What You Must Know About Using a Credit Card Overseas

Credit cards are great because you don’t have to carry large sums of cash and there is consumer protection if lost or stolen. So, they are the best way to pay for purchases during your travels. However, there are some caveats:

*The card may not be accepted everywhere so be sure to take a widely accepted credit card, such as VISA or Mastercard.

*Be careful about taking a card with a high or unlimited credit limit.

*Transaction fees can be high, so check around and get a card that offers minimum or no foreign transaction fees (or you may pay as much as 3% for the privilege of using your card).

*Between transaction fees and exchange rates, it is best to minimize cash transactions. Try to plan how much you’ll need and just make one transaction at a bank with the best exchange rates.

*Let your cardholder know your travel plans. Otherwise, your card may be blocked overseas for “suspicious activity.”  Some card companies automatically block them and some may suddenly “freeze” your account because you are charging more than
usual (since they don’t know you’re on vacation!).

*You may need your passport to verify your identity with European merchants. They are on a chip-and-pin system there whereas we have not caught up to that technology yet in the U.S. We still have magnetic strips that are swiped. There is a chance that even with proper I.D. that your card may be declined, depending on their policies.

*If you pre-booked tickets, such as a theater or train ticket, the vendor may require you show the credit card you used to book
the tickets. So, be sure to use a credit card you plan to take with you during your travels.

*Make sure that you’re not near your credit limit and that your payments are current. You don’t want to be halfway around the world and have your card declined.

*Scrutinize bills. If it is in another language and currency that you cannot decipher, be careful about signing it. Find someone to
help you if in doubt. You don’t want to overpay. For example, the tip will automatically be included on your bill in many places around the world. Also, you want to know if VAT (value added tax) was added to your purchase.

A quick word about ATM’S and Travelers Checks…

Travelers checks are great but some places no longer accept them or charge a fee to cash them, so do a little research on your
particular destination to find out.

I try to avoid ATMS because of the restrictions: finding a machine, safety concerns about withdrawing large sums of cash from a machine, concern over my PIN number being revealed, a PIN number that won’t work overseas because it is too long, unknown transaction and exchange rate fees, and language barriers (does that mean from “checking” or “savings” account?).
Instead, consider using a pre-paid debit card that is not associated with your bank accounts or go inside a bank and have a teller assist you.

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