This guest article comes from Odysseas Papadimitriou of CardHub.com, an online destination for the best credit card deals.
As you can perhaps tell from my name, I’m Greek. I grew up in Athens before coming to the States for college, and while I ended up putting down roots in the Washington, D.C. area, I go back to Greece a few times a year to visit family. As a result, I’m somewhat of a travel veteran, and over the course of my trips, I’ve picked up a few tips and tricks for how to save time and, perhaps most importantly, money when abroad.
The first thing you must make sure to do when traveling abroad is use a credit card whenever you make a purchase. I’m not saying this because I run a credit card comparison website. Rather, credit cards eliminate worries about finding the best exchange rate or exchanging the right amount of money so as to have enough for your trip but not so much that you have a lot of foreign currency left over afterwards. Credit cards also protect you against pickpockets because they’re easier to conceal than cash and have fraud protection that ensures you won’t lose your money, even if your card gets stolen. In short, using a credit card abroad will help limit the hassle and potential danger of spending overseas.
Still, there are a few steps you must take in order to maximize the benefit your credit card provides. Interestingly, much of this comes before you depart. First, you should call your credit card company to ask if your card has foreign transaction fees. While most credit cards charge fees for overseas spending that amount to about 2-3% of your purchase totals, you should be able to find a no foreign transaction fee credit card regardless of your credit standing. Some issuers, like Capital One, even offer secured credit cards with no foreign fees. So if you don’t have one already, open one before you leave.
Once you have such a card, inform your issuer of your travel plans so your account doesn’t get suspended due to suspicious use and ask for a phone number that you can call collect in case you run into trouble while abroad. That’s it for your pre-trip credit card checklist, but there are still a couple things you must do while overseas to avoid problems and high costs.
For instance, if you’re traveling in Europe, you should carry your passport with you wherever you go. Why? Well, European credit cards have a security feature called chip-and-pin technology that is far more advanced than the magnetic stripes used by American credit cards. Therefore, merchants are likely to ask for passport identification in order to accept your credit card.
Merchants are also likely to offer to convert the total cost of what you’re buying into American dollars so you can understand it better. While this might sound helpful, you should only sign checks and receipts that are expressed in the local currency because merchants typically charge high conversion rates in order to make a profit off this supposed service.
Ultimately, while a credit card is my preferred method of payment while overseas, I always end up needing cash as well. So, you should open a debit card with no foreign transaction fees in addition to a credit card without such fees. At the end of the day, when traveling aboard, you want to enjoy your trip, not worry about conversion rates, foreign currency and pickpockets. Your focus should be on seeing the sights and experiencing other cultures or accomplishing business objectives. So just remember this advice and you will be able to spend more confidently while also avoiding a surprise on your post-trip credit card statement.