Dear Opening Credits,
I'm going on vacation for the holidays and will be out of the country for about two weeks. What should I do with my credit cards? Which should I take and is there anything I need to know before I use them abroad? -- Karyn
Dear Karyn,
I'm so glad you asked! It's common for eager vacationers to leave without doing any credit card prep work. That can expose them to costly and highly inconvenient problems. To reduce the chance of troubles erupting while you're off having fun, follow this easy five-step plan:
Take the right cards. First, go through your wallet and determine which cards you won't be using your trip. For example, you may have some retail or gas accounts, but the chances you'll need them are slim. Remove any extraneous cards and stash them in a safe place in your home.
After that, identify which cards you do want to have with you. Make sure they are general purpose cards that can be used anywhere and that you have a large enough available credit line for your charging needs. Careful not to pare your cards down too far, though, says Ken Clark, certified financial planner and author of "The Complete Idiot's Guide to Getting Out of Debt," who explains that having a spare can provide a crucial backup in case one stops working.
Make copies of those cards. Once you know which plastic you're taking, do what the U.S. Department of State recommends: Make two photocopies of the credit cards as well as your passport identification page, airline tickets, driver's license and other important documents. Leave one set of copies with someone you trust at home and pack the other set separately from your wallet or handbag. In the event of theft or loss, you'll be grateful for those copies, as you'll need them for reporting purposes.
Alert your credit issuers of your itinerary. Why does your creditor care about your exotic journey? Well, they don't, really. What they are concerned about is whether it is you who is charging all that duty-free rum at the airport. If you use a card at a few ATMs or stores where you've never charged before, it could trigger a fraud alert and cause them to shut down that card. Specifying your itinerary will prevent that from happening. Oh, and this goes for your bank's debit card, too. I found this out the hard way when I was on vacation and tried to buy groceries at an unfamiliar supermarket. The checker said my account was compromised -- and though it was just a temporary fraud freeze, those are mighty scary words no matter where you are in the world.
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While you're on the phone, also ask about your credit limit. "Too many travelers have gotten to their destination only to realize that there was not enough room on their card to pay for the planned expenses," says Clark. If you'll be out of town during a billing cycle, let them know and make an extra payment now.
As for those left-behind credit cards, you may also want to give those issuers a call and tell them you'll not be using them for the time you'll be gone. It's just a little added protection against identity theft.
Plan for foreign transaction fees. Since you're leaving the country, be aware that using your credit cards overseas can mean extra costs. Double-check your credit card issuer's foreign transaction fees before you go, and include them in your vacation budget. "Most issuers charge an additional fee -- typically 3 percent -- on top of your purchases when you're using your card to purchase something in non-U.S. dollars," says Clark. Therefore, if you do take multiple cards on your trip, use the one with the lowest currency exchange fee, and keep the others for emergencies. (Compare credit card foreign transaction fees.)
Maximize your credit cards travel benefits. On a positive note, don't forget that many credit cards are equipped with valuable travel benefits -- and now is the time to know what yours are. For example, you could have addititional rental car insurance, lost baggage insurance, travel-accident coverage, concierge services and special deals on car and hotel rentals. Vacations are expensive enough; make the most of what you have.
Erica Sandberg's articles and insight are featured in such publications as the Wall Street Journal, Pregnancy, Babytalk, Redbook, Bank Investment Consultant, Prosper.com, MSNMoney.com, and Smartmoney.com. An active television and radio commentator, Erica is the credit and money management expert for San Francisco’s KRON-TV, a frequent guest on Forbes Video Network, Fox Business News, Businessweek-TV, and all Bay Area networks. Prior to launching her own reporting and consulting business, she was affiliated with Consumer Credit Counseling Services of San Francisco where she counseled individuals, conducted educational workshops, and led the media relations department. Erica is a member of the Society of American Business Editors and Writers, and on the advisory committee for Project Money.
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