If used the right way, your credit card can serve you better while traveling abroad compared to good old cash. Many travelers are too concerned with the exchange rates and focus on finding the best rate when they go abroad, ultimately converting too much money and then spending it all. Experts recommend using Visa and MasterCard, because they offer very good rates and protect holders from the risk of getting money stolen as well as getting excess foreign currency. What is more, Visa and MasterCard are accepted almost everywhere.
There are certain measures one needs to take as to benefit fully when using credit cards as a means of payment abroad. First, you should take the time to learn whether your credit card has a foreign transaction fee. Being unaware of such fees can result in unpleasant surprises when you come home and get your statement. Some credit cards have fees in the range of 2-3 percent, which are levied on expenditures made while abroad. All you need to do is ask the issuer about this. If it doesn’t, you won’t have any problems. Sadly, all the major credit cards in Canada have such fees. Canadian residents should apply for credit cards with the lowest possible foreign transaction fees. You can also get a credit card issued in the US if you have dual citizenship or relatives who are US citizens. Some US-issued cards do not have such fees.
Make sure you inform your issuer that you intend to travel abroad so that your card is not suspended or closed on grounds of suspicious use. This has happened to many unfortunate cardholders, simply because they failed to notify their issuer about their trip.
Another point to consider is dynamic currency conversion. This is something you should watch out for. This is when salespeople offer to convert your purchase total into Canadian currency. If you are in unfamiliar surroundings, this might seem like they are doing you a huge favor. You should be aware that the rates they charge are far from favorable. They are only taking advantage of your ignorance.
Some Canadian credit cards use magnetic security stripes, which is why you must have some ID with you when using such a card to make a purchase abroad. Merchants will require you to show some ID. Most Canadian credit cards are equipped with far more advanced security features, which renders this a negligible concern.
Do not neglect the possibility of earning reward points for using your credit card overseas. Inquire about potential reward programs. Before you use your card overseas, take the time to read your cardholder agreement. Ask as many questions as possible.
If you find that the terms of international use offered by your credit card issuer are less than favorable, pick an internationally friendly option. Get a card that will be accepted in most countries. Always carry your card issuer number with you, so you can call them if you have an unexpected problem. You need a number for international calls. Also, make sure you know how to proceed if your card is lost or stolen.
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