All you need to know about International Credit Cards transactions
International credit cards make worldwide payments easier. If you are going to travel overseas this summer or you often visit foreign countries on business purpose, you should know some basics about international credit cards transactions and fees.
Foreign and International Transaction Fees
Most of American banks charge from 1 to 4% for out of country transactions on credit card. This percentage consists of issuers fee for foreign payment (0-2%) and System Currency Conversation fee (Visa, Master – 1%, Amex – 2%, Discover – 0%). If currency exchange is involved you can be charged additional 0-5% for Dynamic Currency Conversation fee. Seems to be too much fees!
Look for 0% international transaction fee cards like Capital One No Hassle, Capital One Venture and Discover cards (available for US-residents only).
The good advice is to pay in local currency when you are overseas. When local merchants convert prices in dollar amount they often use worse rates.
Credit Cards, Debit Cards or Cash
I would say take them all. The good idea is not to carry them all in one wallet, keep them in different pockets or even leave you debit card in a hotel room.
Always carry some cash with you to buy souvenirs and to tip service staff. Although in most touristic places dollars and Euros are accepted, you’d better exchange some money for local currency – Yuan, Rupees or whatever you need. But be careful carrying a lot of cash with you, because it can be stolen or lost.
It’s much more safe to keep most of your funds in form of plastic cards. Debit card is good because you can use it in ATM, but for payments you’d better use credit one. Credit card is necessary to rent a car, book room in a hotel and buy airline tickets. Moreover it can be beneficial, if you use reward card designed for travelers (miles or points card). American Express has great rewards for several tickets and hotels spending.
You should also be aware that in Europe smart chip cards is getting more and more popular. These cards have small chip (golden square piece) with additional data besides the magnetic strip. Unfortunately I’ve never met such cards issued by US banks. Some vending ticket machines in France, Germany and other European countries accept only such cards. This is one more reason to always have some cash – cash is accepted everywhere.
The worst case in the area is to have fraud troubles with your debit card which means troubles with money on your bank account. So try to pay with credit card when you are abroad, because they are more theft protected. In case of some issues, it takes less time to claim and procedure is easier. If your card was stolen or lost, you need to contact credit card issuer as soon as possible to block it. And finally, if a store seems to be suspicious, just don’t buy anything there.
Before going abroad don’t forget to notify the credit card issuer, so it won’t block your card because of out of country transactions.
Visa, Master or Amex
International payments systems as Visa International, Master Card, American Express and others are widely spread in the world. Visa and MasterCard are accepted in more than 210 countries, Amex and Discover in more than 150. But the number of places that accept Amex and Discover in Europe and Asia is quite low.
So the best choice for foreign travelers is Visa and Master Card. You can find stores that accept these cards by stickers on their doors or you can just ask. You also can easily find ATMs that works with them. Some people say that Master Card is better for Europe and Visa for US and Asia – from my experience it doesn’t make any sense. Almost all stores, restaurants, car-rentals and hotels treat them equally and work with both systems.
Tell us what do you think.
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