How To Use Your Credit Card Overseas

June 25th, 2010

If you are planning a trip overseas it’s sensible to make sure you travel with your credit card in your wallet.

The advantage of having your credit card abroad means you don’t have to carry lots of cash, don’t need to find the nearest exchange bureau to cash your traveller’s cheques, and it’s easy to make purchases. If you need some emergency cash you’ll find plenty of accessible ATMs.

Checklist

It’s a good idea before leaving home to make a list of any numbers on your credit card. Not only your account number but also the emergency contacts on the back of your card, then you have all the necessary numbers needed to get in touch with your credit provider if your card is stolen or lost.

Although MasterCard and Visa credit cards have a zero liability, which means if your card is used fraudulently you aren’t liable, your credit card provider wouldn’t be impressed at having to wait until you returned to find out you lost your card the first day of your holidays.

It’s also sensible to contact your credit card provider, and tell them you will be taking your credit card on your overseas holiday. If you fail to do this, there is a possibility your purchases could be refused.

Most credit card companies have systems in place to detect fraud, and may flag transactions overseas as questionable if they are unaware you are travelling.

On your return home let your card company know so they can expect any foreign transactions to cease. By doing this you counteract any fraudulent activity which could occur if your card details had been skimmed.

When you are overseas

Foreign transaction fees are not generally imposed when you travel with your credit card abroad, however currency conversion fees of approximately 2% -3% are usually applied. If you make a cash withdrawal from an ATM you will find the same conversion fee is applied.

Try and keep cash withdrawals to a minimum, as interest is attracted from the day the transaction is made, plus you may have to pay a cash handling fee. If you can’t avoid making a cash withdrawal try and access your Internet banking fairly quickly to reduce your account back to zero and avoid the daily interest charge.

One important point to be aware of when travelling overseas is Dynamic Currency Conversion. A foreign retailer may decide to charge you in Australian dollars rather than local currency. They become responsible for the conversion to local currency, however, they can add 4% or more to your purchase price. By paying in the local currency, your credit card provider will handle the conversion at the lower rate of 2% or 3%. You have a choice which currency to use, but be aware of how this can cost you extra when you travel with your credit card.

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