Should You Be Using Your Credit Card Abroad?
When travelling overseas, you may consider using your credit card abroad to enjoy the convenience they come with. You won’t have to deal with multiple currency conversions every time you want to make purchases. That way, you can save on transaction fees.
Credit cards are fast, easy, and more secure than carrying around foreign money. Even if your card gets stolen, you can still get another one. But if you don’t know how to use your credit card abroad, you may end up paying unwanted fees without knowing.
So what is the best way to use your card overseas? This guide explores the tips and ideas for using credit abroad without hefty charges. Keep reading to learn more.
Is Using Your Credit Card Abroad Possible?
Yes. You can use your credit card in most countries overseas for dining out, shopping, or paying entrance fees in tourist attraction sites. In fact, you can use a credit card in a foreign country like you would use it in your home country.
The good news is that most ATMs abroad will allow you to withdraw cash using your credit card. However, that may only be possible when you tour big cities. When you visit rural areas in foreign countries, you may need cash to make small transactions.
Tips for Using Credit Card Abroad without Charges
Credit cards are acceptable in most countries overseas. But before you travel and start using your card, you need to master the following tips. They will help you save money.
Use Widely Accepted Credit Cards
Consider using a Mastercard or Visa credit card accepted globally to transact in foreign countries. If service providers in foreign countries accept credit cards, your Mastercard or Visa will be a good bet. The deal is to ensure that your credit is accepted globally.
Other credit cards with an established international presence are American Express and Discover. However, only a few merchants accept them. Although they have partnered with many banks and payment networks abroad, bring a Mastercard or Visa for backup.
Choose a Credit Card That Has No Foreign Transaction Charges
Most credit card issuers apply hefty fees for purchases and withdrawals done overseas with foreign merchants. While the fees often range from 1-3 percent of every purchase, you may pay more when making multiple transactions abroad.
So before you leave your home country, review your credit card agreements to check if they have such fees. If the charges are applicable, consider getting a credit card that has no foreign transaction fee. Ensure that you apply for it early to avoid future delays.
Notify the Card Issuer About Your Trip
After getting your credit card, notify the card issuer about your travel plans. If it suddenly shows transactions thousands of miles away from your home country, the card issuer may consider them suspicious. You can alert your card issuer through their websites.
However, some card issuers don’t require you to notify them when travelling overseas. American Express is an excellent example as it uses fraud technology to detect when cardholders travel worldwide. However, they may need you to update your contact info.
Limit Dynamic Currency Conversions
Credit cards that offer dynamic currency conversions allow you to make credit card purchases in foreign countries using your home country’s currency. Unfortunately, such transactions can be costly if you don’t understand the fees linked to them.
Some foreign merchants may take advantage of you and give quotes in your home currency. As a result, they may charge high exchange rates to unsuspecting travellers. So, consider completing transactions in a local currency and not your home’s currency.
Avoid Using Credit Cards for ATM Withdrawals
When in a foreign country, you can get tempted to withdraw money from an ATM using your credit card. Unfortunately, that is one of the most expensive withdrawals abroad. Besides a foreign transaction fee, you may also pay the cash advance fee and interest.
The interest rates on cash withdrawals are usually higher than those applied to credit card purchases. Besides, most credit card issuers don’t offer a grace period for ATM withdrawals made overseas. So, interest will start rising right after withdrawing funds.
Carry Some Cash as Backup
When travelling to a foreign country, don’t expect every merchant or service provider to accept credit card payments. In many countries, cash is still the most popular payment option. For example, 73 percent of payments in Europe were made in cash in 2020.
If you lose your credit card in a foreign country, cash can help you settle your payments. For that reason, bring some cash with you during international travel and a copy of your identification card or passport. Keep them separate from your credit card.
Memorize Your Credit Card PIN
With the advent of PIN technology, most credit card terminals, especially those based in Europe, may require you to enter your personal identification number (PIN) to complete transactions. So, ensure that you memorize your PIN before jetting into a foreign land.
Notably, service providers in some countries still use conventional magnetic stripe technology for identification purposes. That means you won’t use your credit card when you visit such places without proper identification. In this case, your passport could help.
Carry Two Credit Cards during Your Trip
You can stick to using one credit card at home. However, when travelling to a foreign country, consider bringing an extra credit card to avoid problems when one fails to work. Also, even when one of your cards gets declined, the other one will serve as backup.
Consider carrying cards with extra travel rewards. The rewards can save you a lot of money when they are redeemable in a foreign country. Finally, diversify the credit cards by ensuring they use different payment networks—for example, Visa and Mastercards.
Using your credit card abroad can help you minimize your travel costs because it fosters convenience. All you need to do is ensure that you explore all the credit card options to find what works best for you. Also, be conversant with all the foreign transaction fees and additional charges. Most importantly, take advantage of credit cards with rewards.