Traveling soon? Using your credit card in other countries is becoming easier and easier, and banks and financial institutions have more solutions for these cases. It is just a matter of understanding the following:
Foreign transaction fees
This is a fee that banks normally charge when you use your credit card in a foreign country. It usually goes from 2-3% of the transaction value. They are imposed by the lenders to mitigate exchange rate risks when clearing international purchases.
Cards with no foreign transaction
Today many banks offer fee-free solutions that make travel cheaper and easier. If you travel frequently this comes in handy as this credit card model will save you a lot of money in fees. Partners such as Bank of America offer credit cards with no international fees among other traveling benefits. When choosing between credit cards, make sure to read about the benefits of each card; even if the cards have fees, there are reward programs that could benefit you.
Tips when traveling
- Notify your lender – By doing so, you will avoid any out-of-the-ordinary purchase from generating a blockage in your accounts.
- Read your card’s benefits – Knowing what perks and benefits your credit card has will help you travel and make you feel more comfortable. Most banks have travel benefits such as insurance or access to airport lounges.
- Cash, cash, cash – In many destinations, cash is still the most commonly used payment method. Always carry around 30-40% of your total expenses in cash. This will get you out of trouble in establishments where cards are not accepted.