an interest rate that is offered for a limited amount of time, as a promotion. During the promotional period, you’ll be charged a lower interest rate than your typical interest rate.

It’s common for credit cards to offer these introductory promotional interest rates for new members when you open a credit card account. However, it’s also possible for issuers to offer promotional interest rates to existing cardholders.

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How Credit Card Promotional Interest Rates Work

One common scenario for how credit card promotional interest rates work is that an issuer might offer a 0% promotional interest rate on purchases and/or balance transfers for a certain period of time. When you’re using a credit card during the promotional interest period, you won’t pay any interest.

It’s important to note that there are two major types of promotional interest rates, and they vary slightly. With a 0% interest promotion, you won’t pay any interest during the promotional period. If there’s any balance remaining at the end of the promotional period, you’ll begin paying interest at that time. With a deferred interest promotional rate, on the other hand, you’ll pay interest on any outstanding balance back to the date of the initial purchase.

Benefits of Credit Card Promotional Rates

As you may have guessed, there are certainly upsides to taking advantage of credit card promotional interest rates. Here’s a look at the major benefits.

Low Interest Rate During the Promotional Period

One benefit of credit card promotional interest rates is the ability to take advantage of a low or even 0% interest rate during the promotional period. Having access to these promotional rates can give you added flexibility as you plan your financial future.

Ability to Make Balance Transfers

One possibility to maximize a credit card promotional rate is if you have existing consumer debt like a credit card balance. By using a balance transfer promotional interest rate, you can transfer your existing balance and save on interest. This can help lower the amount of time it takes to pay off your debt.

Can Pay For a Large Purchase Over Time

If your credit card has a 0% promotional interest rate on purchases, you can take advantage of that to pay for a large purchase over time. That way, you can spread out the cost of a large purchase over several months rather than needing to pay it off within one billing period.

Just make sure to pay your purchase off completely before the end of the promotional period to avoid paying any interest.

Drawbacks of Credit Card Promotional Rates

There are downsides to these offers to consider as well. Specifically, here are the drawbacks of credit card promotional interest rates.

Deferred Interest

You need to be careful if your credit card promotional rate is a deferred interest rate, rather than a 0% interest rate. Because of how credit cards work with a deferred interest rate promotion, you’ll pay interest on any outstanding balance at the end of the promotional period — back to the date of the initial purchase. This amount will get added to your existing balance, driving it higher.

Penalty Interest Rates

You still have to make the minimum monthly payment on your credit card during the promotional period. If you don’t make your regularly scheduled payment, the issuer may cancel your promotional interest rate. They may even impose an additional credit card penalty interest rate that’s higher than the standard interest rate on your card.

May Encourage Poor Spending Habits

Establishing good saving habits and living within your means is an important financial concept to live by. While it may not always be possible, it’s generally considered a good idea to save up your money before making a purchase. While a 0% interest promotional rate means you won’t pay any interest, it can contribute to a mindset of buying things you don’t truly need.

Recommended: Tips for Using a Credit Card Responsibly

How Long Do Credit Card Promotional Interest Rates Last?

By law, credit card promotional interest rates must last at least six months, but it is common for them to last longer. You may see introductory interest rates lasting 12 to 21 months, or even longer.

Regardless of how long your promotional period lasts, make sure you have a plan to pay your balance off in full by the end of it. Credit card purchase interest charges will kick in once your promotional period is over.

Zero Interest vs Deferred Interest Promotions

Both 0% interest rates and deferred interest rates are different kinds of promotional rates where you don’t pay any interest during the promotional period. However, they come with some key differences:

What to Consider When Getting a Card With a Zero-Interest or Deferred Interest Promotion

One of the top credit card rules is to make sure you pay off your credit card balance in full, each and every month. But if you’re carrying a balance with a promotional credit card rate, you’ll want to make sure you understand if it’s a 0% rate or a deferred interest promotion.

With a 0% promotional rate, you’ll start paying interest on any balance at the end of the promo period. But with a deferred interest promotional rate, you’ll pay interest on any balance, back-dated to the date of the initial purchase.

In either case, the best option is to make sure that you have a plan in place to pay off the balance by the end of the promotional period.

Paying off Balances With Promotional Rates

You’ll want to have a gameplan for how to pay off your balance before the end of the promotional period. That’s because at the end of the promotional period, your credit card interest rate will increase significantly.

If you still are carrying a balance, you will have to start paying interest on the balance. And if you were under a deferred interest promotional rate, that interest will be calculated back from the initial date of purchase.

Watch Out for High Post-Promotional APRs

Using a 0% promotional interest rate can seem like an attractive option, but it can lull you into a false sense of financial security. You should always be aware that the 0% interest rate won’t last forever. Your interest rate will go up at the end of the promotional period, and if you’re still carrying a credit card balance, you’ll start paying interest on the balance.

Exploring Other Credit Card Options

There are some other credit card options besides getting a card with a promotional interest rate. For instance, you might look for a credit card that offers cash back or other credit card rewards with each purchase.

Before focusing on credit card rewards or cash back, however, you’ll want to make sure that you first focus on paying off your balance. Otherwise, the interest that you pay each month will more than offset any rewards you earn.

If you’re carrying a balance, you can also attempt to get a good credit card APR by making on-time payments and asking your issuer to lower your interest rate. By simply securing a good APR, you won’t have to worry about it expiring and then spiking like you would with a promotional APR.

The Takeaway

Some credit cards offer promotional interest rates to new and/or existing cardholders. These promotional interest rates could be a 0% interest rate for a specific period of time, or a lower interest rate to encourage balance transfers.

While taking advantage of promotional interest rates can be a savvy financial move if you have existing consumer debt or need to make a large purchase, you’ll want to make sure you have a plan to pay off your balance in full before the promotional period ends. That way, you avoid having to pay any interest.

Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.

FAQ

Will my interest rate spike after a promotional deal ends?

Yes, generally credit card promotional interest rates last only for a specific number of months. The way credit cards work is to charge interest on balances that are not paid off. So, while your credit card may charge 0% or a lower promotional rate for a period of time, the interest rate will rise once the promotional period is over and will apply to any outstanding balance on the card.

How does promo APR work?

Promotional APR offers are generally put forward by credit card companies as a way to entice new applicants. Cards may offer a 0% introductory APR for a certain number of months on purchases and/or balance transfers. Once the promotional period is over, your interest rate will rise to its normal level.

Should you close a credit card with a high interest rate?

Having a credit card with a high interest rate will not negatively impact your credit or your finances if you’re not carrying a balance. So, simply having a high interest rate is not a reason, in and of itself, to close a credit card. But if you have a balance on a credit card with a high interest rate, you might want to consider doing a balance transfer to a card with a promotional 0% interest rate while you work to pay it off.

Is my credit card’s promotional rate too good to be true?

Promotional interest rates are a legitimate marketing strategy used by many credit card companies. While you shouldn’t treat them as a scam, you also need to make sure that you are aware of the terms of the promotional rate and how long the rate is good for. Make a plan to completely pay off your balance by the end of the promotional period before your interest rate increases.

Photo credit: iStock/Jakkapan Sookjaroen

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