Tips for Traveling Internationally with a Credit Card

Tips for Traveling Internationally with a Credit Card

August 1, 2018         Written By Bill Hardekopf

Planning a trip abroad? Fortunately, your credit card will work in the most popular international travel destinations. However, if you are traveling to less-frequented countries, you may need to convert currency or purchase traveler’s checks in order to make purchases during your stay. Thus, before booking your flight and other travel plans, you will want to do some research to see whether payment card systems have fully infiltrated your destination country.

Even if credit cards are widely accepted where you are going, there are still some considerations to keep in mind before setting out on your trip to ensure your trip goes as smoothly as possible.

Tip #1: Pack a Visa or Mastercard

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While American Express and Discover are growing in popularity internationally, Visa and Mastercard are accepted almost everywhere. Thus, if your go-to credit card is an American Express, you may also want to bring a Visa or Mastercard as a backup for your trip. You will want to limit the number of credit cards you take with you though, should you lose your wallet you do not want to lose everything. Select the best international credit card which is usually the one with no foreign transaction fee and possibly even travel rewards.

No matter what your primary card may be, it is a good idea to bring a backup, just in case your primary card is declined for some reason. It is embarrassing enough to have that happen at home—imagine being in a country where your grasp of the language and culture may be slim! You will also want to keep every single receipt from when you travel, just in case you arrive home and find you were charged more on a purchase. Carefully review the receipts upon your return to verify the correct amounts and to confirm that you do not have any unauthorized charges on your account.

Tip #2: Take a Travel Rewards Credit Card

Since you will be racking up travel costs, such as restaurant purchases, rental cars, and hotel stays, it is a good idea to take a travel rewards credit card. Most travel cards will offer rewards for spending in those categories, which is great when traveling. You may also be able to find cards that offer rewards and do not have a foreign transaction fee. These cards should be your go-to card when traveling internationally.

You will most likely want to charge larger purchases to your card while you are traveling. 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, if your card charges a 3% foreign transaction fee 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.

Tip #3: Call Your Card Issuer Beforehand

International purchases can raise a red flag with your card issuer, as they may think your credit card is being used fraudulently, which would lead them to decline transactions and place a freeze on your account. Thus, it is important to call the customer service line and let them know ahead of time where you plan to travel and the duration of your trip. Many credit card issuers offer an automated line to report international travel. If for any reason the destination or duration of your trip changes you will want to call again and give them an update for their records.

If you are abroad and need cash you should be aware that using a credit or debit card at foreign ATMs can come with its fair share of fees. Before departing, ask your bank what the charges are to use your card at “foreign” ATMs. In addition to the international transaction fee, the ATM may also charge its own fee for withdrawals. If you plan to use your debit card, contact your bank to see if they have partner banks in the areas you are traveling to. These partner banks may waive the withdrawal fees. Bank of America is a member of the Global ATM Alliance Bank that waives the fee if your bank is a member.

Be careful where you use your credit card as it could open you up to identity theft or fraud. Use common sense in selecting the merchants and the ATM machines. There is nothing worse than having your credit card information stolen overseas and dealing with that nightmare while traveling. If you lose your card or believe it has been stolen while traveling and your bank has a mobile app, you may be able to lock your card from purchases until the bank can cancel it and issue another. If you do not have the option to lock it from your mobile app, be sure to call the bank so they can place the freeze on the account as soon as possible to limit any potential fraudulent charges before they happen.

In case you run into any problems, take down the phone numbers for contacting your issuer from outside the United States before your trip begins. That way you are not scrambling to find phone numbers should you need to call for any reason.

Tip #4: Read the Fine Print

You will also want to read the fine print of your credit card agreement. Many creditors offer travel protections for their cardholders. In case a disaster arises, it is good to know what sort of travel insurance or other services your card offers so you can be prepared.

The card user agreement will also state whether you will be accessed a foreign transaction fee. Most cards charge a 3% fee, which means you will need to pay $30 for every $1,000 you spend abroad. It may not sound like much, but it is best to avoid fees whenever possible. There are a number of cards with no foreign transaction fee available to avoid that cost when traveling.

Before you leave the country or order anything from a merchant that is not based in the United States, it is a good idea to call your issuer and ask about the foreign transaction fee. You can save yourself some money by using a credit card that doesn’t charge a fee for foreign transactions.

If your card offers rewards for spending in certain categories, make sure you know what categories so you can use your cards to maximize your rewards when traveling.

Tip #5: Bring Cash

Since there is no way of knowing whether a small local merchant will take credit cards, it is a good rule of thumb to have some of the local currency. If you find the perfect gift for someone at a small vendor, you do not want to pass on the purchase simply because there is no way to pay with a credit card. Also, depending on where you are traveling and for what reason, gratuity may be common practice so you will want to carry some small bills in the local currency if possible.

Know the exchange rate. Local banks and some hotels are the best places to exchange currency. Keep some local currency and traveler’s checks for emergencies should they arise. It is a good idea to have some of the local currency with you when you get off the plane if possible.

Additional Tips to Consider

Many international merchants are moving away from the traditional swipe credit cards and toward cards with chips used for payments. Make sure you research the area you are traveling to and confirm that they still accept traditional credit cards. If they do not, contact your card issuer to see if they can supply you with a chip and PIN card. It would be unfortunate if you arrived at you destination to find that your credit card would not be accepted due to the fact that it is using outdated technology. It may take a few days to a couple of weeks for your card issuer to send a new card, so you will want to check with them as soon as you can before your trip deadline arrives.

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 (this example may not reflect current exchange rates). The transaction fee will be charged as a percentage of $314 USD and not the $200 Euros. This is also important to keep in mind when you get home and begin reviewing your account for transactions and fees.

Travel with your card on you and not in a checked bag. Although it may not happen often, bags do miss flights and you might end up in a foreign country with no bag and no way to pay for things you need.

If you follow these tips outlined above you should not run into any issues paying for things on your trip, use your best judgment and use your cards wisely when you travel internationally.

The information contained within this article was accurate as of August 1, 2018. For up-to-date information on any of the terms, cards or offers mentioned above, visit the issuer's website. Many of the offers on this article are from our affiliate partners, and LowCards.com may be compensated if you take action with any of our affiliate partners.

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About Bill Hardekopf

Bill Hardekopf is the CEO of LowCards.com and covers the credit card industry from all perspectives. Bill has been involved with personal finance for over 15 years. He is a frequent contributor to Forbes, The Street and The Christian Science Monitor.