First things first: before you travel, call the bank that issued your credit cards!
That’s rule number one and will make your trip so much easier. If you are not a frequent traveler, your bank knows your travel history and may believe the foreign charges are fake. If so, they will block the card and deny the charges. Also, some banks will not allow their credit cards to be used in countries where fraud is a known problem. It’s best to know if your bank has these restrictions in place before you travel. Example, you can’t use a credit card in Cuba.
One of our credit cards was issued by our credit union. When we notified our credit union we were traveling to Southeast Asia, we were told any charges in China, Viet Nam, and Cambodia would be denied. While on the trip, we attempted to use this card in China and the charge was denied -- I wanted to “test” their system. Fortunately, we had other credit cards with us on our trip.
When we travel, we carry a minimum amount of cash. We use our credit cards for hotel, transportation charges, food, and souvenirs. We do carry a debit card so we can withdraw local currency from ATMs.
When you use a credit card, the merchant may try to charge your purchase in US currency. If so, ask them to charge the purchase in local currency. You will get a much better exchange rate from your bank. Caveat: you may be charged an international transaction fee.
Many credit cards will charge an international transaction fee when their cards are used in another country. The transaction fee is normally 2% or 3% of the cost of the purchase. Before you travel, check other credit card offers, some credit cards are “foreign transaction fee” free. We have one of these cards and use it as our primary card when we travel.
There are three types of credit cards in use:
- Swipe & Sign
- Chip & Sign
- Chip & Pin
The swipe & sign cards are old technology cards that are being replaced in the US. The cards were swiped thru a card reader and you signed the billing slip. You can still use these cards, but it’s getting more difficult in Europe.
If your card was replaced within the past year, the new card is probably a “chip & sign” card. These cards have computer chips, but still require a signature. The newer cards in the US are this type.
Most of the world is using the “chip & pin” technology. This works like our debit card. Since all our credit cards are chip & sign, we have had some issues when we tried to use the cards at a kiosk and in a taxi. No way to collect a signature and we don’t have a pin. We are hopeful US banks will begin issuing pins for credit cards.
If you plan, you can use your credit card when you travel just as you can in your neighborhood.
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