Credit cards offer users convenience, especially when traveling. It is nice to know that you do not have to walk around with pockets full of cash. However, using credit cards in foreign countries has its downsides as well.
You can run the risk of overpaying because of additional charges that might be added to the bill. But a little awareness on your part can go a long way in ensuring that you avoid overpaying.
To learn some of the tips and tricks for using your credit card abroad, read on. You’ll learn about the extra charges that can end up making your holiday much more expensive than it should be.
1. Check credit card receipts right after charges are made
This is a good habit to get into whether you are using your credit card locally or internationally. Just as foreign merchants can overcharge you, domestic merchants could just as readily do the same.
By ensuring that you always check your credit card receipts right after charges are made, any unscrupulous activity can be detected right away. Otherwise, once it is too late, merchants often feign ignorance and your bank may not be in a position to help you.
2. Challenge unscrupulous or unwarranted charges
Besides checking your credit card receipts immediately after being charged, also do not hesitate to challenge charges which you clearly know are unscrupulous and unwarranted.
In the case of overseas credit card transactions, an unwarranted charge often added on by merchants is a “currency conversion fee” since the charge made is in a currency different from the home currency of your credit card.
Another ridiculous charge is the “foreign currency fee”, simply because there is foreign currency at play here. This is different from the “currency conversion fee” referred to above and is often charged separately.
You do have the power to fight such charges. Contacting your bank promptly is the best way to do so. You can also challenge the merchant directly about such charges. Today, with online reputation being critical to hospitality establishments, even the mild threat of posting about such frivolous charges on sites like TripAdvisor or Yelp can ensure a prompt, favorable response from merchants.
3. Use the local currency
When you use your credit card overseas, you have the option of the charge being incurred in either the foreign (local) currency of the place you are in, or your home currency, the currency for which your card was issued to you.
It is strongly recommended that you have all charges made in the local currency of the place you are in and not your home currency. That way, your bank won’t have the opportunity to add on unnecessary foreign transaction fees.
Merchants tend to voluntarily offer customers the choice of being charged in either the local or home currency. A home currency charge will bring “dynamic currency conversion” into play, which is only likely to add to your charges. Therefore, it is advisable that you have overseas credit card charges made in local currency only.
4. Use an American Express credit card if you have one
In the context of overseas credit card usage, American Express credit cards do come with distinct advantages over others.
For instance, it has its own payment network without having to rely on others. Not only that, American Express forbids merchants from indulging in any kind of “dynamic currency conversion” that we mentioned in the previous point.
For these two reasons alone, if you already have an Amex credit card, use it on your overseas sojourns. However, it’s important to note that because of these strict rules, not all establishments will accept American Express.
5. Use your credit card sparingly and at reputable merchants
Our final advice for you when it comes to using your credit card abroad is to do so sparingly and at reputable merchants only. At small, unknown businesses, try to use cash as much as possible, minimizing any card activity. This will reduce your chances of having fraudulent transactions.
Conclusion
Small steps can go a long way in keeping you protected from undue charges while using your credit card overseas. Remember these tips next time you plan to use your credit card overseas to help you avoid costly charges while traveling.