Using credit card Abroad
More times than not credit cards make travelling the world much easier. I know when I traveled throughout North Africa; I always had a credit card as a backup form of payment. There is not a need to deal with travelers cheques, exchange large amounts of money, or wearing that annoying fanny pack, which clearly labels you as a tourist. But the simplicity of credit cards should not be overlooked as consumers can find themselves in a leap of financial trouble.
First, I recommend calling your financial institution and letting them know where/when you will be travelling. If you forget to call your financial institution, there is a high chance the bank will automatically block you card. This usually is an attempt to block any fraudulent transactions. Once the bank has been notified, they can adjust your account and allow you to use your card without any provocation.
Credit cards generally charge a fee, which is known as a foreign transaction fee. These fees generally hover around 3 percent and can add up quite quickly once you factor in all the miscellaneous items you will be purchasing. You may think this fee only applies to purchases made in foreign currency, but in recent times credit card companies are assessing the fee on any international purchase. So even if you are travelling in a country who lists their prices in US dollars, there is a chance you will still be assessed a fee. The best way to avoid these fees is to have a reserve amount of cash on hand, which can be used to for small knick-knack gifts. Save the credit card for big purchases, such as dinners, hotels, or expensive excursions.
It is a prudent idea to have a digital image of your credit card. You could scan a copy to a flash drive, snap a photo on your Smart Phone, or store in a similar fashion on your tablet. This is helpful in the event you lose your card, need to call the bank in a pinch, or are not carrying your credit cards but still want to make payment.
If you are travelling in some European countries, they utilize a smart card or pin encrypted credit card. This card has an extra layer of security, which may contain a microchip or an extra PIN number, which must be entered to complete the transaction. Most European countries do accept US credit cards, but beware there are exceptions especially for automatic vending machines. By vending machine, I do not mean a machine which will disperse chips, but some train kiosks issue tickets via a vending machine. It sure beats going to the window!
Always, always, always carry a back up card! This card should ONLY be used in extreme cases. I highly recommend having this back up card associated with a different bank then the rest of your cards. When I was in Algeria, my two primary cards were cancelled because they were linked with the same bank. I was forced to use my back up card and was very happy that it was associated with a different bank.
Lastly, it is important to diversify your payments by using your different credit cards. In addition you should always have a small amount of reserve cash just in case things go awry with your cards. In case you lose your cards you should make a note of the various toll free numbers, your personal banker, or a service center. This way a card can be quickly cancelled and a replacement card placed in the mail. In the meantime use your cash to get by.
Follow these handy tips for financial security while travelling abroad and you can focus more on enjoying the fun, then what is happening at the banks. Remember, it is a vacation!!