Friday, February 29, 2008

Using your card overseas

Jonathan over at Master Your Card was kind enough to write an article for me about using your credit card overseas. I hope you enjoy it....

One of the greatest things about a credit card is that it's accepted in so many places. A Visa card, for example, is accepted in over 24 million locations and can be used in roughly 170 different countries. This has prompted many travelers to make frequent use of their card whilst overseas. Keep the following in mind if you are planning on taking your plastic friend along on your next trip abroad:

* Fees and charges - With its almost global acceptance, a credit card offers terrific freedom when you're traveling. Unfortunately what most people don't realize is that this freedom doesn't come cheaply. Typically when you use your card overseas you should expect to pay both currency conversion and foreign transaction fees. Depending on the card, these can cost up to 5% of the purchase price. For example, if you take your card on a trip to England and later use it to purchase a 1000 euro ticket back, you could be charged upwards of 50 euros in fees just for the privilege of using your card overseas.

* Don't use your card to withdraw cash - Due to prohibitive charges you shouldn't be using your credit card for cash advances anywhere, but this goes double when you're in a foreign country. On top of foreign transaction and currency conversion costs you also waive any interest free period - in other words you start paying interest as soon as the cash leaves the ATM!

* Keep a careful watch over your card - Obviously you should be doing this wherever you are, but you have to be especially vigilant when you're traveling - having your card stolen can put a real crimp in your trip. It's worth investing in a money belt if you haven't already, as this should dissuade even the most skilled pickpockets.

* Notify your card issuer that you are going on holiday - A friend of mine spent a scary few days in South America without any money because his credit card got cancelled - he wound up having to sell some of the clothes out of his suitcase just to get by. Turns out he neglected to notify the bank of his travel plans, so when a few purchases showed up from Nicaragua they naturally assumed the card was being used fraudulently.

* Keep all receipts - Once you get into that travel mindset it's difficult to do that boring stuff like keeping receipts but it'll save you a lot of potential heartache in the future. It's good practice - you'll get a better idea of how much you've been spending and have hard-copies to compare with your statement.

* Carry emergency numbers - In the unfortunate event that your card is stolen, your issuer will have an international number that you can call.

* Check expiry dates - Make sure your card isn't due to expire half way through your trip!

* Always have a backup - Never really entirely on your credit card as a means of getting by overseas. Have a supply of local currency and travelers checks and always leave an emergency supply back at the hotel.

Fortunately, should things go wrong on your trip you are still covered by fraud protection measures, though you may still be liable up to a certain amount if your card is stolen. Check your statement as soon as you get home and notify your issuer IMMEDIATELY of any irregularities.

Summary: Whilst you certainly can use your plastic friend on your next trip abroad, you are likely to pay heavily for the privilege. If you do take your card with you, try to refrain from using it for cash advances and always have a contingency plan in case something goes wrong.

1 comment:

jleane said...

Wow what a FANTASTIC article...

Truly brilliant!

Jonathan ;)