Using Your Credit Card Overseas

June 20th, 2010

When you use a credit card internationally, you may think it is the same as using it in your own country.

After all, credit cards such as Visa and MasterCard are accepted worldwide – that’s one of their biggest advertising lines.

However, there are differences that can apply, and there are certain issues you must be aware of before you set off abroad. You can always check with your card provider what you need to know before travelling, and this is always advised so they realise you will be leaving the country.

To use a credit card internationally without telling your provider can cause their anti-fraud measures to kick in and refuse the transaction due to its unusual geographical location.

Credit cards carried overseas provide a great way to fund your trip, and offer the option of emergency funding via an ATM if absolutely necessary. They are also easy to cancel in the event that they are lost or stolen. Losing cash is far more of a problem, and it will probably be gone forever. It also means that you will have a record of what you spent your money on, which may make planning your next trip easier in terms of budgeting.

You should certainly make sure if you plan to use a credit card internationally that you are in possession of one that operates on the chip and pin system. A good part of the world has adopted this in place of the magnetic swipe system, and there may be occasions when you will not be able to make a purchase without chip and pin.

Ideally this shouldn’t happen, because merchants can still perform swipe transactions and should do so for foreign customers who haven’t yet changed over, but the reality is that you could be refused.

Advice when you use a credit card internationally

Cash transactions on credit cards are expensive enough in their country of issue. Used abroad for this purpose, you can be truly hammered by fees. This is not just ATM withdrawals, but also buying currency or traveller’s cheques with the card, or any gambling transactions. Interest is also charged immediately, as happens at home, and there will be a foreign currency conversion fee.
Alert your card issuer of your plans to use your credit card internationally so all transactions are duly authorised by them.
Find out if there are any withdrawal limits for cash advances in case you need to use your card for ATM withdrawals.
Use your credit card for the larger expenses, and keep your cash the smaller items.
Write down your account numbers and emergency phone numbers for lost/stolen cards. Store them separately from your credit cards.
Memorise your PIN and do not write it down.
You should be charged local currency when you use a credit card internationally. If a merchant wants to charge you in Aussie dollars, they are after a big mark-up for the subsequent conversion to local currency they will have to make. Pay in local currency and your provider will charge you a much lower rate for their own conversion.