Using a credit card when traveling can be convenient and safe, but there are several important things to consider. Here’s a guide on how to use your credit card while traveling. Still, the act of using a credit card does not in itself make overseas spending cheaper. By following these four tips before you leave and while traveling, you can make that goal a reality.

How to Use a Credit Card When Traveling

1. Inform Your Bank/Issuer Before You Travel
   Contact your credit card provider to notify them of your travel dates and destination. This helps prevent your card from being flagged for suspicious activity and temporarily blocked.

2. Understand Foreign Transaction Fees
   Some credit cards charge a foreign transaction fee (usually 1-3%) when you make purchases in another currency. Check if your card does this, or consider using a card that doesn’t have this fee.

3. Carry Multiple Payment Options
   Take more than one credit card with you in case one doesn’t work or gets lost. Also, carry a small amount of local currency for smaller purchases where cards aren’t accepted.

4. Use Credit for Major Purchases
   Credit cards often offer fraud protection and better exchange rates than currency exchanges. Use your card for hotel stays, shopping, and dining. But check if the merchant accepts cards, as smaller shops may prefer cash.

5. Check Currency Conversion Options
   When paying by credit card, you may be asked if you want to pay in the local currency or your home currency. Always opt for the local currency to get a better exchange rate from your credit card company, instead of a potentially higher conversion rate from the merchant.

Do Credit Cards Automatically Convert Currency?

Yes, credit card companies automatically convert foreign currencies to the domestic currency using their exchange rate. When you look at your card statement, the amount charged will be in the domestic currency.

Do I Need to Tell My Credit Card Company I Am Going Abroad?

You do not necessarily have to tell your credit card company that you are going abroad in order to use your card internationally. Your card will usually work, but there is a chance that transactions may be blocked, particularly for large amounts. It is always prudent to let your card company know you will be abroad and when to ensure your charges will not be blocked.

The Bottom Line

While overseas travel can be both confusing and expensive, there are ways to minimize the cost and hassle of spending abroad.

As long as you have a credit card with no foreign transaction fees, notify your credit card company of your travel plans, and only pay for purchases expressed in terms of the local currency, you should be able to avoid post-trip credit statement surprises.

Ultimately, a trip overseas shouldn’t be characterized by worries over conversion rates and handling foreign money. So get the right cards before leaving and let your focus to shift to its rightful place: having a good time or getting down to business.

5 Frequently Asked Questions About Using Credit Cards While Traveling

1. Will I be charged fees for using my credit card abroad?
   Yes, many credit cards charge a foreign transaction fee, typically ranging from 1% to 3% of each transaction. Some travel-oriented cards, however, do not charge these fees, so it’s a good idea to check your card’s terms.

2. What should I do if my card is lost or stolen during travel?
   If your credit card is lost or stolen, immediately contact your card issuer to report the loss and request a replacement. Most issuers have 24/7 customer service for emergencies. Make a note of your card issuer’s international contact number before leaving.

3. Is it better to pay in the local currency or my home currency?
   It’s almost always better to pay in the local currency when using your credit card abroad. This avoids dynamic currency conversion (DCC), where the merchant offers to convert the amount into your home currency but usually charges a poor exchange rate.

4. Can I use my credit card to withdraw cash abroad?
   Yes, but this is generally not recommended. Using a credit card to withdraw cash, called a cash advance, usually comes with high fees and interest rates that start accruing immediately. Use a debit card for cash withdrawals instead, if necessary.

5. How can I avoid fraud while using my credit card abroad?
   To avoid fraud, use your credit card only at trusted locations. Avoid public Wi-Fi when accessing banking apps or websites, and enable credit card alerts (via email or text) to track your purchases in real-time. If you notice any unauthorized transactions, report them immediately.