You’re going abroad, and you’ve got money on your mind. Specifically, you’re wondering how your credit card will work when you’re traveling abroad. Here are a few questions you might have about your using your credit card overseas or across the border.
Why should I use my credit card abroad?
There can be big advantages to using your credit card while traveling. For one, it helps you carry less cash, which is one way to combat pickpockets. You also don’t have to convert your currency, as your card will do it for you.
If you’re worried about losing money on the exchange rate, know that your card provider will likely give you a better deal than you’ll get at a bank.
Our pick for use internationally
Gold Delta SkyMiles® Credit Card from American ExpressRead more
Compare credit cards with no foreign transaction fees
While traveling internationally, be sure you have a credit card that doesn’t charge foreign transaction fees. Thankfully, you’ll find that the best travel credit cards waive these fees.
A-Z list of credit card use by country
So, should I just use my credit card for everything?
Though a credit card can be convenient, you might not want to solely rely on it when traveling. Some merchants at your destination may not accept credit cards, preferring that you pay in cash instead. This could be the case at a lot of small mom-and-pop shops and restaurants.
More broadly, it’s helpful to know whether your destination is credit card friendly. Card acceptance varies country by country, and even city by city. For example, you can probably use your card everywhere you go in Sweden, but you’ll need lots of cash in Germany. And if you go to China, you can easily use your card in Beijing, but you may be out of luck in smaller cities.
All said, carry both a credit card and cash when you travel. Your card will make transactions more convenient, and cash will cover you in a pinch.
Tips for using a credit card abroad.
- Contact your bank well before your travel date to inform them you’re going overseas.
- Check your current cards’ expiry dates to see if you need any new or replacement credit cards.
- Consider taking a chip credit card with you as they have extra security features.
- Ask your bank to provide a PIN for your credit card as some countries only accept transactions that can be confirmed with a PIN.
- Carry a debit card or prepaid card in addition to your credit card for situations where credit might not be accepted. Also, debit cards have no cash advance APR if you decide to make ATM withdrawals.
- Consider a credit card with no foreign transaction fees. Some credit cards have up to a 3% fee of the amount of each transaction made abroad. Avoid such cards to save money.
- Consider getting a credit card with complimentary travel insurance. Depending on the card, you can get trip cancelation insurance, travel accident insurance, car rental insurance and more.
- Set up internet banking so you can manage your accounts at home easier. Plus, you can monitor your account for unauthorized charges.
- Set up regular credit card payments to avoid any late fees while you’re traveling.
- Never let your credit card out of your sight. Otherwise, your card information could be compromised.
- Ensure the merchant only swipes your card through one machine and if you suspect any foul play, contact your credit card issuer immediately.
- Call your bank immediately if you lose or misplace your credit. This can help ensure no one else will use it, and most issuers can provide you with a replacement card even abroad.
- Make inquiries about if you can get a higher credit limit in the case of an emergency.
- Keep all receipts until you have had a chance to reconcile your credit card statement.
- Don’t write your PIN down, and, if you change it, don’t use your birth dates or any other personal recognizable date.
- Be aware your balance will be affected if a hotel or hire company has performed a temporary transaction on your account. The charge will eventually be reversed.
- Take contact details for your bank, your bank account numbers, phone numbers for lost and stolen cards. Back these up with a copy of all the number you may need in your email account.
Will my credit card work overseas?
If your card has only a magnetic stripe, it might not be accepted overseas. That’s because many countries have upgraded to chip-and-PIN cards. You use these chip-embedded cards by entering a PIN (or personal identification number) when you buy something.
Your card may be a chip-and-signature card, in which case you’ll sign for your purchases when using your card abroad. Even still, there may be some instances where your chip-and-signature card won’t be sufficient. For example, you may need a chip-and-PIN card at an automated ticket machine, where there’s no one to take your signature. (The good news, however, is that many machines offer signature options once they detect your card isn’t a chip-and-PIN.)
If you don’t have a chip card, it’s highly advisable to get one — many merchants won’t accept magnetic-stripe cards. You’ll should be fine with a chip-and-signature card, but a chip-and-PIN card is ideal.
Chip credit cards you can apply for
Here are a few chip-and-PIN cards you can apply for:
What fees should I know about?
Pay close attention to foreign transaction fees, currency conversion fees, cash advance fees and ATM fees.
Foreign transaction fees
Many cards will charge a foreign transaction fee, which is a fee assessed when you use your card abroad. It’s usually 3% of each transaction.
To avoid this fee, look for top-notch travel cards like the Chase Sapphire Preferred® Card, Barclaycard Arrival Plus and The Platinum Card® from American Express. These cards charge no foreign transaction fees.
Currency conversion fees
You’ll pay a currency conversion fee when a foreign merchant converts your bill into dollars, instead of charging you in the local currency. This is called dynamic currency conversion, and it’s expensive. If a merchant offers it, say no and save yourself the currency conversion fee.
Cash advance fees
When you take out cash with your credit card, you’ll probably be charged a cash advance fee. This is a flat rate or a percentage of your transaction. For example, the Chase Sapphire Preferred® Card fee is either $10 or 5% of the transaction (whichever is higher).
On top of that, you’ll start paying interest immediately. So, avoid using your credit card to get cash — use your debit card instead.
Even if you have a debit card, your bank will probably charge you fees when you take out cash from a foreign ATM. The ATM company itself may also charge fees.
You do have options to avoid these fees. The Schwab Bank High Yield Investor Checking Account, for example, is a popular option for avoiding ATM fees. You can use your debit card for cash withdrawals, and you’ll be reimbursed for any fees you incur.
Capital One’s 360 Checking also doesn’t charge for ATM withdrawals (though you won’t be reimbursed for fees charged by ATM operators).
How should I prepare before my trip?
Before going abroad, make a few preparations to ensure that you can use your credit card with no problems.
- Get a credit card with no foreign transaction fees. Foreign transaction fees can be a downer on vacation, but they’re easy to avoid if you pick the right card.
- Highly consider getting a Visa, Mastercard or American Express. These brands are more likely to be accepted abroad (especially Visa and Mastercard). You may be able to use Discover cards at some locations, but you’ll find that many merchants won’t accept it.
- Give your card provider a heads-up. Your card company hates fraud, because it loses them money. If they see a foreign transaction on your card, they may put a hold on your account for suspicious activity. To avoid this, give your provider a quick call letting them know where you’ll be traveling.
- Know who to call if you have a problem with your card while traveling. Your card might get stolen while you’re traveling, or you could lose it. In these cases, you’ll need the right number to call for a replacement card. Make sure the number is local to your destination.
- Know where you’ll get cash once you arrive. Even if you have a credit card, it’s smart to have cash on hand. So you don’t waste time or money, plan out beforehand where you’ll get your cash. Check if your bank has international partnerships that allow you to use some ATMs for free.
Before you head out on your next trip, have answers to these questions:
- Which credit cards will I take? Consider taking at least two. Make sure they’re chip cards and don’t have foreign transaction fees.
- Do I understand the fees I might encounter? Knowledge is power — and it can save you a lot of money on your travels.
- Have I made preparations with my card provider? Keep your card provider in the loop, and know what number you’ll call if you run into trouble abroad.
- What’s my plan for cash? Have a debit card ready, and know which ATMs you’ll get cash from.
Once you’ve made these arrangements, you’re all set to use your credit card on your next trip. Safe travels!