While it’s a good idea to travel with some cash, having the right credit card in your pocket during an overseas travel can significantly simplify your vacation. Usually, credit cards automatically get one of the best conversion rates, relieving you of the worry that comes with currency conversions.
Yet, simply using a credit card does not, in itself make your overseas travel cheaper. So, take action before your foreign flight hits the runway – know the nitty-gritties that comes with foreign transactions.
Begin by understanding how your credit card and debit card issuers are charging you for the use of your card overseas, go through the terms & conditions or discuss with them. Here are a few to help you:
Foreign Transaction Fee: Many card issuers charge this when your card processes in a foreign currency or passes through a foreign bank. Interestingly, this fee can also be charged if you’re at home and shopping online from a foreign retailer. However, not all credit cards charge foreign transaction fees, but there might be other surcharges you should look for.
Cash Advance Fees: This is charged when you use your credit card to withdraw cash. Most credit card issuers charge a higher interest rate for cash advances than for purchases. Hence, even if you pay your balance every month to avoid paying interest, cash advances start accumulating interest from the moment the transaction was processed. If you really need cash, then it’s better to use a debit card at ATMs.
ATM Access Fee: This could be charged by the foreign ATM you use for withdrawal as well as by your bank for using an ATM of a foreign bank or where you don’t have an account. However, some banks waive certain fees if you withdraw money from partner bank ATMs. Thus, enquire about your overseas bank network.
Got worried about so many charges? Don’t! If you use your cards wisely, you can avail multiple benefits such as cash backs and reward points along with the benefits such as free travel assistance, insurance, etc.