While cash is always necessary, utilizing a credit card for your shopping requirements may greatly ease international travel. You won’t have to deal with currency conversions, and you won’t have to pay excessive overseas transaction fees if you use the correct credit card.
Pickpockets will be less of a danger as well, not just because credit cards are simpler to hide and keep secure, but also because even if your card is taken, you will not lose money. Simply declare your card lost, and you’ll be excused from any unlawful transactions.
However, merely having a credit card does not make foreign spending less expensive. You may make that objective a reality by following these four steps before you depart and while traveling.
- Credit cards make it easier to spend money when traveling since cash is inconvenient, conversion rates are difficult, and cash is often lost or stolen.
- If a credit card is stolen, it may be quickly suspended and replaced.
- Check the international fees and limitations on your credit card.
- Use a credit card with no international transaction fees.
- Inform your card issuer of your vacation intentions ahead of time so that they do not presume your card has been stolen and used without your permission.
1. Use a Credit Card with No Foreign Transaction Fee
Many, but not all, credit card companies levy fees for transactions made with a foreign merchant when traveling abroad. These costs, which normally run from 1% to 3% of each transaction, might result in you spending substantially more than the quoted price of anything you buy abroad. This may quickly mount up over the course of a journey. 1
Check your credit and debit card agreements before you leave to determine whether such costs are included. If they do, apply for a credit card that does not charge international transaction fees, as well as a debit card that does not charge extra for ATM withdrawals in other countries. Apply early enough to allow for approval, account setup, and getting your new card in the mail.
Overseas transaction fees may also apply to online purchases made from your home country if the seller is foreign and processes the transaction in its local currency. Keep this in mind when booking hotels and day excursions before your vacation. 1
2. Call Your Credit Card Issuer Before Leaving
Once you have the necessary cards, notify your issuer of your trip intentions and get a number to contact for help while abroad. This will not only prevent your cards from being stopped due to suspicious behavior, but it will also provide you with a free means to contact your issuer if anything comes up. 2
Some card companies no longer require cardholders to notify them of impending travel. For example, American Express employs fraud detection technologies to detect when cardholders are traveling. Amex does advise you to maintain your contact information up to date in case they need to reach you while you’re gone. Before you go, check with your credit card provider to determine whether you need to alert them. 3
3. Avoid Dynamic Currency Conversion
Avoid dynamic currency conversion, a credit card function that enables you to make a credit card transaction in a foreign nation using your home currency. Some of us, at least while shopping, have difficulty mentally connecting foreign currencies to the US dollar. At the checkout counter, foreign retailers take advantage of this fact by offering to quote the total amount in US dollars and, unknown to visitors, converting at an uncompetitive exchange rate. 1
It is really easy to avoid these unneeded charges. Simply refuse to sign any cheque or receipt that is not written in the local currency.
If you’re concerned about calculating the cost of meals and things while traveling, just review conversion rates before leaving or download a mobile app on your phone that will perform the math for you.
4. Memorize Your PIN
Since the use of chip-and-PIN technology, certain credit card terminals, mainly in Europe, have required the cardholder to provide a personal identification number (PIN).Before you leave town, make sure you have one set up and remembered. 4
In certain nations, merchants still employ the less advanced magnetic stripe method. As a consequence, if you don’t have sufficient identity, shops in these markets may refuse to take your credit card. You should be alright as long as you have your passport with you. Merchants merely want to ensure that the individual using a credit card is the one who is allowed to do so. 5
Chip cards, also known as EMV cards, were introduced in Europe in the 1990s to allow safe payments. The United States has just recently begun to completely use chip cards. 4
The Bottom Line
While traveling abroad may be both complex and costly, there are strategies to reduce the expense and bother of spending abroad. You should be able to prevent post-trip credit bill shocks if you use a credit card with no foreign transaction fees, advise your credit card provider of your travel intentions, and only pay for transactions stated in terms of the local currency.
Finally, a journey abroad should not be defined by concerns about currency conversion and managing foreign currency. So, before you go, obtain the perfect cards and enable your concentration to transfer to its proper place: having a good time or getting down to work.
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