4 Tips for Using Credit Cards Overseas (2024)

While you’ll always need some cash, using a credit card for your spending needs can significantly simplify overseas travel. You won’t really have to deal with converting currency and, armed with the right credit card, you won’t pay unnecessary foreign transaction fees.

In addition, pickpockets will be less of a threat, not only because credit cards are easier to conceal and keep safe but also because even if your card is stolen, you won’t actually lose money. Just report your card missing, and you’ll be off the hook for any unauthorized purchases.

Still, the act of simply using a credit card does not in itself make overseas spending cheaper. By following these four tips before you leave and while traveling, you can make that goal a reality.

Key Takeaways

  • Credit cards simplify spending while traveling, as cash can be clunky, conversion rates tricky, and cash is prone to loss or theft.
  • If a credit card is stolen, it can be suspended and replaced in short order.
  • Make sure you understand your card’s international fees and restrictions.
  • Use a card that does not charge foreign transaction fees.
  • Tell your card issuer of your travel plans in advance so they don’t assume that your card has been stolen and used without your consent.

1. Use a Credit Card With No Foreign Transaction Fee

Many, but not all, credit card issuers charge fees for purchases made overseas with a foreign merchant. These fees typically range from 1% to 3% of each purchase and can result in you paying significantly more than the listed price of anything that you purchase overseas. This can really add up throughout a trip.

Before you depart, check your credit and debit card agreements to see if they include such fees. If they do, then apply for a credit card with no foreign transaction fee, as well as for a debit card that does not charge extra for ATM withdrawals in other countries. Make sure to apply far enough in advance to allow for approval, account setup, and receiving your new card in the mail.

Foreign transaction fees can also apply to purchases made online from your home country where the vendor is foreign and processes the transaction in its local currency. Keep this in mind when you book hotels and day trips before departing.

2. Call Your Credit Card Issuer Before Leaving

Once you have the requisite cards, alert the issuer of your travel plans and ask for the number that you can call collect for assistance while overseas. This not only will ensure that your cards do not get suspended because of suspicious activity, but also will give you a way to contact your issuer free of charge if something comes up.

Some card issuers no longer need cardholders to alert them to upcoming travel. For example, American Express uses fraud technology to help recognize when cardholders are traveling. Amex does recommend that you keep your contact information updated in case it needs to contact you while you’re away. Be sure to check with your credit card company before you leave to see if notifying them is necessary.

3. Avoid Dynamic Currency Conversion

Make sure to avoid dynamic currency conversion, a credit card feature that allows you to make a credit card purchase in a foreign country by using the currency of your home country. Some of us tend to have trouble relating foreign currency to the U.S. dollar, at least off the top of our heads while shopping.

Foreign merchants take advantage of this fact at the checkout counter by offering to quote the final price in U.S. dollars and, unbeknownst to tourists, making that conversion at an uncompetitive exchange rate.

Avoiding these unnecessary costs is quite simple. All you need to do is refuse to sign any check or receipt not expressed in the local currency.

If you’re worried about deciphering the cost of meals and goods during your trip, just brush up on conversion rates before leaving or download a mobile app to your phone that will make the calculations for you.

4. Memorize Your PIN

With the institution of chip-and-PIN technology, some credit card terminals—particularly those in Europe—require the cardholder to enter a personal identification number (PIN). Make sure you have one set up and memorized before you leave town.

Merchants in some countries still use the less sophisticated magnetic stripe system. As a result, merchants in these markets may not accept your credit card if you don’t have proper identification. As long as you carry your passport, you should be fine. Merchants simply want to be able to verify that the person using a credit card is actually the one authorized to do so.

Chip cards, also known as EMV cards, were designed to enable secure payments and were first introduced in Europe in the 1990s. The United States only started fully rolling out chip cards in the last several years.

Do Credit Cards Charge a Fee When Used Overseas?

It depends on the credit card. Some credit cards will charge a fee overseas, while other cards will not. Confirm with your credit card company what kind of fees, if any, will be charged if the card is used abroad. Also, understand that some retailers will not take an international credit card unless it is an American Express, Visa, Capital One, Mastercard, or Discover card.

Do Credit Cards Automatically Convert Currency?

Yes, credit card companies automatically convert foreign currencies to the domestic currency using their exchange rate. When you look at your card statement, the amount charged will be in the domestic currency.

Do I Need to Tell My Credit Card Company I Am Going Abroad?

You do not necessarily have to tell your credit card company that you are going abroad in order to use your card internationally. Your card will usually work but there are chances that transactions may be blocked, particularly for large amounts. It is always prudent to let your card company know you will be abroad and when to ensure your charges will not be blocked.

The Bottom Line

While overseas travel can be both confusing and expensive, there are ways to minimize the cost and hassle of spending abroad.

As long as you have a credit card with no foreign transaction fees, notify your credit card company of your travel plans, and only pay for purchases expressed in terms of the local currency, you should be able to avoid post-trip credit statement surprises.

In the end, a trip overseas shouldn’t be characterized by worries over conversion rates and handling foreign money. So get the right cards before leaving and allow your focus to shift to its rightful place: having a good time, or getting down to business.

4 Tips for Using Credit Cards Overseas (2024)


What is the 2 3 4 rule for credit cards? ›

According to cardholder reports, Bank of America uses a 2/3/4 rule: You can only be approved for two new cards within a 30-day period, three cards within a 12-month period and four cards within a 24-month period.

