People who are planning to do any sort of international traveling are probably going to take at least one credit card with them on the trip if for no other reason than they want the security of being able to access money in case of an emergency during their travels. Anyone who will be doing this type of traveling should know that there are both good things and bad things about using your cards during international travel.
Here are seven things that you should be aware of when taking your credit cards out of the country:
1. Not all credit cards are accepted everywhere. You should do some research into the destination where you are traveling to find out which credit cards are commonly accepted at the places (hotels, restaurants, stores, attractions) where you are most likely to want to use them.
2. You will be charged a foreign transaction fee. The credit card company (such as Visa or Mastercard) and the bank that issued the credit card to you will both charge you a fee anywhere from 1% to 3% of each transaction that you make in a foreign country. This can cause the costs of international travel to be much higher than you had budgeted for.
3. Credit cards make it easy to stay organized with your spending. The great thing about using a credit card instead of cash for any type of travel is that you can always check your balance and see how much you have spent so far so that you can adjust the rest of your trip’s spending accordingly and keep your travel costs down.
4. The exchange rate is good. When you purchase an item on a credit card in a foreign country, the purchases will be exchanged at what is called the interbank exchange rate which is the best exchange rate that you can get so you may save money when using credit cards instead of cash in some areas.
5. Your account may be put on hold. Some credit card companies see you suddenly spending a lot of money in a foreign country and put a hold blocking use of the card while they check for fraud. If you’re going to be traveling internationally with your credit cards then you should call the company and let them know so that they won’t do this to you.
6. Protections on some cards may be lower. You travel to a foreign country and the hotel charges you twice for one night. In the U.S. you would have little trouble getting the second charge removed but you may find that it’s not as easy to deal with when the charge occurs in a foreign country.
7. Rewards can add up quickly. If you have a travel rewards card then you are likely to get a lot more rewards during international travel than you would during domestic travel which is a nice perk.
Traveling with credit cards is a smart thing to do even when traveling internationally but make sure that you understand all of the pros and cons that are involved in the use of credit cards for foreign travel.