Five Things to Know Before Using Credit Cards

Here are five things to know before using credit cards when traveling outside the U.S. These include little known perks and hefty fees:

Consumer Travel Protections

Some credit cards offer consumer protections for delayed flights and lost luggage. Additionally, they provide trip cancellation insurance and accident coverage. Yeah!

This is my secret to avoiding jet lag!

Access Airport Lounges

If you have a high limit credit card, such as AmEx Black Card (or a travel credit card) you probably have free access to some airport lounges as part of your card privileges. These lounges offer complimentary drinks, food, showers, newspapers, privacy, WiFi, and comfy seating options. Awesome!

One of the most important “Five Things to Know Before Using Your Credit Card”:

Fraud Alert Protection

These days, you need to notify most card companies about your travel plans so that they do not block or freeze your account. They do this when they suspect fraudulent activity, such as your card being used in unusual places or too many transactions during a day. The fraud alert protection is a good thing as long as you have notified your card company so that you are not blocked from using your card!

This is the booking site I use most for travel!

Choose the Right Card

Make sure the country or countries you are visiting widely accepts the card you plan to use. Visa, Mastercard, American Express, and Discover credit cards can be used internationally. However, Visa and Mastercard credit cards are more widely accepted abroad. Also, most European countries only accept chip cards (not magnetic strip or “swipe” cards).

FYI: Make sure you know your PINs for all cards you plan to use during your travelers. It is advisable to travel with two credit cards in case you have a problem with one. One should have a higher limit in case of an emergency.

#1 on my list of Five Things to Know Before Using Credit Cards when traveling is:

Credit Card Fees

Foreign Transaction Fees. A foreign transaction fee is a surcharge assessed by a credit card issuer when you make a purchase in a foreign country. Not every credit card issuer charges this fee. Foreign transaction fees generally cost 1% – 4% of the total transaction cost. So, if you charge $100 in a foreign country, you may also pay $1 to $4 extra in fees. This may not seem like much, but it can add up over multiple days and charges.

FYI: You may also pay a foreign transaction fee when shopping online with an international vendor. Any time your purchase is routed through a foreign bank, a foreign transaction fee will likely occur.

Currency Conversion Fees. A foreign transaction fee is comprised of a currency conversion fee (also known as a network fee) and a bank fee.The currency conversion fee is the charge assessed by the credit card network. This is a fee for converting your money (or credit) from U.S. dollars to the currency of the country you’re in. If it is a bank-issued credit card, such as a Capital One or Chase credit card, they add their fees on top of the network fee.

Dynamic Currency Conversion Fees. Some foreign merchants may offer to convert the local currency to U.S. dollars for you before you pay. Just say no! While this option lets you see how much money you’re actually spending right then rather than when you get your statement down the road, dynamic currency conversion fees are exorbitantly expensive—as much as 12%.

Annual Fees. Some credit cards will charge you an annual fee for “perks” such as airline miles, hotel points, travelers cheques, and no foreign fees. Do not use those issuers. There are many companies who do not charge annual fees yet still provide these perks.

This is the best way to find and book local, reputable & unique activities, daytrips & tours in the U.S. & worldwide!

Last of the five things you must know before using credit cards outside the U.S. is an alternative to credit cards:

Best Credit Card Alternatives (also known as Mobile Wallets)

You will need your phone and the app installed to use the two best alternatives to credit cards:

ApplePay works internationally in many places, especially in Europe and Asia. It is free.
GooglePay. Google Pay can be used in nearly three dozen countries, including the U.S., Spain and in the U.K. Google Pay is free.

What About ATMS?

You may pay several fees when you use an ATM in a foreign country, such as an out-of-network fee, ATM operator fee, and a foreign transaction fee. The amounts charged depend on your bank and the ATM operator, but they can add up. If your bank charges $2 to $5 for using an out-of-network ATM plus 3% of the amount withdrawn, and the operator charge you another $5, this means you pay $13 in fees to withdraw $100 in foreign currency.

Check out my travel books!

To Avoid ATM fees

Use an ATM in your bank’s international network.
Use your debit card to get cash back at a store instead of using an ATM.
Use a bank that doesn’t charge international ATM fees.
Also, exchange cash before you leave home or at a reputable cash exchange bureau.
Some checking accounts have debit cards you can use overseas without being charged usage fees.
Use your travel credit card or Mobile Wallet option instead.

Find out what other travelers have to say before booking your trip!

A Final Word…

Times are changing. Travelers cheques have given way to mobile wallets. Swiping magnetic strips has changed to inserting microchips and “tapping” cards. No annual fee travel rewards credit cards took the place of high fee airline credit cards. We now use Venmo and PayPal and Stripe instead of currency. But cash is still very relevant when traveling. So, before your next trip, make sure you have what you need in your wallet or on your phone.

Click here to check out my BEST TRAVEL REWARDS CREDIT CARDS REPORT!