Credit Card Tips for International Travel
We are entering the peak of the travel season. Americans making international trips know that the dollar has dropped in value, adding to the cost of overseas travel and
purchases.
When making international purchases, consumers should be aware that the credit card used can add an additional 3% to the cost of the transaction.
"We often get questions about the cost of using a credit card for international purchases," says Bill Hardekopf, CEO of LowCards.com. "Like many fees for credit cards, it varies by issuer and can be confusing for consumers. If you have several cards, it is a good idea to compare the foreign transaction fees before you get on the plane. Since this is charged on every purchase that you make with your card, you
can save a few dollars by using the card with the lowest fee."
Visa and MasterCard charge a 1% processing fee. Then, the issuing banks add their own fee. This fee is charged after the conversion to U.S. dollars. Many cards charge 3% for the foreign transaction fee. However, Capital One and Discover absorb the processing fee and they do not charge a fee for foreign transactions.
Keep in mind that transactions you make with your credit card in a foreign currency (one other than U.S. dollars) will be converted to U.S. dollars. For example, a purchase that costs $200 Euros is converted to $314 US dollars. The
transaction fee will be charged as a percentage of $314 (Currency exchange fluctuates from day to day).
Here are examples of the foreign transaction fee that some
credit card companies charge:
* Capital One- Does not charge a foreign transaction fee
* Discover- Does not charge a foreign transaction fee. Keep
in mind that Discover is not accepted in many countries. If
you plan to use Discover, make sure it is accepted where you
are going. It is currently accepted in parts of Canada, the
Caribbean, Central America, Mexico, and China.
* Citibank-3%
* JP Morgan Chase-3%
* Bank of America-3%
* American Express-2%
* HSBC-3%
If you need cash, your best bet is always a debit card. Many
places in foreign countries have ATMs affiliated with Visa
and MasterCard. Before you leave, check to see if your debit
card issuer partners with a bank in the countries where you
are traveling. If you use ATMs from a partner bank, they may
waive the ATM usage fee which typically ranges between $1.50
to $5 . Keep the transaction receipts in case you need to
mail these in to your hometown bank to get them refunded.
You can use your credit card to get cash advances at ATMs
outside of the U.S., but this is not recommended because you
will be charged a 3% cash advance fee and a fee for ATM
usage, and possibly other finance charges.
Here are six tips for using a credit or debit card overseas:
1. You might want to charge larger purchases. Credit cards
typically provide good exchange rates so it could be cheaper
to charge a large purchase rather than paying for it out of
pocket. However, most cards also charge a 3% foreign
transaction fee so you might need to do a little math to see
if it is worth it. Also credit cards will provide you with
some protection if the product is defective or you have
other problems with the purchase when you get home.
2. Use debit cards at ATMs for cash. Debit cards used at
ATMs offer good exchange rates, but sometimes come with
fees. The typical surcharge is between $1.50 and $5 per
transaction. Some also add foreign transaction fees. Ask
your bank if it has banking partners that waive the fees.
Also ask your bank what you should do if the ATM only
recognizes four-digit PINs.
3. Do not use your credit card at an ATM to get a cash
advance. Cash advances charge significant transaction fees
and surcharges. Unlike regular purchases, cash advances
command a steeper interest rate that begins accruing
immediately.
4. Know the exchange rate. Local banks and some hotels are
the best places to exchange currency.
5. Keep some local currency and traveler's checks for
emergencies. It is a good idea to have some of the local
currency with you when you get off the plane.
6. Notify your bank and credit card issuer that you are
leaving the country.
purchases.
When making international purchases, consumers should be aware that the credit card used can add an additional 3% to the cost of the transaction.
"We often get questions about the cost of using a credit card for international purchases," says Bill Hardekopf, CEO of LowCards.com. "Like many fees for credit cards, it varies by issuer and can be confusing for consumers. If you have several cards, it is a good idea to compare the foreign transaction fees before you get on the plane. Since this is charged on every purchase that you make with your card, you
can save a few dollars by using the card with the lowest fee."
Visa and MasterCard charge a 1% processing fee. Then, the issuing banks add their own fee. This fee is charged after the conversion to U.S. dollars. Many cards charge 3% for the foreign transaction fee. However, Capital One and Discover absorb the processing fee and they do not charge a fee for foreign transactions.
Keep in mind that transactions you make with your credit card in a foreign currency (one other than U.S. dollars) will be converted to U.S. dollars. For example, a purchase that costs $200 Euros is converted to $314 US dollars. The
transaction fee will be charged as a percentage of $314 (Currency exchange fluctuates from day to day).
Here are examples of the foreign transaction fee that some
credit card companies charge:
* Capital One- Does not charge a foreign transaction fee
* Discover- Does not charge a foreign transaction fee. Keep
in mind that Discover is not accepted in many countries. If
you plan to use Discover, make sure it is accepted where you
are going. It is currently accepted in parts of Canada, the
Caribbean, Central America, Mexico, and China.
* Citibank-3%
* JP Morgan Chase-3%
* Bank of America-3%
* American Express-2%
* HSBC-3%
If you need cash, your best bet is always a debit card. Many
places in foreign countries have ATMs affiliated with Visa
and MasterCard. Before you leave, check to see if your debit
card issuer partners with a bank in the countries where you
are traveling. If you use ATMs from a partner bank, they may
waive the ATM usage fee which typically ranges between $1.50
to $5 . Keep the transaction receipts in case you need to
mail these in to your hometown bank to get them refunded.
You can use your credit card to get cash advances at ATMs
outside of the U.S., but this is not recommended because you
will be charged a 3% cash advance fee and a fee for ATM
usage, and possibly other finance charges.
Here are six tips for using a credit or debit card overseas:
1. You might want to charge larger purchases. Credit cards
typically provide good exchange rates so it could be cheaper
to charge a large purchase rather than paying for it out of
pocket. However, most cards also charge a 3% foreign
transaction fee so you might need to do a little math to see
if it is worth it. Also credit cards will provide you with
some protection if the product is defective or you have
other problems with the purchase when you get home.
2. Use debit cards at ATMs for cash. Debit cards used at
ATMs offer good exchange rates, but sometimes come with
fees. The typical surcharge is between $1.50 and $5 per
transaction. Some also add foreign transaction fees. Ask
your bank if it has banking partners that waive the fees.
Also ask your bank what you should do if the ATM only
recognizes four-digit PINs.
3. Do not use your credit card at an ATM to get a cash
advance. Cash advances charge significant transaction fees
and surcharges. Unlike regular purchases, cash advances
command a steeper interest rate that begins accruing
immediately.
4. Know the exchange rate. Local banks and some hotels are
the best places to exchange currency.
5. Keep some local currency and traveler's checks for
emergencies. It is a good idea to have some of the local
currency with you when you get off the plane.
6. Notify your bank and credit card issuer that you are
leaving the country.
Posted by Lynn at
5:00 PM
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