Money Matters: Using Credit Cards Abroad

08/13/2019
Many people are wary of using their credit cards abroad. While there’s definitely a need to be careful, using your credit card on vacation is a safe option for several reasons: it means you don’t have to carry large amounts of cash; you can keep more of your cash for smaller purchases; and if it’s stolen there are measures you can take to get access to funds again so you can enjoy the rest of your vacation. Depending on your credit card company, you are also likely to get a better exchange rate than if you took U.S. dollars and had them converted to the local currency.
 
The most important thing to do before you use a credit card abroad is to call your credit card company before you leave home and ask them the following questions:
  1. Do they charge foreign transaction fees if you use your card abroad?
  2. Do they offer any travel insurance or other travel-related perks that you can use on your trip?
  3. Do they have an app that keeps track of foreign exchange rates and your transactions? (This isn’t necessarily a requirement, but it can be really helpful, especially since exchange rates are dynamic and change regularly.)
  4. Can you use your credit card at foreign ATMs for cash? If so, is there a cost to do so?
  5. Can you use your credit card to withdraw cash abroad? If so, is a pin number required to do so?

If you choose to use your credit card abroad, make sure you’ve informed the credit card company of the dates of your trip and the countries you’ll be visiting – otherwise, there’s a chance your card will be flagged for possible fraud and turned off when you try to use it.
 
It may be that the credit card you already have is a great one to take abroad. If you take the time to talk to your credit card company ahead of time, you’ll be able to find out before you leave, and before you’re hit with fees you weren’t expecting.
 
However, not every credit card is created equal; some cards are specifically tailored for international travelers and some are not. If you’ve done your research and realize that using your credit card abroad would cost more than it’s worth, consider looking into another card that may do the trick. Check out this U.S. News and World Travel Credit Card Guide for some of the most popular travel credit cards, including their interest rates, yearly fees and perks, plus some common drawbacks to keep in mind when you’re weighing the pros and cons of a new card.
 
Once you’re on your vacation, consider these best practices when using your credit card:
 
Bring Visa or Mastercard credit cards or debit cards
Due to higher transaction fees, Discover and American Express cards are not as widely accepted in Latin American countries as they are in the U.S.
 
Use credit cards for larger purchases
If you’re going to use your credit card abroad, consider using it for larger purchases such as gifts, souvenirs, and higher-end meals. This keeps the chances of fraud to a minimum, and it means you’ll have more cash available to pay for street food, smaller purchases, and tips.
 
Bring a debit card and a backup credit card
It’s best not to leave yourself without any alternatives in case your credit card gets stolen or lost. Most ATMs accept debit cards as well as credit cards, although of course you should check with your debit card bank about ATM fees and foreign transaction fees as well! Keep your backup credit card in a different location, such as the hotel safe or in your luggage if you’re keeping your credit card in your wallet or purse.
 
Use cash for smaller purchases
Keep cash on hand for purchasing street food or goods from street vendors, taxis or open-air markets. These types of vendors also appreciate smaller bills. Restaurants, banks and the front desk of your hotel are great places to ask for small change on larger bills.
 
Make copies of the front and back of your credit cards
You can either keep these with you, or – even better – scan them and email them to yourself. This will prevent the copies from getting stolen. Send a copy to a trusted friend or family member at home for additional security.
 
Keep a list of customer service numbers with you
Make a note of the international customer service numbers on the backs of your credit cards and keep them with you for easy access if needed.
 
Avoid using the dynamic currency conversion option
Dynamic currency conversion is an option a vendor in a foreign country can give you when you’re purchasing something with a credit card. This option allows you to choose whether you want to have the goods or service you’re purchasing charged in U.S. dollars instead of the local currency. It’s best not to use this option – it likely carries a worse conversion rate than charging the card in the local currency, and also comes with hefty fees that the vendor may not tell you about at the time of purchase.
 
Once you’re enjoying your time abroad, be sure to use common sense precautions with your credit card and money. However, you should also keep in mind that the people providing you with services on your trip – hotel staff, waiters, guides, etc. – depend on the tourism industry and positive reviews for their livelihood. They are not any more likely to steal from you than someone doing their job in the U.S.