One of the biggest differences between domestic and international travel is the way you manage money during your trip. After all, when you’re at home, you don’t have to worry about exchange rates, foreign transaction fees, or whether you can access cash at an ATM. Traveling internationally is a different story, though. If you’re planning a trip and wondering how to manage money while abroad, here’s where to start.
How to Use a Credit Card Internationally
Many travelers use credit cards when paying for big expenses such as hotel stays or fancy meals out. But unless the credit card you use doesn’t charge foreign transaction fees, you could wind up paying much more than anticipated. And that can quickly turn a great deal into a not-so-great deal.
Here’s how foreign transaction fees typically work. If you use a credit card that doesn’t waive foreign transaction fees at a foreign retailer, your credit card issuer will charge you a percentage of the bill. This fee is usually 3%. And while 3% of the cost of a croissant and a café au lait probably won’t hurt your wallet, other expenses might.
For example, imagine you stay in Paris for a week, and the hotel bill with tax is $3,000. Use the wrong card, and when you get home, you could find that you owe $3,090, just because you paid with credit instead of cash. When you use a no-foreign-transaction-fee credit card, such as one of PSECU’s Visa Credit Cards, your credit card issuer will not charge that fee, potentially keeping your bill $90 less.
Other international credit card tips include:
- Check with your credit card issuer to understand how purchases are converted to U.S. dollars. If you’re planning to use your card for purchases abroad, check with your credit card issuer to determine whether it’s better to make purchases in the local currency where you’re traveling or U.S. dollars. Their answer may depend on factors such as the exchange rates available to them and any fees they face when processing your international transactions that are passed on to you.
- Make sure your credit card has a security chip and a PIN. U.S. consumers have been inserting their cards instead of swiping them for several years, but at many European retailers, consumers insert a chipped card and enter a personal identification number. Before traveling, research the region you’re visiting to determine if your chip-and-signature card will work. If it won’t, find out if you can get a chip-and-PIN card before you travel.
- Read your credit card’s benefits carefully. If you rent a car while traveling and your credit card offers auto rental insurance, check to see if that coverage extends to international rentals. Additionally, if your credit card offers rewards for certain spending categories, find out if international charges qualify.
- Don’t rely too much on your credit card. You may be surprised that many attractions, even in well-developed countries, don’t accept credit. Always carry some cash with you so you can be prepared in case you can’t use your card. Street vendors, parking garages, and flea markets are just a few of the places that often only take cash, so make sure you’re prepared.
- Let your credit card issuer know before you leave the country. Few things are more embarrassing than having your credit card declined. Let your credit card issuer know when you plan to travel so you don’t experience inconveniences.
How to Exchange Currency
Using a credit card with no foreign transaction fee is a no-brainer for big expenses, but keeping local currency on hand is critical, as well. Be careful, however, about where you exchange your money. Some places charge huge premiums for foreign currency exchange, and that can take a big bite out of your travel budget.
Convenience fees and poor exchange rates are why you should generally avoid changing currency in these places:
- At airport currency exchange kiosks
- At currency exchange businesses near tourist attractions
You should also be leery of individuals offering currency exchange services outside of a reputable business location.
To get the best exchange rate:
- Know what you should pay. Currency exchange rates are available online, and they change daily. Download a currency exchange rate app on your smartphone so you can check it if you need cash when abroad.
- Use your debit card at an ATM when you land. If you don’t have time to order currency, use your debit card at a foreign ATM. If you use your PSECU card, you won’t face foreign transaction fees, and if you use an out-of-network ATM and get charged, we’ll rebate fees up to $20/month with direct deposit, and up to $8/month without. If you’re not using a PSECU debit card, check with your financial institution to find out if you’ll pay foreign transaction fees when using your debit card internationally.
- Order currency online. You can also consider ordering currency online from a reputable source. Check the exchange rate before you buy to make sure you’re getting the best deal possible.
Enjoy Your Trip
International travel is more relaxed and enjoyable when you don’t have to worry about paying fees or having trouble accessing your money. The PSECU Founder’s Card can help you do more abroad with no foreign transaction fees.