When you travel overseas, it is smart to bring along a backup credit card to avoid being ripped off by “helpful” strangers. You should also bring cards with travel spending bonus rewards, but make sure they apply when you are outside the U.S. Many foreign merchants don’t accept credit cards. Cash is the main form of payment in many countries, and a December 2020 study by the European Central Bank revealed that 73% of transactions were made in cash.
Avoid foreign transaction fees
There are several ways to avoid foreign transaction fees when traveling with a credit or debit card. By using a zero transaction fee card, you can pay less in foreign currency than you would in your home country. You can also use a credit card with ATM rebates. When you travel, apply for your card early so you can receive a new one in the mail. When you travel, you should also keep your American express platinum card in a safe place.
If you travel often, choose a credit card that has no foreign transaction fee. This will keep you from incurring extra fees and enjoy the protections of the card issuer. Moreover, this way, you’ll avoid the hassle of exchanging currency at airports. And if you choose a card with a foreign currency fee waiver, you can avoid paying an annual fee for your card.
Consider opening a second bank account abroad. Some banks like Capital One 360 don’t charge foreign ATM fees. If you’re traveling abroad, avoid carrying cash with you. Carrying cash can be risky – there are numerous places to be pickpocketed. If you travel abroad regularly, it’s best to use a credit card with ATM fee reimbursement.
Avoid carrying a balance on your credit card
Whenever you’re on vacation, you may be tempted to use your credit card to make purchases, but it’s important to remember that carrying a balance on your credit card is not healthy for your financial health. You may run into unexpected expenses, or you might be lured by a sales ad. Keeping a low balance will allow you to pay off your balance in full and keep your credit score high.
Keep track of your spending on a weekly basis, and keep some money in the bank just in case you run into a surprise expense. If you have to make purchases, avoid carrying a balance on your card. It can have negative repercussions. Therefore, always pay off your balance in full each month. And if you must use your credit card when traveling, consider a credit card with a low-interest rate.
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Credit card issuers also like to see how much you use your card. By maintaining a balance on your credit card, you can show the company that you’re capable of handling new lines of credit. Although this method will cost you more money, it will allow you to maintain a low credit utilization profile. Additionally, using a credit card when traveling provides you with more protection than using cash or debit cards. Some cards offer purchase protection, lost luggage reimbursement, or travel insurance. In these instances, it’s worth utilizing your card, especially if you’re traveling abroad. You can also get these benefits for free when you pay off your balance in full. Some cards may charge an annual fee for these benefits.
Related: Beginner’s Guide to Getting the Maximum Benefit from your Credit Cards
Comments
29 responses to “Why You Should Use a Credit Card When Traveling Overseas”
you always share the most useful information on your blog! Thank you for this!!
Hi Nisee, welcome.
It’s been a while since I’ve traveled abroad but remember to tell your credit card/bank that you’re traveling, otherwise they might flag it for potential fraud. I’ve had my credit card turned off without warning while traveling (fortunately I was state-side) but I’d hate to be overseas and get it shut off! Good post!
Hi, glad, yes it is important to inform your bank in advance before you travel.
Great tips! When I travel (or make big purchases) I generally only use credit cards for a lot of the reasons you outlined in the post. Thank you for bringing other great ideas, too.
Hi Debbie, I really appreciate your feedback.
Great point of view, Thankyou for sharing the information with us.
Welcome.
I really appreciate this article as I am heading overseas tomorrow and have yet to buy the correct currency. very timely article for me!
Hi Susan, am glad you found this post a helpful resource.
Good points here John. I am big on using the credit card abroad. I am heading off to travel internationally again in a few hours. Having a credit card makes life easier; cash can be quite the problem in many spots as getting to ATMs proves to be difficult. I love it when I can use the card in places. Good thing is that more stores around the world accept credit cards these days. We used the credit card in a quite rural section of Panama last year when shopping. Surprised me that this was not a cash only region.
Hi Ryan, glad to get your feedback on your experience using credit cards while traveling abroad. Am very grateful for your comment.
My pleasure brother. I was in the USA when I wrote the comment; now I’m in Greece. Every place in Athens seems to take cards; they wave the chip and the purchase goes through.
Hi Ryan, glad to get real life feedback from you on this topic. I have an enjoyable trip.
This is a really informative blog post about using credit card and travelling. Thank you for sharing. I will bare this in mind when travelling.
Lauren
Hi Lauren, thanks for dropping by and taking time to comment.
This is just what I need as I am travelling abroad next week. I really did not consider the transaction fees before. Thanks for this one.
Hi, I appreciate your feedback.
This is an interesting and new perspective. My husband and I don’t use credit cards to stay out of debt (we’re big Dave Ramsey budgeting fans) but I’d definitely consider this option when overseas!
Hi Stephanie, am delighted to get your feedback. Thanks for reading.
This is really interesting and makes a lot of sense! I know very little about credit cards but they definitely have their place!
Thanks for the feedback.
We use our Amex Platinum when traveling. It is also a great way to build up points!
I always bring a couple no FX credit cards when travelling and agree with you about the importance of doing so. I’ve found in my travels in Europe that most places will take a credit card. You just want to make sure they charge you in their currency and not your own to avoid that additional surcharge. Thanks for sharing!
Hi Jodie, I really appreciate your insightful feedback!
This is good advice for using a credit card when traveling abroad. My debit card charges fees for foreign transactions so it would be good to have a card that doesn’t!
Hi Karalee, thanks for your feedback.
This is really interesting and informative. Not something I’ve considered before but I’ll definitely keep this in mind next time I travel abroad.
I appreciate your feedback!