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Have card, will travel: A guide to traveling with a credit card

What you need to do before, during, after the trip

By Jodi Helmer

Planning a vacation requires more than just booking a flight, packing sunscreen and withdrawing foreign currency. You also have to take steps to ensure it's safe to use a credit card while you're traveling. Before you book a plane ticket or buy a souvenir shot glass, follow these tips to protect your credit: Have card, will travel

Before the trip
Call the bank: There is nothing more embarrassing (and alarming) than having the waiter at a sidewalk café in Paris announce that your credit card has been declined. "Because we constantly monitor customers' accounts for fraud, their account activity in a foreign country could raise a red flag," Samuel Wang, a spokesman for Citi said in an e-mail. "Calling your issuer prior to your trip to let them know where and when you'll be traveling will reduce the likelihood of your credit card being suspended for suspicious activity." Card issuers including Bank of America and Capital One recommend cardholders call ahead to notify them of travel plans even if you're just traveling out of state.

Research foreign transaction fees: It can be expensive to use a credit card abroad. Find out just how much to expect to shell out in foreign transaction fees before boarding the plane. The fees vary by issuer, but can add up to 3 percent to the cost of foreign purchases. Call the card issuer to check on its foreign transaction fees. Some cards have lower fees than others. Capital One doesn't charge foreign transaction fees on its cards. It's also a good idea to clarify the meaning of "foreign" when it comes to fees. Some card issuers charge foreign transaction fees for purchases that are connected with a foreign bank. So, even though you were sitting in your office in Des Moines, Iowa, when you bought plane tickets on Aerolineas Argentinas for an upcoming trip to Patagonia, you'll likely be charged a foreign transaction fee.

Take notes: Double-check the available credit limit on your cards and verify their expiration dates to avoid having your cards declined while you're abroad. "Make copies of the front and back of your cards and store them in a secure location, like a hotel safe," advises Jim Randel, author of "The Skinny on Credit Cards: How to Master the Credit Card Game." Also, ask the issuer for the best numbers to call in case of emergency based on your destination. (The 800 number on the back of the card probably won't work if you're outside the United States). Personal finance expert Liz Pulliam Weston suggests programming the emergency number into your cell phone so it's always on hand.

Pick a card compatible with your country: Cards with the Visa or MasterCard logos are accepted in the most countries. American Express and Discover lag behind, though both are accepted in a growing number of countries. So if you're headed abroad, research whether your card is widely accepted at your destination.

Bring several cards as backups. If you are traveling with a family member, spouse or partner, it can be very helpful for each of you to carry credit cards from different issuers in case one of you loses a card through negligence or theft. Case in point: Gail Soechting of Jupiter, Fla., was traveling in Spain with her husband when he forgot his wallet in a taxi. Luckily, the wallet was returned, but it occurred to Gail that if they had to cancel his cards, her cards would be useless since she was carrying the same cards. Now when they travel together, Gail and her husband carry two cards each -- all from different issuers.

During the trip
Save your receipts: Cab fare to the Parthenon, admission to the Guggenheim, a pair of Italian leather shoes ... it's hard to keep track of the number of times you use a credit card on vacation. Saving receipts can ensure you're tracking expenses (and not being charged for something you didn't buy).

Choose wisely: You know the foreign transaction fees you researched before the trip? Stick with the card with the lowest fees while you're traveling, but keep a second, unused card as a backup. You'll save money on fees, and it'll be easier to track spending if you're only using one card. Use a credit card to buy plane tickets, reserve hotel rooms or rent a car. The Fair Credit Billing Act offers cardholders protection against charges for goods and services that were never received. "You also get a better exchange rate on your credit card than you do when you exchange cash or use travelers checks," notes Weston.

Carry cash: American credit cards have magnetic stripes, while much of the rest of the world is switching to "chip and PIN" technology. As a result, Americans are finding their old-style magnetic stripe cards may not work in some spots abroad. The problem is most acute at parking meters and transit stations, returning voyagers report. In addition, some shopkeepers might not accept credit cards and others may require a minimum purchase (so you might not be able to charge a handful of postcards or a bottle of water). To be safe, it's best to keep some local currency on hand. Randel warns that there are some times when it's better to pay with cash. "I wouldn't use my credit card at a street vendor," he says. "It's better to use plastic for larger purchases at well-known retailers and stick to cash for other transactions."

After the trip
Check your statement: Remember the receipts you saved while you were traveling? It's time to pull them out and check them against your credit card statement. "Compare the receipts to the statement to be sure you weren't double-charged or overcharged for anything," says Weston.

See related: Foreign transaction fees, foreign ATM fees for leading banks, You can now be charged a foreign transaction fee without leaving home, U.S. magnetic stripe credit cards on brink of extinction?

Updated: August 26, 2009


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