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What Is The Best Travel Credit Card For a London-Based Expat?

by on February 2, 2014 · 17 comments

in Credit Cards, Sunday Reader Questions, Video Blog Post

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TPG reader Jeff is moving from Chicago to London and thinking of switching loyalty from United to another airline and is wondering what his best credit card options are:

“My wife and I are relocating from Chicago to London for two years (work rotation). I currently travel for work in the US and have platinum status with United. As such, we also have the United Explorer card. I won’t be traveling as much in the UK, and given the points devaluation that is about to happen we are considering closing the United card and opening something new that will have a more practical purpose for traveling out of London.

I know you rank the Barclaycard Arrival high but do you think it may be worth looking into the British Airways Visa? We’d receive 50,000 Avios as an introductory bonus. Considering most of the travel we’ll be doing will be done as cheap as possible I’m not sure we’d be able to use the points on airlines like Ryanair. Anyway, any thoughts or suggestions you had on the matter would be great.”

Just traveling abroad can be stressful, but moving abroad is even more so, and there are a lot of factors to consider, including the airlines you’re going to be flying and which credit cards you should be carrying.

Jeff is rethinking his loyalty to United after their massive miles devaluation yesterday, especially because he’d likely be taking advantage of their partner awards due to living in Europe and flying carriers like Lufthansa, which just skyrocketed in price.

The MileagePlus Explorer Card will no longer charge foreign transaction fees.

The MileagePlus Explorer card is a good option if you can maximize the benefits, but not from an earning perspective.

So Jeff wants to know whether switching to British Airways would make sense for him. While the Chase United Explorer card would be great if you were flying on United and taking advantage of its benefits like free checked bags and priority boarding, especially if you don’t have elite status. But from an earning perspective, a card like the Chase Sapphire Preferred is a better option since you earn 2.14X points per $1 on dining and travel including United ticket purchases rather than just 2X miles per $1 on the Explorer – and you can then transfer those Ultimate Rewards points to United at 1:1 if you so choose and you’re already doing 7% better than with the Explorer card. And that’s not even including the option to transfer those points to other partners like British Airways and Virgin Atlantic or Hyatt as well.

There are 10 great travel transfer partners of Ultimate Rewards.

Why settle for just United miles when you can transfer to 10 partners including BA?

Given Jeff’s situation, I think you are better off having the option to transfer to your old standby, United, as well as the UK-based carriers you think you’re likely to fly – BA and Virgin – with one of the Chase Ultimate Rewards cards including the Sapphire Preferred, but also the Ink Plus or Ink Bold if you want a business card.

The British Airways Travel Together Ticket.

The British Airways Travel Together Ticket is a great benefit.

Now, the British Airways Visa is a pretty good card that currently carriers a 50,000-Avios bonus when you spend $2,000 in 3 months. When you spend $30,000 in a calendar year, you also get a “Travel Together” Companion Ticket, which will incur some large fees when transiting through London but can still be a great value if you use it on business or first class awards. Just note that your travel must be roundtrip and commence in the US for the companion ticket.

That card’s earn ratio is also pretty good at 1.25 Avios per $1 on all purchases and 2.5 per $1 on BA purchases, so you’re earning more than the 1 United mile per $1 on the Explorer card.

It really just depends on your needs, and Avios’ value can vary from decent to very good depending on how you maximize BA’s partners and its distance-based awards by flying throughout Europe on expensive short-hauls. However, I’d say that overall if you’re not going to be able to hit the Companion Pass threshold, then you’re probably better off with the Sapphire Preferred thanks to its everyday earning potential and the fact that you can transfer those points to United, British Airways and Virgin Atlantic, that that might be just the versatility you need from your points. The good news is, none of these cards have foreign transaction fees, so you’ve got a lot of great choices.

Good luck with the move!

Let me know if you have any other questions by messaging me on Facebook, Tweeting me or emailing me at [email protected]

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

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  • Raffles

    Erm … unless these cards all have zero FX fees then they are all useless, as everything he buys will have a 3 per cent surcharge added. He would also be paying a dollar bill with a Sterling salary incurs further fees.

    I also guess the Chase voucher is only valid for ex US departures.

    A far more sensible idea is the UK BA Amex which has a 241 valid ex London and of course bills in £.

  • Mike G.

    The CSP has no foreign transaction fee. In addition to everything TPG said, it’s also great for Jeff’s situation because you can redeem points through their travel mall at a discounted rate, or even just get a statement credit. Thus, low-cost airlines like RyanAir are still in for rewards through the card.

  • mv

    i tried looking at the british airway chart but couldn’t figure out how to get from america to africa and how many points it would cost. also trying to figure out if i could get from south america to africa using avios points. only looking for a one way ticket. help!?!?!

  • thepointsguy
  • thepointsguy

    None of the cards I talk about in this post have foreign transaction fees.

