Five tips for using your credit cards overseas

Five tips for using your credit cards overseas

Credit cards are a great companion when jetting abroad – you don’t need to juggle wads of foreign cash, and they’re easy to replace if lost or stolen.

On the other side of the coin, they can also trap unsuspecting travellers with hidden fees, poor exchange rates or confusing merchant names, so it pays to be wary.

Here are our top five tips for seamlessly using plastic on your next overseas trip.

1. Let your bank know you’ll be travelling

It’s always a good idea to let your banks and credit card providers know that you’ll be travelling.

Most card issuers will add a travel note to your account, which avoids your foreign spend from triggering any fraud alerts.

If you forget to notify your bank, your card might face a temporary block for ‘suspicious activity’, resulting a stressful and costly phone call before you can continue spending.

Also, it’s a good idea to have your financial institutions’ international contact details in your phone’s contact list.

If you part ways with a credit card, you’ll be able to quickly have it cancelled and replaced – likely before anyone else has the chance to use it.

2. Memorise your PIN

Many countries now require PIN verification instead of a signature for credit card purchases, so make sure you’ve got yours memorised.

Included on the list is the United Kingdom, Japan and Canada, with the U.S. joining the ranks from October next year.

Without a valid PIN, you risk being unable to shop, eat or even check-in when you arrive at your hotel, as some systems demand a PIN even for pre-authorisations (non-charges).

Australia is jumping on the PIN-only bandwagon from August 1, so get in early and request a PIN now.

3. Always pay in the merchant’s native currency

If your wallet sports a Visa or MasterCard, you’ll have been asked “would you like to pay in Australian dollars?” many a time.

Dynamic Currency Conversion allows merchants to charge customers in their home currency, with the system padding the exchange rate by 1-2% to make it worth their while.

With many Australian banks tacking on extra fees for foreign spend – even if billed in Australian dollars – you could be paying upwards of 5.5% more than necessary.

Stick to paying in the merchant’s native currency, and avoid being gouged by less-than-generous exchange rates.

4. Get receipts wherever you spend

Business travellers might already be accustomed to this, but make a habit of taking the receipt whenever opening your wallet.

Not only do they help with company expense claims, receipts make reconciliation a breeze when merchants show their entity name – rather than their trading name – on credit card statements.

Matching dollar amounts and transaction dates is also useful in Asia and the Middle East, where the local languages don’t use the Latin alphabet.

Better yet, carry a pen and make a quick note on each receipt – “lunch with George” or “drinks with Lisa” is much easier to reconcile than ‘30€ on June 2 at 8:42pm’.

5. Know your limits

Low credit card limits can be troublesome when travelling for an extended period, so never leave home (or your hotel) without knowing that you have money available to spend.

Hotel pre-authorisations – that’s the amount reserved on your credit card when you check-in – can take up to a week to be released, so consider using a separate card for hotel spend.

Travellers with higher credit limits or even those brandishing charge cards with no pre-set spending limits needn’t worry, but should nonetheless use internet banking to monitor their spend.

Over-limit and late payment fees still apply when you’re out of the country, so consider scheduling automatic bill payments to keep accounts up-to-date.

Further reading: Five credit card strategies to maximise your frequent flyer points

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Chris Chamberlin
Chris Chamberlin is a senior journalist with Australian Business Traveller and lives by the motto that a journey of a thousand miles begins with a single step, a great latte, a theatre ticket and a glass of wine!
 

5 comments

  • Chrisor

    Chrisor

    12 Jun, 2014 09:12 am

    Great advice.

    I have mentioned this before, but just for those who may not be aware, make sure you use a credit card for hotel pre-authorisations, not a debit card like Qantas Cashcard as they hold the funds for 30 days, possibly resulting in a negative balance appearing on your account.  Credit card pre-authorisations are only held for 5 business days.    

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  • Peter Loh

    PeterLoh

    12 Jun, 2014 10:17 am

    Credit card pre-authorization time limits are impacted by the agreement between the merchant and their bank, the credit card's issuing bank's policies and the payment network (Mastercard/Visa/Amex/Diners).

    "5 business days" is an arbitary number which may apply to your card & the specific merchant, but not to everyone's.

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  • Chrisor

    Chrisor

    12 Jun, 2014 12:04 pm

    True Peter, I should say "up to 5 business days". Apologies for any confusion.

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  • 11sjw

    11sjw

    12 Jun, 2014 10:52 am

    The 28 Degrees Mastercard is a great one for overseas travel (although no good for atm's anymore) with no fees.  One of those and a Citibank Plus account should see you through.

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  • NEquine

    NEquine

    12 Jun, 2014 04:50 pm

    I always use a different card for hotel accommodation because of the pre-authorisation from the card I use for other spending.

    No member give thanks

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16 Dec, 2018 10:47 am

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