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If you aren’t accustomed to traveling abroad, it’s normal to wonder whether you can use your credit card internationally and if so, does it cost extra to use it? You may be surprised to know many credit card companies charge 2 to 3% in fees on all card purchases while you’re out of the country. Using most debit cards abroad also leads to similar fees. While 2 or 3% may not seem like much, if you are big on shopping or plan to be out of the United States for long, those fees can really add up and wreak havoc on a vacation budget.
In an effort to save, some people look to convert cash into foreign currency. It’s a good idea to carry at least some cash on foreign trips, but then you have to deal with currency exchanges which won’t really save you money since there are currency conversion fees.
There’s a lot to consider, but not to worry. We offer seven tips to help you decrease anxiety and save money related to using your credit cards overseas.
If you are shopping anywhere — in the United States or abroad — that takes credit cards, the odds are extremely high you can pay for goods and services using Visa® and Mastercard®. This doesn’t mean you can’t use American Express® or Discover®, but not all retailers or restaurants will take those. If you don’t have a Visa® or Mastercard®, it’s best to have cash on hand as a backup (more on this later).
It doesn’t have to be one or the other, but in most cases you are better off using credit cards when you travel abroad. This is because many credit cards come with built-in perks and trip-related protections, like access to airport lounges and travel insurance. However, that doesn’t mean using a debit card is inherently a bad idea. In fact, debit cards can be great, but try to avoid frequent ATM withdrawals, since those can come with exorbitant fees.
If you are wondering “Do I need to tell my credit card company I am going abroad?” The answer is yes, you probably should. In fact, some credit card companies require you to inform them when you plan to travel abroad — but not all. It’s considered a best practice to notify your card issuers before leaving the country so that your accounts are not flagged for potential fraud when you attempt to use them abroad. An exception to this is for American Express® cardholders (Amex® users are unable to set up any kind of travel notice). With other credit card companies, it’s easy to call customer service, or log in online via the card company’s website or mobile app to inform them of your upcoming travel plans.
The last thing you want to do on a trip is end up in an Italian cafe, enjoying cappuccino and some gelato, only to find out your credit card has been declined because your card issuers suspect fraud if they weren’t notified of the trip in advance.
If you have a smartphone, make sure you have your credit card company’s app installed so that it’s easy to access your financial information while on the go. Using your secure banking app, you can easily complete nearly any type of transaction, making it fast and easy to move money around between accounts, pay your monthly bill, etc.
Traveling with just one credit card is never a good idea. Too many things can go wrong. Your card could be lost, stolen, or your bank might mistakenly flag it for fraud. You don’t want the success of your trip to be tethered to a single .375 inches wide by 2.125 inches high piece of plastic.
Even if you plan to pay using credit cards for most things, you should keep some cash on hand. For good rates, line up your converted currency ahead of time so that you can get the best deal. Competitive rates can be found online, and if you travel to the foreign currency exchange before your trip, you can often get a better rate before leaving the United States. Note that if you need your new cash delivered, you will have to pay a delivery fee, so try to pick up your currency in person if you can.
This is where you can really save money. Does it cost extra to use a credit card internationally? Not if you use a credit or debit card that has no foreign transaction fees; these cards include no surcharge for purchases made abroad. There’s a competitive market for these cards, with many requiring no annual fees, making it a great idea to add one to your wallet.
Digital Federal Credit Union, a not-for-profit credit union with over a million members, offers Visa® credit cards that have low interest rates and no foreign currency transaction fees. With DCU, enjoy using a credit card overseas that’s accepted in more than 200 countries and territories across the world. Become a member and apply for your card.
Please note, membership is required to open a DCU Visa Platinum Credit Card. Visit our membership eligibility page for more information.
This article is for informational purposes only. It is not intended to serve as legal, financial, investment or tax advice or indicate that a specific DCU product or service is right for you. For specific advice about your unique circumstances, you may wish to consult a financial professional.