What are 5 tips for effective credit card use? ›

  • Pay on time. Paying your credit card account on time helps you avoid late fees as well as penalty interest rates applied to your account, and helps you maintain a good credit record. ...
  • Stay below your credit limit. ...
  • Avoid unnecessary fees. ...
  • Pay more than the minimum payment. ...
  • Watch for changes in the terms of your account.

How do I ensure my credit card can be used overseas? ›

Tell your card issuer of your travel plans in advance so they don't assume that your card has been stolen and used without your consent.
  1. Use a Credit Card With No Foreign Transaction Fee. ...
  2. Call Your Credit Card Issuer Before Leaving. ...
  3. Avoid Dynamic Currency Conversion. ...
  4. Memorize Your PIN.

How to use credit card internationally? ›

Tips for Using a Card Internationally
  1. Inform your credit card issuer of your travel plans. ...
  2. Bring cash while traveling, just in case. ...
  3. Apply for a card with no foreign transaction fees. ...
  4. Keep points in mind when using your card abroad. ...
  5. Familiarize yourself with your card's travel perks.
Feb 21, 2024

What is the 15 3 payment trick? ›

If you use the 15 and 3 credit card payment method, you would make one payment (for around $1,500) 15 days before your statement is due. Then, three days before your due date, you would make an additional payment to pay off the remaining $1,500 in purchases.

What is the 15 3 credit card payment trick? ›

By making a credit card payment 15 days before your payment due date—and again three days before—you're able to reduce your balances and show a lower credit utilization ratio before your billing cycle ends. That information is reported to the credit bureaus.

What are 3 tips to use a credit card responsibly? ›

How to use credit cards responsibly
  • UNDERSTAND YOUR CREDIT CARD TERMS. First and foremost, it's important to understand your credit card terms. ...

How to smartly use credit card? ›

8 Tips on How to Use a Credit Card Wisely
  1. Know your credit limit. ...
  2. Keep track of your credit report. ...
  3. Choose a rewarding credit card. ...
  4. Time your purchases. ...
  5. Pay your credit card bill on time. ...
  6. Read the terms and conditions thoroughly. ...
  7. Never exhaust your credit limit. ...
  8. Use your card at trusted merchants.

What is the number 1 rule of using credit cards? ›

Pay your balance every month

Paying the balance in full has great benefits. If you wait to pay the balance or only make the minimum payment it accrues interest. If you let this continue it can potentially get out of hand and lead to debt. Missing a payment can not only accrue interest but hurt your credit score.

How can I avoid transaction fees abroad? ›

The best way to avoid foreign transaction fees is to acquire a no-foreign-transaction-fees credit card, if you qualify for one. Next in line are checking accounts or debit cards with no foreign transaction fee. It is also possible to avoid the fee by paying in the local currency for purchases.

Which bank credit card is best for international use? ›

Best International Travel Credit Cards
  1. SBI Elite Credit Card. ...
  2. RBL World Safari Credit Card. ...
  3. Air India SBI Signature Card. ...
  4. HDFC Bank Regalia Credit Card.

Should I inform bank when travelling abroad? ›

Notify Your Bank

Larger banks generally grant customers the ability to avoid bank fees when withdrawing cash and reduce the likelihood of your bank flagging your account for spending overseas. As with your credit card, if you're with a big bank, stay on the safe side and notify them of your trip.

Is it wise to use credit card abroad? ›

You don't have to carry as much money or change currencies as often. This is ideal for larger purchases like flights and hotels. Unlike cash, credit cards provide fraud protection. For starters, most international merchants require EMV chip cards, which are automatically more secure than their magstripe counterparts.

Do credit cards automatically convert currency? ›

The currency conversion will be handled automatically by your credit card network using their exchange rate. To add insult to injury, you may still end up getting charged a foreign exchange fee even if you use dynamic currency conversion and the transaction is performed in USD.

Is it better to use cash or credit card overseas? ›

Advantages of using cash

If your spending discipline breaks down when you use credit cards, cash may be a better choice while you let loose on vacation. No foreign transaction fees: Many credit cards charge an extra fee of up to 3% on purchases made outside the country, although you can find cards that don't.

What is the golden rule of credit cards? ›

The golden rule of credit card use is to pay your balances in full each month. “My best advice is to use a credit card like a debit card — paying in full to avoid interest but taking advantage of credit cards' superior rewards programs and buyer protections,” says Rossman.

What is the 5 24 rule for credit cards? ›

What is the 5/24 rule? Many card issuers have criteria for who can qualify for new accounts, but Chase is perhaps the most strict. Chase's 5/24 rule means that you can't be approved for most Chase cards if you've opened five or more personal credit cards (from any card issuer) within the past 24 months.

What is the 50 30 20 rule for credit card payments? ›

Budgeting with the 50-30-20 rule

All you need to do to make a monthly budget with the 50-30-20 rule is split your take-home pay (that is, after taxes and deductions) into three categories: 50% goes towards necessary expenses. 30% goes towards things you want. 20% goes towards savings or paying off debt.

Is it better to make two payments a month on a credit card? ›

If you typically carry a balance on your credit card from one month to the next, then making multiple payments during each billing cycle can reduce your interest charges overall. That's because interest accrues based on your average daily balance during the billing period.

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