Taking credit cards along on ones travels can be a convenient alternative to travelers checks. Along with the convenience there are certain benefits to using credit cards overseas, including purchase protection and the ability to snap up a valuable souvenir when short on cash. However, along with the benefits there are issues which can cause a holiday headache.
Frozen cards
It is quite common for a credit card provider to freeze a card when it is used overseas as the potential transaction denotes an unusual use of the card. It is recommended to contact the credit card company before travelling and advise them of ones itinerary. However, the card may still be frozen as the provider could assume the card has been stolen during travel. It makes sense to carry two cards in case one is frozen. Also, always ensure the toll free numbers of the credit card company are carried in case a card is frozen or stolen.
Foreign exchange fees
Using a credit card abroad can add substantial charges to the credit card statement. Check with your credit company before traveling exactly what charges they levy for credit card use abroad. Many card providers charge foreign exchange fees in addition to fees to use cash point machines. It definitely pays to shop around before traveling and apply for a credit card with no fees, or low fees, for foreign exchange commission.
Cash advances
Every cash advance attracts interest from the moment it is requested. This can be avoided by pre-paying the credit card prior to travel.
Choose local currency option
When using a credit card for purchases abroad some retailers and hotels offer the option of paying in ones own currency rather than local currency. Whilst it may appeal to view the transaction in dollars, refuse the option. According to Bank Rate, “in some cases, card issuers are assessing the fee for transactions conducted on foreign soil or with foreign entities, even if the transaction takes place in U.S. dollars.” The conversion rate used may be high. It is a simple matter to refuse to sign any receipt which is not issued in the local currency.
Also not everywhere will accept credit cards overseas, making it prudent to carry some local currency concealed on ones person.
Use cards safely
It pays to keep ones credit card in sight and not let waiters take cards out of the card holder’s presence. Be vigilant when using a credit card in a machine to ensure no one is photographing the pin number. Never carry the pin number. Ensure travel safety precautions are adhered to in order to reduce the risk of card theft.
Using cash wherever possible reduces the costs associated with using credit cards abroad. If this isn’t practical then consider using a credit card free of foreign exchange charges and avoid cash advances. The last thing one wants after returning home is the additional headache of a huge credit card bill.