A Travellers’ Guide to Using Credit Cards Overseas

in Travel Tips

Using a credit card is second nature to most people, so you may not think twice about using your card as you travel around Europe. However, while credit cards make a lot of sense in terms of affordability and security, you may need to make a few adjustments to your account before you leave. These are usually simple things like memorising your credit card PIN as transactions processed in the UK and Europe primarily require a PIN rather than a signature.

So check out this comprehensive guide to preparing your credit card for travel, keeping your details safe overseas, and how to manage your account upon your return.

Why credit cards?

Credit cards are just one form of payment you can use when travelling but their many benefits may endear them to you and your spending and travelling style. For example, credit cards:

  • Often include free travel insurance. If you purchase your flights or book your accommodation using your credit card, some providers will cover you and your family with free travel insurance. Typically a feature of gold credit cards travel insurance usually covers you for cancelled flights, lost or stolen bags or luggage and emergency care.
  • Offer cheap and easy payments. The currency conversion fee you pay each time you use your credit card is generally less than the fee charged when you use travellers’ cheques so you can save money, as well as time in exchanging travellers’ cheques and providing identification. You are also protected from losing all of your cash if your bag or wallet is stolen.
  • Provide ATM access. If your credit card is linked to the PLUS or Cirrus networks then you can withdraw cash from your credit card at an ATM in over 200 countries.
  • Include purchase protection. Some credit cards will offer purchase protection on items you buy so that if the item is lost, stolen or broken within 30 or 60 days you can have the item replaced or be refunded the money.
  • Purchases and usage can be tracked. Not only can you see on your itemised credit card bills how much has been spent, your provider will also have sophisticated systems to check for fraudulent use of the card, and will contact you if they notice anything strange.

Prepare your credit card before you leave

To make your overseas credit card usage a smooth and easy transition, there are a few things you will need to organise before you leave. First make sure you have the right card by taking some time to compare the fees and charges for overseas transactions on your card, with other cards on the market. Look for a card with a low annual fee, a low interest rate and low exchange fees to make sure you really are saving money, and weigh the true benefits of a credit card rewards program against the higher interest charges and fees.

Also make sure to choose a universal card type to travel with, and both Visa and Mastercard are widely accepted around the UK and Europe. To prepare your credit card for the trip:

  • Tell your credit card provider you’re leaving. Often overseas transactions on a credit card can flag a provider’s fraud department so be sure to tell them where you are going and for how long. You will also be able to check for any restrictions on your account or card type, and make sure that overseas usage is activated.
  • Confirm the fees for overseas transactions. Ask your bank for a schedule of fees for overseas credit card transactions so you can be prepared and organise your card use to be the most economical.
  • Set and memorise your PIN. In Europe many merchants do not offer you the option to sign for a credit transaction so it is important that you activate the PIN on your card and you can remember it without writing it down. Your PIN also allows you to make cash advances at an ATM and offers a second layer of security for your money if your card is lost or stolen.
  • Check the expiry date. Make sure your credit card is not going to expire while you are travelling, and if the expiration date falls within your holiday, ask your provider to reissue the card before you leave.
  • Budget for your credit limit. When you are planning to use your credit card as your primary payment method you’ll need to make sure you have enough available credit. It is much easier to have your provider increase your credit limit before you leave, rather than trying to prove your income while you’re in another country.

Using your credit card during the trip

To keep your holiday and your credit card spending on track, make sure you know which transactions will be charged the most fees. For example, using an overseas ATM usually incurs a fee of around $5 or 1.5% of the withdrawal amount, plus the currency exchange fee which is at least 2% of the transaction. Plus, when you use your credit card for a cash advance, the interest will begin to be applied straight away and usually at a much higher rate.

Also make sure to track your spending while you are away by keeping all of your credit card receipts. This not only helps you see whether you are staying within budget, but if you find you are overcharged for an item you will be able to show proof.

Just in case

Avoiding credit card emergencies when travelling is about being prepared and you should follow these few precautions to protect your credit:

  • Record your card numbers. This means writing down your credit card number and the contact number for your provider on a hard copy piece of paper and keeping it on your person – not in your wallet or bag. Visa and Mastercard both have 24 hour assistance for emergencies.
  • Pay off your card. Make sure that you have a low or zero balance on your credit card before you leave to give you maximum spending room, and also set up a direct payment to your credit card so that you can keep using your card while overseas, and you don’t have to worry about logging into internet banking from a shared computer to make a payment.
  • Take a second card. If your credit card is lost, stolen, damaged or just gives up from too many swipes it is much easier to carry a back up credit card than have another one issued while you are overseas. Keep this card separate from your active card in case you need it.
  • Protect your credit. When you are on holiday it is easy to forget the common sense security measures you take every day at home. This means only using your card with a reputable vendor, and using an ATM to withdraw cash if you are unsure about the store or seller. Also make sure to cover your PIN when you use your card.

When you return you will need to make sure you call your credit card provider to let them know you are back, and have them remove any additional overseas features. This will also help your provider alert you if your credit card begins being used fraudulently overseas.

This guest post was written by Timothy Ng. You can read more of his work at Credit Card Finder, where he has a number of comprehensive guides to all types of credit cards.


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