While most overseas travelers assume that carrying traveler’s checks is the way to go, it really isn’t – as long as you choose the correct cards to carry.
Along with convenience, you’ll enjoy considerable savings on the exchange rate.
When you visit an exchange counter or an overseas bank to trade your traveler’s checks for local money, you’ll be charged high retail exchange fees, plus other fees as they see fit. But when you use your credit card, you’ll get the benefit of the wholesale exchange rate – just as if you were a big bank or corporation.
When you hand your card to a retailer in another country, you’ll be paying for the purchase in their dollars – although the charge will show up on your statement in U.S. dollars.
You do need to be careful, and do your homework, because not all credit cards carry the same policies.
If you’re planning a trip, the first thing to do is check the policies on the cards you carry now. Read your card literature and call your card issuers to learn what fees will be added when you use your card internationally. Visa and Mastercard charge 1% – and your bank may or may not pass that along to you. They may also tack on as much as 2% in their own charges.
After completing your research, choose the 2 cards with the lowest fees to carry on your trip. If you need to transfer balances away from those cards in order to have plenty of cushion for travel expenses, get it done. If you have time, and none of your current cards offer low fees, apply for a new card that does.
Next, check with your local bank and learn both the exchange fees and the international ATM fees. If the ATM fees are high, plan to withdraw enough each time to last a few days. Test your card before you leave home, and if your PIN number includes letters, get it changed to 4 numbers. Many international ATM machines have no letters on their keyboards, so failure to do this could make your debit card useless.
Be sure to get an international contact number for each of your card issuers and your bank. Their 800 numbers won’t work outside the U.S., so you do need a working number with an actual area code to use in the event that one of your cards is lost or stolen.
Before you leave home, contact your local bank and your credit card issuers to let them know where you’re going, when you’re leaving, and when you plan to be back.
Otherwise, they could see charges that don’t “fit”- and being unable to contact you to verify their validity, freeze your account. Additionally, if your plans change and you extend the stay, use those international numbers to inform the card issuers.
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