Travel Credit Cards, The Best Way to Carry Money Overseas
Before you leave for your next trip abroad, take a moment to think dollars and cents — or should we say pounds and pesos? Get the most for your money when traveling internationally by doing a little homework first or just get your travel credit cards.
The most important step is to know your options. In days of yore, traveler’s checks were the most popular way to carry money overseas — but today’s travelers are much more likely to rely on travel credit cards and ATM withdrawals, which usually offer better exchange rates and lower fees.
What’s the best option for your travel credit cards? And how can you avoid those pesky currency conversion fees when making purchases abroad? Read on for answers to these questions and a comprehensive roundup of all your currency conversion options when you’re traveling overseas.
How to Get the Best Exchange Rate
Credit Cards, travel credit cards
Best for: Large purchases such as airline tickets, hotel bills, car rentals and restaurant meals.
Pros: The biggest advantage to using travel credit cards while traveling overseas is that credit card purchases are exchanged at the interbank exchange rate, usually the best rate you can get for currency exchange. While most credit card issuers charge currency conversion fees each time you make a purchase in a foreign currency (generally 1 percent from Visa or MasterCard plus an additional 1 – 2 percent for themselves), these fees are typically lower than those you’d pay to cash traveler’s checks or convert your own currency at a change bureau. And there are a few cards out there (many from Capital One) that do not charge any foreign transaction fees at all, not even the ones from Visa or MasterCard. Check out travel credit cards and CardHub.com for a list.
Travel Credit Cards
Cons: Some restaurants, stores and even hotels won’t take travel credit cards, so you’ll need to have cash on hand at all times. While you can use travel credit cards to get cash advances at ATM’s, bear in mind that they’ll be subject to any finance charges your credit card company imposes — which can add up very quickly. Plus, if you’re not home by the time the bills come in and you haven’t made arrangements to pay them, you’ll be hit with hefty finance charges on these advances.
One problem for U.S. travelers is the growing prevalence of “chip-and-PIN” Travel Credit Cards in Europe, Asia and South America. Designed to reduce fraud, these cards rely on an embedded chip that transmits information to a merchant, which the consumer then verifies by entering a PIN. While U.S. cards with magnetic stripes will still work as long as there’s someone to swipe them, many travelers report problems using their cards in ticket vending kiosks, at gas stations or in other places featuring automated payment machines. If you find yourself in this dilemma, your only alternatives are to find an attendant to scan your travel credit cards or to use cash instead.
A few U.S. banks have begun testing dual travel credit cards that use both the magnetic stripe and the embedded chip. These cards are not yet widely available. However, Travelex has introduced a prepaid chip-and-PIN MasterCard that works like a hybrid between a credit card and a traveler’s check. See the Traveler’s Checks and Check Cards section of this story to learn more.
What You Need to Know about travel credit cards: The first thing you should do if you are traveling abroad with a credit card, even if you only plan to use it in case of an emergency, is to call the issuer and ask which fees will apply to your purchases, both in local currency and in dollars. We recommend calling before each trip, as these policies may change without notice.
While you’re on the phone, you’ll also want to let your credit card issuer know when and where you will be traveling — that way the sudden international activity on your account won’t trigger your issuer’s fraud alert system. As a precaution, we recommend bringing two travel credit cards on your trip in case one stops working. Finally, get a phone number that you can use to call the company from overseas if your card is lost or stolen. (The 800 number on the back of your card typically will only work in the U.S. or Canada.)
Some merchants (particularly in Europe) offer what’s known as dynamic currency conversion, which means that they’ll charge you in dollars rather than the local currency. Because some travel credit cards issuers will waive the currency conversion fee if your overseas purchase is made in dollars, dynamic currency conversion could help you save a few coins. However, keep in mind you’ll almost always get hit by a conversion fee from the merchant instead — sometimes up to 5 percent — so you may end up losing out on the deal. Be sure you know which fees apply to either option before deciding which currency to use.
A few other caveats to bear in mind: Some hotels and car rental companies may put holds on your travel credit cards for the amount of your total expected bill. This can use up your credit line before you’ve actually incurred and paid for the charges. All merchants are supposed to inform you if they do put a hold or “deposit” on your card. If they do, make sure you clarify that the hold has been removed when you’ve paid your bill in full.
Keep in mind about your travel credit cards that you may not have as much protection overseas as you do at home when problems arise over inaccurate charges. Incidents are always being reported of travelers being charged twice for the same item or for items they never purchased, and credit card companies have been unwilling or unable to intercede on their behalf. Always watch merchants imprinting your card and keep your receipts. After you get home, check your credit card statement. If you see charges you didn’t make, call your travel credit cards creditor and ask them to dispute the charges.
This Travel Credit Cards is from http://www.independenttraveler.com/resources/article.cfm?AID=42&category=8 or click this Travel Credit Cards to go there
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