Most travellers carry a trusted personal credit card with them every day—especially when they travel abroad or overseas. Combined with travel protection, a credit card can benefit travellers by allowing them to monitor balances and earn travel reward points, and some credit cards offer additional perks such as no foreign exchange fees.
There are, however, some important safety tips and tricks to consider when using a credit card abroad. Money.ca shares five card hacks to get the most out of your credit card when travelling overseas (or over the border).
Can I use my credit card in another country?
Visa and Mastercard credit cards are widely accepted in most countries, and many countries are also seeing a growing acceptance of American Express cards. As many credit cards come with travel protection, it's good to charge significant expenses like flights and hotels to reap the benefits should something happen abroad, such as a delayed flight, lost luggage, or a medical emergency.
The best option to confirm if your credit card can be used in another country is to do a little prep work before you leave. Before departing on your adventure, notify your credit card issuer of your upcoming travels and to which countries you'll be visiting. Not only will you get confirmation that the card will work overseas but this notification will reduce the risk of your credit card company flagging your account for fraud or suspicious activities. Some banks allow you to notify them through their mobile app or website.
How to maximize the perks on your credit card when travelling to another country
To maximize the perks of a card, consider where you will spend the bulk of your money when planning and scheduling the trip, and the card requirements you will need once you are travelling. For instance, many frequent travellers swear by American Express credit cards when booking travel. While these cards are not as widely accepted for in-store purchases, they are great when planning and paying for travel-related purchases, such as flights, hotels, and car rentals.
Can I tap my credit card while travelling abroad?
Not all credit card terminals allow tap or contactless, and some won't accept chip and personal identification numbers. For instance, some countries require a six-digit PIN, while others still require you to sign a slip. To reduce the chance of having your card rejected, be sure to confirm your PIN before you depart. Also, call your credit card provider and see if additional numbers need to be added to the PIN when using the card overseas. In many cases, adding two zeros before your regular PIN is enough to enable you to use the card.
If you are travelling in the U.S., you may be asked to input your ZIP code when making a credit card purchase. The best practice is to enter the numeric three digits of your postal code plus two zeros, and the payment should go through. For example, for the postal code M1A 2B3, you will enter '12300' as your ZIP code.
Is there a fee for using a credit card in another country?
Many credit cards in charge a foreign exchange fee on every transaction, on top of the currency exchange rate back in your native currency. These fees are typically 2.5% of the purchase amount. Fortunately, there are plenty of credit cards that don't charge these foreign transaction or exchange fees.
Using a credit card over a debit card offers more protection, especially when travelling internationally. For example, someone could skim your debit card PIN if you insert your card into a fraudulent terminal. Other times, you may need an ATM for your cash debit withdrawals. Make sure you look for a reputable ATM, especially one offered by a central bank.
Benefits of using your credit card overseas
Don't miss out on the exciting travel benefits that credit cards offer. From rental insurance to access to premium concierge lines, hotel/airline benefits, and medical or travel interruption assistance, these perks can enhance your travel experience. Remember, these benefits come at a premium, making it even more important to have a credit card with you.
Which credit card is best for travel?
Ultimately, you will want to find a credit card that offers a benefit for use overseas, like one that does not charge a foreign exchange fee. Other cards will offer cashback on foreign currency purchases that help to offset the foreign exchange fee.
You also want to be mindful of dynamic currency rates set by networks like Visa, Mastercard, and American Express. These are typically shown on a payment terminal at checkout, and users are asked to select which currency they want to charge the payment to—the local currency or the Canadian dollar. It is typically best practice to choose the local currency.
What can I use instead of a credit card for travel?
If all else fails, make sure you have access to backup payment methods, including debit and cash. While credit cards are widely accepted in North America, there are countries where cash remains highly preferred or the only acceptable payment method.
It's essential to research before travelling, notify your credit card company, be vigilant while spending, and frequently review your credit card transactions on your bank's mobile app.
Finally, the government has an extensive resource offering travellers important information before heading abroad.
This story was produced by Money.ca and reviewed and distributed by Stacker.
