Factors to Consider When Using Your Credit Card Abroad

Having a credit card is a wonderful convenience with most places in the world accepting all the major credit cards, such as MasterCard and Visa. It really does make traveling a lot simpler when you don’t have to worry about carrying around large sums of cash or traveler’s checks.

It is essential that you have some means of making your purchases when you are abroad on business or holiday. A credit card is a great thing to have when you come across an unexpected bargain or you find that you have not budgeted correctly and you find yourself out of funds. You can also withdraw cash from your credit card at any ATM.

While the convenience of using a credit card abroad cannot be overlooked, there are certain factors that you must keep in mind if you intend to use your credit card in another country. You may not realize it, but using your credit card abroad is one of the easiest ways of falling into more debt than you can handle or want. Most people do not take the currency exchange into consideration when they use their credit card in another country.

Let’s say your currency is higher than that of the country you are visiting and you visit a shopping mall to find great prices on clothing. So you go on a shopping binge and buy lost of nice clothes and shoes. When you return home and receive your monthly statement, all the prices are translated into your own currency, which means you probably paid more for them that you would if you had made the purchases at home. In many cases, it means that your credit card balance is actually over the limit.

Many credit card companies charge a higher fee for transactions made in another country. The cost of these fees can really add up if you use your credit card many times. These fees are added to your balance, which means that even though you may have saved on the prices of some of the items, the fees may have made them more expensive that you like.

Even if you make a cash withdrawal at an ATM in the currency of the country you are visiting, this transaction will transfer to your own currency on the statement. This means you may be spending more money than you want or can afford.

Some UK credit card companies will not charge any fees for converting from Euros to Sterling if you are visiting a European country. This is something you should check out with the company before you leave home. It is perhaps better to make a withdrawal using your debit card rather than your credit card to save on these fees.

Many retailers in foreign countries will actually make the charge to your credit card in your home country, rather than that of the foreign country. While this may not be too bad in that you know beforehand what the exchange will be, you need to be very cognizant of the amount they do use for the transaction. If they still keep the same number value in the price, you are definitely getting ripped off because this shows that they haven’t checked the exchange rate and are charging you more for the item than its actual cost.

In order to avoid having some nasty surprises awaiting you at home in the form of your credit card monthly statement, it is very wise to check the fees and the exchange rates before you leave home. Bring a small calculator with you when you do go shopping so that you will know before you buy if the price really does translate into a bargain when you factor in the fees and the foreign exchange.

One option that many people are now choosing when they plan a trip abroad and don’t want the burden of having to use cash or traveler’s checks is to add money to the credit card before they leave home. You can also get a foreign exchange card from most UK banks and this will give you a better deal on the exchange rate. You put money in the account that you draw on for the card and then use it as a debit, rather than a credit card when you travel abroad.

UK travelers are also at risk of having their credit cards stolen when they holiday abroad. It is important to always know where your card is and if you have more than one credit card, you should only take one with you. Then if you do have the unfortunate luck of losing your card or it is stolen, you won’t be left penniless when someone cleans out your existing credit limit. Hotels have safes in the rooms where you can store your valuables, including your credit cards. If you intend to be in a very busy area, either keep your credit cards and wallet in your front pocket or have a purse that straps around your waist and opens in front.