Taking a credit card on a foreign vacation: 10 tips

On balance, it's a smart move, but expect fees, take precautions

If you're taking a foreign trip, a credit card can be the best and safest way to pay for travel costs.  Even so, it pays to take precautions when traveling with plastic, especially when leaving the country. These 10 tips will help smooth the way.

The first tip is so obvious we won't even count it among the 10: For overseas travel, vacationers will want to choose a credit card that is widely accepted.  Guidebooks for the region you plan to visit often say which credit card to bring along.  In general, credit cards from MasterCard,  Visa or  American Express are safe bets. Discover cards are broadening their international reach,  but still have a ways to go to catch up.  

Now, on to the 10.

Shopping and credit cards
Shopping and credit cards

Don't allow a convenience to become a curse. If you frequently purchase with plastic, CreditCards.com offers useful tips to help you become a savvier shopper.

1. Expect fees.
Even if your credit card is accepted abroad, there may be new fees involved.  Harrine Freeman, CEO of H.E. Freeman Enterprises and a speaker, columnist and author says, "It may be tempting to use a credit card abroad, but beware of the costs associated with doing so -- ATM fees charge up to 2 percent for every transaction, and some companies penalize you about $5 every time you take out $100 from an international ATM." Foreign transaction fees vary by issuer, but can add up to 3 percent to the cost of every purchase. In recent years, the industry has broadened the definition of what a "foreign" transaction is: Even if you stay at home, if you conduct business with an overseas firm that uses a foreign bank, that could incur a fee.

Call your bank before you leave town to find out how they treat credit card payments outside the United States. Freeman also suggests checking the currency exchange rate before traveling abroad. 

Although you may have been aware of fees your bank charged in the past, a number of issuers have made changes to the amount of fees levied on foreign transactions.  If you want to avoid such fees altogether, find a card that charges no foreign transaction fees. As of June 2009, the largest such issuer is Capital One.

2. Let your credit card issuer know your plans. 
If you fail to update them, your unusual location may be flagged and cause them to block further charges, since the issuer may think that your credit card or account data has been stolen.  Although it is easy enough to call the issuer if a shut-off occurs, there's often a delay before you can re-access your credit. 

3. Get an in-country phone number.
The 800 number you currently have will probably not work outside the United States.  Contact your issuer and get one that works where you're traveling. While you're at it, find out how the issuer will get a new credit card to you should you lose your plastic or have it stolen.  Often, the issuer can have a new credit card couriered to you with a day or two, though it may come with a fee.

4. Double-check your credit limit and card expiration date
It could ruin your trip to suddenly discover that you are unable to pay for various vacation expenses once you are already abroad.

5. Store your credit card account numbers somewhere secure.
Leave them in a password-protected location on the Web or a safe, in case your plastic is lost or stolen while away from home.  Another good idea is to carry credit cards from more than one bank, with the second credit card acting as an unused backup, for use only if you should you have problems with the first. 

6. Stick to one credit card.
Using a single card (unless there's an emergency -- see No. 5) will make it easier to budget and to track your spending when you return home.  A credit card is safer than cash if you are robbed, but it still should be stored away in a hidden place such as a money belt.

7. Retain the receipts from your vacation spending. 
That will make it easy to ensure there are no unusual charges when you get your statement, since you do not have the same rights to dispute charges made while abroad as you do back in the U.S.  In case anything crops up later on a credit card statement, hang onto receipts from foreign countries for longer than you normally would.

8. Carry some cash.
If you decide to pay with a credit card at a given location, first make sure the restaurant or merchant accepts the plastic in your wallet. While some foreign merchants may proudly display a given credit card insignia, taking that credit card may be an entirely different matter.  It pays to have a little extra cash on hand just in case you find out you cannot pay with your credit card when the bill arrives. 

9. Watch out for double-billing.
It can happen: You reserve a hotel or rental car with your credit card, then decide to pay in cash. When the credit card bill comes, surprise! You got charged anyway. Keep that cash receipt. If you are charged twice but don't have your cash receipt as proof of payment, you will be out of luck.  Instead, it is generally better just to pay with the credit card number the hotel or car rental agency already has on file.

10. Be careful at restaurants.
When paying a restaurant tab with a credit card and leaving a cash tip, a dishonest waiter could fill in the space on the receipt for adding on a tip.  To avoid this, you can note in the space provided that "the tip is on the table," or a similar remark, to prevent an additions without your consent.

Although there are some issues to be aware of when paying with a credit card overseas, you are still afforded a level of ease and protection not offered when using cash, a debit card or check.  With all the exercise we give our credit cards during the rest of the year, don't they deserve the chance to travel at holiday time?

See related: Foreign transaction fees on the riseCredit card fraud monitoring can block legitimate charges

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Updated: 04-24-2018