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Using Credit Cards Abroad--What You Should Know

by Francine Huff

So you're finally going on a trip abroad and need to figure out whether to carry cash or use credit cards for purchases. Plan on using both, but make sure you understand what's involved with using a credit card. Use the following tips for guidance.

Credit Cards and Currency Exchange

First, it's important to understand that any purchases you make on a credit card are exchanged at the interbank exchange rate. In most cases that's the best rate you get on currency exchange.

Each time you use a card, your credit card company charges a currency conversion fee. Visa and MasterCard usually charge 1% and credit card companies add 1% to 2% on top of that for their own profit. If you have a Capital One credit card you're in luck, since that's the only credit card company that does not charge conversion fees, according to IndependentTraveler.com.

Contact Credit Card Companies

Don't leave home without contacting credit card companies and asking about specific policies and fees regarding overseas purchases. Even if you have previously traveled to your destination it's important to have the most recent information. It's also a good idea to let your credit card company know that you plan to make purchases abroad so they won't suspend your account for unusual activity.

Credit Cards vs. Cash

There are going to be times when you can only make purchases with cash. Some of the common places you may need to use cash include restaurants, stores, or taxis.

Avoid using your credit card to get a cash advance while traveling. If you do so, you're likely to pay credit card rates of 20% and up. To get your hands on some cash while traveling, consider using your debit card at a local ATM to take money out of your bank account. Find out ahead of time what fees your bank charges for ATM withdrawals outside of its network.

Credit Card Receipts

Keep all of your receipts when making credit card purchases. When you get home and receive your credit card bill, review it carefully for mistakes or double charges. If you see anything that looks incorrect or suspicious, contact your credit card company to dispute the charge.

Safe Credit Card Use

Finally, it's important to be safe about credit card use abroad. Always make a photocopy of your cards and keep that information in a secure place, not in your wallet or in your purse. Keep the contact information for credit card companies with these copies so you can quickly call your card issuer in case of an emergency.

Published 04/22/10 (Modified 11/20/13)

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