Travelling Abroad? 5 crucial things to know while using credit card
Before you go on a trip abroad, you must inform your credit card company about your travel plans.
Travelling abroad is expensive. While most of the expenditure such as booking tickets and hotel can be taken care of before departure, a good deal of transactions take place at the destination.
While it is not possible to avoid cash completely, using credit card would simplify your travel. You won’t have to worry about converting exact amount of money. It is also safer to carry credit card as cash can be stolen or lost more easily. Credit card if lost can be blocked with immediate effect by getting in touch with the credit card company.
Even for the ones who use cash abroad, credit card could come handy in case of additional expenditure. However, to make the most of it, you should keep the following in mind.
Check whether your credit card is valid internationally
Although most credit cards these days are accepted internationally, you might want to check with your bank before you set off. If you have a basic card which is not accepted internationally, you might get into financial trouble, as your card transaction would be declined.
Inform your credit card company of your trip plan
Before you go on a trip abroad, you must inform your credit card company about your travel plans. This would not just help you to get international access but also ensure authorisation for uninterrupted services. If there is any unusual transaction on a credit card, either of a high amount or internationally, credit card issuers call the credit card holders to authenticate the transaction. If your bank is not informed of your travel plans, it might call you for authentication while you are traveling and if your phone is not reachable, the issuer would reject your international transaction on safety grounds.
Know your spending limits
You might want to check your credit limit before taking off. Considering international transactions are relatively expensive, you might want to increase your spending limit if there’s a need for it. Once your credit limit is exhausted, transactions through your card would be declined.
Know your additional charges
Credit cards have some charges associated with them when it comes to transactions abroad. There is a foreign transaction fee applicable on some cards for every transaction abroad. This fee is usually between 2.5% and 3.5% per transaction. Check if your card is free from such charges. If not, you can apply for a no foreign transaction fee credit card.
There is also a currency conversion fee associated as your card is issued in Indian currency. When you transact abroad, currency conversion is done at the prevailing exchange rate. In order to pay for a transaction in foreign currency, there is a conversion fee levied by your credit card issuer.
When you use your card to withdraw money from any international ATM, you are charged with a cash advance fee. This fee also ranges from 1% to 4%.
Beware of card frauds
Cloning of credit cards, stealing credit card data, fraudulent transactions are a common occurrence in certain countries. So, when you use your credit card internationally, exercise caution to protect it against fraudulent practices.
Credit cards provide ease of transaction and if used smartly when travelling abroad it can help you to manage your trip in a cost-effective manner. However, decide on your spending instrument before setting off so that you are not bogged down with worries while you are travelling.(The writer is CEO of BankBazaar.com)