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
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