Ariana Arghandewal, Bankrate.com
Credit cards are widely accepted in most parts of the world. This is great for those who want to maximize their rewards when traveling abroad. Not only do many cards offer generous rewards for travel spending, they also offer convenience and an additional layer of protection in case your trip doesn’t go as planned.
In most cases, using a credit card is better than using cash. However, if you are planning on using your credit card overseas, you may still have issues, so plan accordingly.
Can I use my credit card overseas?
In most cases, yes! There may be different banks in the country you are visiting, but many of the common payment networks in the US are widely accepted around the world. Some credit cards, most commonly credit cards, do not have foreign transaction fees and earn rewards for certain purchases around the world, such as restaurants. This will save you money and earn rewards while traveling.
However, it is important to know that this does not mean it will always work while the card can be used overseas. If your card is worn out or tends to break down a bit at home, it can be cranky even abroad. Alternatively, if your credit card issuer doesn’t know that you are traveling, they may assume that your identity will be stolen and refuse your purchase. Some payment networks are also less common overseas. Luckily, there are workarounds for some of the most common issues you may encounter.
Bankrate Tips
For tips and insights on increasing your savings and maximizing your trip, see Bankrate’s Travel Toolkit.
How to make your credit card work overseas
A small number of factors can prevent your credit card from working abroad. Most of them have simple solutions and require a little advance planning.
– Use widely accepted publishers. Visa and MasterCard are the most widely accepted credit card payment networks around the world. American Express and Discover can be useful in many situations, but just to be sure, we recommend bringing your backup visa or MasterCard while traveling abroad.
– Use chips and pincards or digital wallets. Chip and Personal Identification Number (PIN) cards are standard in many countries around the world. These cards use microchips and pins to verify transactions, rather than cardholder signatures. Instead of swiping the magnetic stripe into the card reader, the consumer inserts the card into the machine and enters the pin associated with the chip. If your wallet has a card with a tip, set the pins to prevent problems using it overseas.
Digital wallets are also becoming the norm for storing credit, debit cards and even flight boarding passes. They often have a lower risk of loss or theft, leading to faster and safer payments. So it might be beneficial to set up one and add a card. This allows you to hide your physical cards as backups.
-Not available at the travel planning bank. If you book part of your trip with a credit card, you usually don’t need to notify the bank. If you do not use a credit card to book, providing advance notice of your travel plan will reduce your chances of your bank reducing your transactions overseas. Knowing that you are in Paris for a week, your bank is less likely to refuse to buy at the patisserie. They will know that your credit card is not compromised – you are just a tourist.
Is it worth using a credit card overseas?
Yes, using a credit card abroad offers security and convenience that is not the case with cash. You may earn a reward on every purchase. This can be saved and redeemed for future travel experiences. The items you purchase may also be covered by purchase protection, giving you peace of mind. More importantly, you have a lot of cash and don’t have to worry about the security risks it poses.
You will need to bring cash to cities for small purchases or the major payment forms that it is accepted, but credit cards offer stronger protection and other additional benefits.
Are there any fees for using a credit card overseas?
When using a credit card overseas, two types of fees will be incurred when using foreign transaction fees and sales fees. Foreign transaction fees are around 3%, and many travel reward cards exempt them, so you can avoid them.
Sales fees include additional charges or convenience fees for using your card. These fees help offset the processing costs of merchants and can vary from 3% to 8%. These charges help offset the cost of additional protection received from your credit card.
Unfortunately, there is not much that consumers can do about these fees. You can avoid it by paying the fee, using cash, or shopping elsewhere. Still, there are small ways to save money when using your card.
Whenever merchants ask if they pay in US dollars or local currency, always choose their local currency. Credit card issuers may offer much better conversion rates than local business owners.
It also always opts out of dynamic currency conversions. This allows cardholders to process their home currency transactions when they are shopping or making money from the ATM. You may be able to know the actual price of your purchase, but due to the extra cost, the purchase will be higher than otherwise.
Conclusion
What you stuff in your wallet is just as important as what you carry on board when you travel abroad. You would like to bring one or more credit cards with you using a widely accepted payment network. Better yet, bring something that offers purchases and travel protection, generous rewards and travel perks. You may run into some issues when paying for purchases using a credit card, but there are workarounds. By following safe usage practices, you don’t have to carry large amounts of cash or worry about reducing your transactions.
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