7 Tips to use credit cards when you are traveling

by brian on June 25, 2010

Guest Post by Jason Holmes!

When you’re traveling abroad or within your country, you may find it convenient to use a credit card to purchase items or pay for hotels. But you need to follow healthy credit card habits so as to save big bucks and avoid fraud or identity theft.

Tips to use credit cards while you’re traveling

1. Inform your card issuer about your trip: You should find out whether or not your card will work where you’re traveling. This is because there are card issuers who may put a hold on your cards when these are used in areas where you don’t reside. If you’re going on a trip abroad, you need to check what exchange fees or transaction charges you have to pay. Most card issuers charge currency conversion fee every time you purchase an item in a foreign currency. However, there are card issuers who may not charge a fee at all.

2. Know your credit card PIN: The PIN is something that you need to memorize and not write down on paper. Especially, if you’re traveling abroad, you’ll need the PIN as it is required by some countries to authorize transactions on your card. Without a PIN, they may decline the transaction.

3. Make sure your card doesn’t expire: If you’re in need of emergency cash and your credit card expires, you may be in trouble. So, if you order replacement cards while you’re planning a trip, you can avoid last-minute hassles. While you order replacement cards, make sure you allow a minimum of 5 business days for the card delivery.

4. Protect your card from thefts: When you use cards for transaction, make sure you shield your PIN at the time of using an ATM. If your PIN combination includes your date of birth in any format, I would suggest that you change it to random combination. That’s because the fraudsters involved in credit card thefts can easily find out your PIN from the details available in your wallet.

To protect from any theft, you should have more than one card. What you can do is, keep your cards in separate bags to minimize any chances of the cards being lost or stolen. You should have backup cards as not all types of cards are accepted everywhere. And in case your card is stolen, immediately inform your credit card issuer so that he can put a stop on the card and replace it with another.

5. Avoid fraud and take action: If you find a merchant swiping your card through more than one machine, chances are that he may be a fraudster. So, question him as to why he’s doing so and contact your card issuer if you suspect fraud. When you’re paying for a purchase or a meal, hand over your card to the cashier and remain there till the card is swiped. Avoid handing over your card to an employee who goes out of sight to process the payment. This is to prevent the person from stealing away your card details.

6. Don’t go for credit card cash advance: You shouldn’t use your cards to obtain cash from an ATM. You may be charged a fee ranging from 3% to 20% depending upon the bank which has issued the card. Even though you may go for a cash advance, yet you should avoid using the ATM. That’s because the financial institution which owns the ATM charges a fee for cash advance transactions. Moreover, one needs to pay interest charges on cash advances. This interest rate is much higher than the rate associated with purchase transaction on credit cards. It can range from 20% to 25%.

Another disadvantage of cash advance is that it doesn’t have a grace period. This implies that the interest starts accruing as soon as you withdraw money from the ATM. So, even though you may fully pay off your credit card balance when you receive the bill, yet there’ll be a finance charge imposed on your card.

Moreover, most credit card companies apply your payments to purchase transactions first and then to cash advances. So, if your payment is fully applied to purchase and nothing is applied towards the cash advance, then you have to pay more finance charges. Also, there’ll be a higher interest rate charged on your card and you’re likely to rack up higher credit card debt unless you keep making extra payments on the principal at regular intervals.

7. Protect your card limit: When you reside in a hotel while you’re on a trip, ask the staff as to how much they’ll charge on your card for insurance and incidentals. You need to be cautious as the hotel staff can simply exhaust your card limit with a single swipe.

While you may use credit cards during your trip, it is important that you carry with you some cash as well. This is to ensure that you don’t accumulate too much credit card debt. It is advisable that you have sufficient local currency in case you’re traveling abroad. This is to make sure that you can carry out immediate expenses without any hassle.

Jason Holmes is a regular writer with Debt Consolidation Care and is also a contributor to other financial sites. His expertise is woven around various aspects of the debt industry and with his e-books he tries to impart to people the different situations and simple solutions to get out of difficult situations. Some of his works include e-books like Credit Score: The Quintessential Therapy for a Happy Pocket, Take Creditors and Collection Agencies to Small Claims Court, and My Story- From Depression to a Smile.

{ 5 comments… read them below or add one }

GlobetrooperTodd June 25, 2010 at 3:35 PM

Yep, I think we broke 4 of those rules in the first week of arriving here. Forgot to tell the bank we were travelling, so card got rejected at first hostel. Lauren forget her PIN, which is actually called a NIP here. I almost left card in a machine yesterday; they don’t return the card immediately or beep like crazy like they do at home. And then we went past our excess cash and started drawing cash advances without knowing. :)

All is good though, having a ball and spending below budget.

Great tips, even if three weeks to late for us . :)


brian July 11, 2010 at 3:49 PM

Experience is the best and worst teacher, isn’t it?


Dave and Deb June 27, 2010 at 1:00 AM

Excellent advice all around.


Earl June 29, 2010 at 3:47 PM

Good advice and if you’re going to spend a lot of time overseas, I can highly recommend the Capital One credit card (at least for US citizens, although they will give non-US citizens a card if you apply directly at one of their bank locations). There are no fees at all for international transactions and in the event of fraud (which did happen to me in Mexico), they are very responsive and helpful.

I know that sounded like an advertisement but I’ve just been very pleased with their no-fee credit card so far!


brian July 11, 2010 at 3:45 PM

Charles Schwab has a good card for international transactions. I’m surprised more companies don’t use that as a selling point. I guess they figure they make more off the international transactions fees than removing them and getting more overall users of the card.


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