Credit Cards for Foreign Travel

Watch the Fees

There are special fees associated with using credit cards for foreign travel.

Credit Card Foreign Currency Transaction Fees

Visa and Mastercard charge all credit card issuers a one percent fee on all foreign transactions, even if the transaction was made in United States dollars. Most card issuers pass the one percent fee on to their cardholders, adding an additional fee of up to three percent, for a potential total of four percent added for all foreign transactions.

The exception is Capital One. This company does not add any fees for foreign transactions.

Be sure to check the Terms and Conditions on your credit card before you leave on your trip to make sure that you know the foreign transaction fee that you will be charged.

Exchange Rates

Not all credit card issuers charge the same exchange rates. Before you leave on your trip, call your card issuers and ask what the exchange rate would be on that day if you had made a $100 purchase using your credit card in the city to which you are traveling. By comparing the responses of all of your credit card issuers you will be able to determine which issuer will give you the best exchange rate when you actually make your purchase. Of course, the actual exchange rate will be determined based on the rate in effect on the day of your purchase.

When you are making a purchase outside of the United States be sure that your purchase is charged to your card in the local currency. If the retailer charges the card in United States dollars, then you are relying on the retailer to give you a good exchange rate – and it may not be as favorable as what you would receive from your credit card issuer.

Acceptance: Credit Cards for Foreign Travel

Not all credit cards are accepted outside of the United States. For example, Discover is only accepted on a limited basis in foreign countries. Visa and Mastercard have the widest acceptance.

Stay Safe

Resist the urge to take all of your credit cards with you when you travel out of the United States. If your wallet is lost or stolen you will have to stop your vacation and file lost/stolen reports with all of your card issuers.

Select one or two cards that have sufficient credit available to buy an emergency airplane ticket home if necessary. Then, carry one card in your wallet and hide the second card in your carry-on luggage. If your wallet is stolen, you can still access the credit available on the credit card you had hidden in your carry on luggage.

Avoid Merchant Disputes

The distance and time zone changes might make it more difficult for your credit card issuers to provide you with resolution support if a foreign merchant charges you for items you did not purchase.

For fewer disputes and easier resolution, be sure to:

• Ask for a receipt with every purchase.
• Watch the merchant and make sure that the items on the receipt match the quantity and price of the items that you purchased.
• Keep all of your receipts.

When you return, carefully review your credit card statement. Ask your card issuer to dispute any charges that you think are inaccurate.

Watch Credit Holds

Some hotels and car rental companies will place a hold on your credit card for the projected amount that you will be spending for your room or car. These holds can quickly use up your available credit. Be sure that:

• You know the amount of the hold and the resulting amount of credit you have available
• The hotel or car rental company removes the hold when you pay your bill in full

Understand Your Insurance Benefits

Some credit cards offer benefits such as insurance and emergency trip insurance as a benefit on their credit cards. Check the details of the benefits before you leave home. Take information with you telling you what you need to do and who you need to call if you need to file a claim on the insurance.

Call Your Card Issuer

Be sure to call your credit card issuer before you leave on your trip and tell them where you are going and how long you will be gone. This will avoid any unnecessary freezing of your account which they might implement as a security measure after seeing sudden international activity.