0% or travel card?

SMTID

I apologise if a similar topic has been covered somewhere but I could really do with advice on this. I do not, and never have, used a credit card. I understand the basics of how they work but nothing more.

For the first time in my life I need to get one as I am going on holiday in a few months and my hire car contract requires me to provide a credit card in my name for the deposit, which is a few hundred Canadian dollars.

I had read the articles on this website and assumed a 0% credit card would be the best, however now I've discovered there are credit cards that are better for travel. Given that the only reason I want a credit card is to use it for care hire abroad - and the money will be returned at some point - which would I be best going for? And is it possible for me to transfer in the money that the hire car company blocks on my account so that I don't get charged interest for it, then take it back out at a later date (this question probably shows just how ignorant I am on this subject!

Any help would be greatly appreciated.

MorningcoffeeIV

You're probably not going to have a choice.

Assuming you can repay in full, or within a short period, then Forex fre would be better.

But for your first card, you'll probably just need to take whatever you can get and hope you get a sufficient limit 

You won't be charged interest on any ringfenced sums.

Nebulous2

You wont be charged interest on money which a car hire company has put a hold on, you'll only be charged interest on money which has actually been paid. Even then you'll get up to 56 days interest-free to pay it off. 

Paying money into the card in advance is called front-loading. It is against the terms and conditions of most credit cards. You might get off with it, but you might not. It isn't worth risking it. 

Whether a 0% or a travel card is best might not be relevant. These are known as 'prime' cards and if you've never had a credit card before you could be rejected for one. People often start with a credit-builder card, which comes with fewer perks. 

If you intend spending on it while you are there a travel card would probably be best. 

SMTID

Thanks for the advice. The hire car hold is all the card would be used for so I might just get a normal credit card from my bank. As mentioned I don’t really know how they work but my wife has explained it to me now and it makes a bit more sense!

400ixl

You have two ways of paying for the hire car, upfront or at the rental office.

You do an advance booking for both, with the upfront the rental cost will get charged at the time of booking. You then pay this off in full within the next statement period (up to 56 days) and get no interest charges. When you then turn up to the rental office you use the same card for the hold, this is just a reservation against the card and after so many days is released by the hire company. As no charge is made, there is no interest to pay.

The only difference with the pay at rental office is that you do not pay in advance, but present the card at the office when you collect the car. They then charge for the rental and put a hold on, this means the available balance has to be able to cover both. You get the statement period to pay off the balance and the hold will drop off when released by the hire company.

Paying the hire in advance is usually cheaper than at the rental office in constant currency terms. You may gain or lose out if the rental is in local currency and the exchange rate changes between booking and collection if you go down the pay at rental office route.

Something like a Halifax Clarity Credit Card should fit the bill. Some hire companies will also accept debit cards, but that does mean you need to have the balance in the account and it will be reserved for this purpose, which can take some time to come off the account.

It is often a requirement that the same card is used for both the payment and the hold, so it will likely be needed for both, and if the rental is in local currency then a credit card from your bank may charge exchange fees (or give very poor exchange rates) in comparison to a travel credit card.

MrFrugalFever

If you have a limited credit history then try the eligibility checker for 118 money credit card. Credit limit of up to £1,200 (more than enough for what you need) and 0% foreign transaction fees.

A travel credit card isn't just available from prime lenders.

As the payment will be held in suspense, you should not be charged any interest for it and others have said, if you did spend on the card, when you get your statement just pay in full and again no interest will be charged. Don't pay the statement in full or withdraw cash from an ATM and you'll be landed with a chunky bit of interest the following month!