You would think that dealing with money while traveling abroad would no longer be a big deal in 2011. After all, in the modern world, there’s no more need for traveler’s checks or cash hidey-holes stitched into your clothing. Just a quick swipe of a credit card, and you’re ready to go. Unfortunately, the magic of credit cards does not necessarily mean that your trip abroad will be smooth sailing. Here are some of the unexpected pitfalls you may encounter when traveling overseas with your credit card—and how to deal with them:
Avoid credit card problems while traveling abroad
1. Having your card shut down. If you neglect to mention to your credit card issuer that you will be traveling, that can sometimes flag your foreign purchases as suspicious activity. If you’ve ever had unauthorized charges on your card, you know that your credit card company will contact you to determine if the suspicious charges are legit or not. If you’re out of the country, the issuer will not be able to reach you through the normal channels and will assume someone has stolen your card, leaving you with a useless square of plastic in the middle of a charming village on the Mediterranean.
- The Solution: Call your credit card issuer’s customer service line to give them a head’s up a few weeks before your trip.
2. High international transaction fees. Some credit cards make out like bandits on international transactions, where they charge “currency conversion fees.” These fees are generally a percentage of the dollar amount (meaning the cost in foreign currency is converted by the credit card company). What makes these fees really insidious is the fact that both the credit card company (think Visa or MasterCard) and the issuing bank charge their own separate fee.
- The Solution: Find out ahead of time how much you will be charged for your purchases on vacation. Some credit card companies, including Capital One and certain American Express cards, have no international transaction fees.
3. American cards might not work at all in Europe. All American credit and debit cards rely on magnetic stripes in order to process information. Unfortunately for American travelers in Europe, the old country has almost universally switched over to microchip technology, meaning your cards could be useless. While MasterCard and Visa require all merchants to accept their magnetic-stripe cards, sometimes cashiers (and unmanned pay kiosks) are unable or unwilling to accept your American plastic.
- The Solution: Travelex offers a preloaded MasterCard debit card that features the microchip technology accepted all over Europe. This is a great card to carry with you for the instances when your card isn’t accepted—but don’t let it be your only way to pay. While there is no fee for using the card, the exchange rate for loading it with foreign currency isn’t great.
4. Identity theft. As much of a nightmare this might be while you’re home, it’s that much more difficult to deal with while abroad. Though European countries do not have a great deal of crime, pickpocketing is rampant. So it’s important to keep your wallet and credit cards in a difficult-to-reach pocket in crowds and be vigilant when you are using the cards.
- The Solution: The best way to deal with theft of credit cards abroad is to cancel them as soon as possible. So make sure you write down your account number and card issuer’s contact information and place it all in a safe spot (like a discreet pocket in your luggage).
A little planning ahead can ensure that using your credit card will be the safest and most convenient way to pay while you’re abroad.