International travel is amazing, rewarding, intellectual, and ahem expensive. Don’t add to what you’re already spending by traveling with the wrong credit cards. As it turns out, you need to have the right plastic for foreign travel. Even though the credit cards you own will be accepted in foreign lands, they’re likely going to cost you more than you want to spend.
Foreign Transaction Fees
The small print is where they get you. You’re likely already familiar with the Interbank Exchange Rate. If not, allow me to break it down for you. The Interbank Exchange Rate is the exact reason you want to use a credit card while traveling internationally. It garners you a better rate for things like hotels and dining. It’s a much better exchange rate than if you were exchanging cash.
So, what’s the problem? Well, this is where the small print comes in. The card may be garnering you a better exchange rate, but it may also be charging a foreign transaction fee – something many people don’t realize they’re being charged. According to financial expert, David Seaman, this fee is typically 3% – 4% of what you’ve spent. This may not seem like a lot, but according to Seaman, “if you spend $200 or $300 in a weekend, that added fee begins to pile up rapidly.”
The Right Card Makes All the Difference
So, how can international travelers protect themselves? It’s essential to have peace of mind while traveling abroad, but if you’re constantly worried about hidden fees, it’s nearly impossible. The secret is traveling with the right credit card, one that’s designed for international travel and one that doesn’t have any hidden fees.
So, how can one locate the perfect card for the trip? Theta Tau, a co-ed engineering fraternity and a philanthropic sponsor of NerdWallet, offers a solution to this problem. Users can visit the site and use the comprehensive tool to search a database of quality credit cards.
Nerdwallet’s tool will only populate the cards you want: cards based on rewards, with cash back options, best interest rates, and so much more. That way, you only get credit cards that are relevant to your situation. You can read through a card’s information, deciding if it’s the right card for foreign travel or not. Look for cards that are specifically designed for travel and it’s likely you’ll be treated to the best rates.
So, you’ve found some cards that don’t feature those annoying foreign transaction fees. Now, it’s time to narrow down your selection to the absolute right card. This all depends on your preferences. For instance, if you love to dine out on vacation, you’ll want a card that rewards you for eating out. If you prefer cash back bonuses, go with the card with the highest cash back percentage.
Other options include:
• Bonus airline miles
• Sign-up bonuses
• Low APR or no annual fees
• Affinity programs (typically used for business travel)
• Store-specific cash back cards
Preparing Your Card for Travel
When you’ve finally narrowed down your selection, applied, and been approved for a credit card, you’ll want to contact your credit card company and prepare the card for travel. Let your credit card company know where you’ll be traveling and using the card. This will ensure they don’t freeze the card due to fraud suspicion.
If you’re planning on backpacking your way through a few countries, let your credit card company know which countries the card will be used in. This is going to ensure your vacation is all fun and no fuss over fees.
Extra caution: If you are traveling solo, make sure you have an extra backup card in case of a damaged card or if it does not work for any other reason. We have experienced it several times, certain card not working in certain places while working excellent in others.
Lifecruiser Love Trip Preparations