When traveling abroad you credit card can be a convenience, but also major headache! Here are some things you need to know before you pack that piece of plastic for your trip.
1. You will (most likely) pay foreign transaction fees
If you live in the UK I’ve got good news… you don’t have to worry about these fees, because U.K. banks are prohibited from charging them. But if you live elsewhere, there’s a high probability that your credit card charges a fee for making purchases outside of your home country.
Typically this fee is a surcharge equal to 3% of the price you’re paying. So if you’re from Spain and buy a $10 sandwich in the US, expect to see a $0.30 surcharge on your billing statement for that purchase. Fortunately, regardless of which country you live, you should be able to find a card that doesn’t charge this fee.
2. Your brand of credit card might not be accepted
Brand acceptance can vary greatly depending upon what region of the world you’re traveling. Take the US, where the Discover brand is quite popular and has over a 90% acceptance rate. However if you tried using a Discover card in say, France or Spain, the merchant probably wouldn’t even know what it is!
This is why you have to research acceptance for the country you’re traveling to. Generally, Visa and MasterCard will be the best while traveling abroad. Trying to use an American Express can be a hit or miss.
3. Your card’s benefits won’t be the same in every country
Nowadays most credit cards come packed with benefits like auto rental insurance, concierge, extended warranties, and many others. But guess what? The rules for these may vary, depending on the country you’re traveling to.
For example if you’re staying at Marriott club Son Antem, you might assume that the Marriott Rewards Visa would be the best credit card to take with you… not necessarily. The reason being is that many of the Visa Signature benefits such as purchase security and warranty manager service won’t apply in Spain. However on the brightside, at least your Marriott credit card would still be earning bonus rewards for purchases made at the club.
4. Your account could be frozen unexpectedly
If you don’t travel often, then using your card in a foreign country may trigger a security alert with your bank, since the activity would be considered unusual (and therefore, a potentially fraudulent purchase). When this happens, you bank will freeze your account and require you to call customer service and verify that it’s really you who is using the card.
This can be a huge problem if you are in a hurry (like paying a taxi driver) or it can be downright embarrassing (because a store won’t know why your card was denied). So how do you prevent this from happening? One of the easiest ways is to simply call your credit card company before your trip and let them know where you are going. That way, your purchases in a foreign country won’t be flagged as suspicious.
5. You might be charged extra for using credit cards
In the UK and the US, it’s very unlikely that a business will charge you extra for paying with plastic. However, that rule doesn’t hold true elsewhere in the world.
In many countries, it is customary to charge the customer more if they’re paying with a credit card. For example, while staying in Malta at a hotel or timeshare, make sure you carry some local currency in your pocket because it’s not unusual for small businesses there to charge an extra fee on card purchases.