  • Nick Knight

    The problem with the BA companion ticket is it round trip for flight departing from the USA. If you live in the UK, it won’t do you much good.

  • Jain

    Good Explanation, THANKS !!

    I have a question on similar lines, I am moving from Kansas City to Canada in Summer for 2 years. Do you any tips when comes to collecting miles and points. I am wondering if I will be able to open similar cards in Canada which I have in US because they will be based on Canadian credit history, essential doubling my miles for each kind of card. That is obviously if those cards are offered in Candra e.g., United Explorer USA which I have and got 50K and United Explorer Canada which I could potentially get 50K. Will it also be beneficial to keep a US address ?

    Sorry for the long question but I am really looking forward to some advice.

  • Matt

    Having just recently done the same thing, US cards become a pain in the a** after a while. We used the Amex global transfer program to use our US credit to establish credit on an Amex billed in sterling and having full chip and pin. You have a selection of uk based cards to choose from, including MR cards. The BA card got us thru the first few months with chip and signature. United miles are great for getting back to the US to see F&F.

  • Manc

    Wouldn’t he be better off with AA? Considering the taxes paid on BA flights, I would say the current CITI AA offer of 100k miles is a good option.

  • Alex

    I lived in London for a year and charged all my expenses on US-based credit cards. Definitely get a few cards before you move. Get the BA card for the BA points that can be very useful when traveling within Europe. Get one of Capital One cards – Venture is the best if you generate enough spending. Definitely bring at least one AmEx card – whether from AmEx or Citi or Barclays – you will come across web sites that will not take US-based Visa/MC but will gladly accept AmEx.

  • Sid

    Jeff – I moved to London a year ago from Seattle and have effectively been living off my US cards (CSP and BA visa). If you’re in London, having BA miles is fantastic because of their extensive route network of nonstop flights from London and low mileage requirements for flights (Paris/Amsterdam etc are 9000 miles + £35). Load up on the points before you leave, and keep your US address to apply for any special offers that come up.

    Also try to keep a membership rewards account open in the US – UK cards earn 1 MR point per £, and I’ve transferred UK membership rewards points to my US account – they transfer at the exchange rate, so 1000 UK points = ~1650 US points.

    Make sure you read Raffles’ blog (headforpoints.com – it’s got a ton of very useful advice). As he says, you’ll have to pay your US cards using USD – I’d recommend using sites like transferwise.com for much better forex rates than regular banks.

    One final piece of advice – try to get a bank account sorted before you move here. Setting up an HSBC premiere account in the US makes opening one here straightforward.

    Good luck with the move :)

  • Sid

    Oh and re: the Chase 2-4-1 voucher – it’s only valid for US-based Exec club accounts, so make sure you use it before you switch your account to the UK.

  • ExpatRan

    One major factor that has been omitted here is the fact that you will be paying a retail exchange rate on all your overseas purchases. You didn’t think that banks were not charging foreign transaction fees out of the kindness of their hearts did you? Hell no! They wrap it up in the exchange rate they give you on each purchase.

    So while you may not be being charged an extra fee, you will be paying an 3-5% more over the actual exchange rate. Factor this in to your points per dollar formula and you’ll probably find that it’s not worth using your US based card in the UK. Your best bet is to use a good British points card and pay in pounds. Even though you may not rack up as many points as your American card can, you won’t be paying a higher exchange rate on every purchase.

    Source: Was an American expat in London for 6 years.

  • ExpatRan

    You have to factor in the FX rate though. You will be paying a higher exchange rate than you would if you were paying in Pounds (or local equivalent). While there are no ‘fees’ per se, the devil is in the exchange rate they decide to charge you at. I guarantee that it would not be a good ROI to use American points-based cards abroad for extended periods of time.

  • Christian

    Not true, at least not with Chase. I’ve compared on the day exchange rates from my card statement and oanda when filling out expense reports, and there’s no markup. You do pay 3-5% if you choose to pay in US dollars.

    Even if there was a markup, you’d still come ahead with a US card since you earn 64% more points because a UK card earns 1 point per GBP while a US card earns 1.64 points (at today’s exchange rate) per 1GBP. On top of that, UK cards only earn points on full GBP amounts, i.e. a 1.99GBP transaction earns 1 point.

    The only time I use a UK card is at self checkouts in supermarkets, where they make you sign, for example Sainsbury’s does, Waitrose doesn’t.

    UK cards – just say no, except maybe for an extra round of signup bonuses…

  • Patty

    The BA card has an Amex version for UK customers. I have CSP but am debating between the UK BA card and US BA card. If the travel companion ticket requires originating from the US, then the value is not so great for a London-based expat.

  • ExpatRan

    Good to know! I didn’t have a Chase card until relatively recently so thanks for the insight!

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