Using Credit Cards While Traveling - What You Should Know
Looking to take an extended vacation overseas? Maybe if you’re a student you have plans to spend Spring Break ‘08 in Cancun this year? There may be something you haven’t thought about. You may not be aware but your credit card could have extra transaction fees associated with every purchase you make. So before you take out the plastic, you should know about your card’s overseas fees.
To the joy of credit card companies everywhere, credit cards are becoming more accepted in a growing number of countries around the world. When once only hot-spot tourist destinations like Paris and Barcelona accepted credit cards, many more places off the beaten path are starting to accept plastic also, such as eastern European countries, the Middle East and India, just to name a few. For those who are wary of carrying gobs of foreign cash or traveler’s checks with them, credit cards provide a useful alternate for travelers.
Credit cards companies will slap you with a fee for every overseas purchase you make. It depends heavily on your card’s policy and the issuing bank but the average fee is usually around 3%. The fee usually breaks down like this: 1% toward foreign usage and the remaining 2% for the currency exchange charge. Your bill may have a line item dedicated to your international purchases or each individual purchase may have the charges included.
If you decide to take credit cards with you on your trip, make sure to call your credit card companies first to find out their fees and policies toward international usage. Only take the cards with the lowest fees, and then only limit yourself to one or two cards so as to limit your loss if they are stolen or lost.
If you are a frequent traveler, it might pay to get a traveler-friendly credit card. Capitol One provides the best foreign-travel reputation because they continue the popular policy of charging zero conversion fees and they absorb the 1% fee that Visa and MasterCard charge to process purchases.
If you are curious on how cards compare or are preparing for an upcoming trip, check out the currency conversion chart on Bankrate.com. The currency conversion chart, which compares different credit card issuer’s fees, is a very useful tool for future travelers.
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