A Little Bit of Credit Card Maneuvering Can Save You a Lot of Money Abroad

A Little Bit of Credit Card Maneuvering Can Save You a Lot of Money Abroad

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By Odysseas Papadimitriou

You can count on a few things happening each year as winter begins to turn into spring. The weather will get warmer, the sound of bat meeting ball will begin to ring out from parks around the country, the smell of fresh cut grass will once again grace your nostrils and people will begin planning spring and summer vacations. This time of year is rife with renewed energy and enthusiasm, and if you are one those people lucky enough to have a trip on the horizon, this excitement is only heightened. It’s important not to get too carried away, however, because there are a number of very important tasks you must accomplish in making sure your getaway doesn’t get away from you financially.

Sure, it’s important to use travel sites like Kayak and Expedia to get the best rates on airfare, rental cars and hotels, but you probably already know that. What you might not be aware of is the importance of picking the right credit card for your trip, particularly if you’re going to be travelling abroad.

Transaction Fees

Unbeknownst to many travelers, credit card companies typically charge foreign transaction fees of around 3 percent for each purchase made with a credit card while abroad. Such fees stand to make already pricey vacations even more so and can sure put a sour taste in your mouth upon opening your post-vacation credit card bill. However, there are ways to protect yourself from foreign transaction fees.

Following in the footsteps of Capital One, credit card companies are increasingly credit cards with no foreign transaction fee. All you must do to avoid this needless travel cost is open such a card and inform your bank of your travel plans so your account does not get suspended due to suspicious charges while you’re overseas. While it’s commonly assumed that this feature is only available on credit cards for excellent credit, this is, in fact, not the case. Spending vehicles across the credit spectrum, from secured cards to rewards credit cards, are available with no foreign transaction fees, so you should be able to find one that meets your needs.

Avoiding Theft

Using a credit card, of any kind, will also eliminate some of the hassle and danger in traveling abroad. First of all, pickpockets are less of a concern because it’s easier to hide a card somewhere safe than it is cash. Credit cards also have fraud protection, meaning you won’t lose any money even if your card is stolen. Secondly, when equipped with a credit card, you don’t have to worry about how much money to exchange and at what exchange rate.

Still, whether you use debit or credit, you must be careful when signing receipts in foreign stores. Merchants often suggest that you transfer the total amount of your purchase into dollars in order to better understand the cost. While you might think that this service would be helpful, it’s actually not helpful because merchants usually charge hefty conversion fees. You’ll therefore surely understand the cost of your purchase, but incur a markup of as much as 7 percent.

Proper Identification

So if you end up planning a trip abroad, make sure to heed these warnings. If you do choose to use a credit card abroad, remember to have your passport with you at all times because U.S. credit cards have less-advanced security features than do European credit cards with chip-and-pin technology, so foreign merchants might require proper identification. As the saying goes, hope springs eternal, and I only hope that this spring you won’t fall victim to the trappings of making purchases abroad.

Author Information

Odysseas Papadimitriou is with CardHub.com, an online marketplace for the best credit card deals.

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