In this article, we’re discussing using a credit card abroad.
Not surprisingly, there are a number of important factors to consider before swiping your card at international retailers. We’ll discuss these factors and answer a number of frequently asked questions below.
This article is part of our free series on credit cards, covering topics on how to get a lucrative US credit card with an ITIN number and credit safety.
Feel free to use the table of contents to jump ahead to the sections most relevant to you.
Table of Contents
- Using a Credit Card Abroad
- Factors to Consider Before Using a Credit Card Abroad
- What Are the Benefits of Using a US Credit Card Internationally?
- Frequently Asked Questions
- Ready to Open Accounts With Banks in the USA?
Using a Credit Card Abroad
Using a credit card abroad can be expensive, including high currency conversion fees and foreign transaction fees. That said, certain credit cards offer preferred exchange rates and no (or low) foreign transaction fees. With this in mind, the first step in using a credit card abroad is knowing how much your specific card will charge you.
Of course, each credit card issuer charges different fees for using cards abroad. So, it’s important to check the specific terms and conditions of your credit card provider before making a purchase.
With this in mind, let’s take a look at the key factors to consider before using your credit card while traveling.
Before diving in any further, if this is your first time visiting GlobalBanks, don’t forget to download your FREE US Banking Starter Guide. It’s designed to help non-residents with opening bank accounts at top financial institutions in the US.
Factors to Consider Before Using a Credit Card Abroad
The factors to consider before using a credit card abroad include costs, billing cycles, the credit card closing date, insurance, notifications, and available bonuses. However, each of these factors includes sub-items that need to be reviewed. We’ll discuss each of these in greater detail below.
Costs & Fees to Consider
Many credit cards charge foreign transaction fees and currency conversion fees. If you plan on using a credit card while traveling, these fees can add up quickly.
With this in mind, it’s important to confirm whether your credit card provider charges transaction fees. If so, you can ask to confirm the rate before traveling.
Transaction Fees
In certain instances, foreign transaction fees can incur an additional charge of 2% to 3%, which can add a considerable amount to your credit card bill if you are traveling for an extended period of time.
Currency Conversion
Additionally, if you are making purchases in foreign currencies, you should expect your credit card issuer to apply a foreign exchange rate. That said, in certain instances, if you have a premium card, you may be able to secure a preferential rate.
Insurance Factors to Consider
Certain credit cards offer international travel insurance to cardholders. Not surprisingly, these cards are usually cards with annual fees that target frequent travelers.
In most instances, credit cards that offer travel insurance also offer free car rental insurance and trip insurance in case of canceled flights or lost luggage.
Travel Notifications to Consider
In addition to the fees and available insurance, a commonly overlooked factor is whether cardholders need to provide their credit card provider with notification before traveling.
In fact, whether your card provider requires notification or not, it can sometimes be helpful to let them know that you will be traveling. This is especially important if you do not frequently travel and if you are traveling to less developed countries.
Available Bonuses to Consider
Lastly, it’s important to mention that many credit card companies offer travel-related bonuses. These bonuses range from points that can be exchanged for future travel to purchase incentives at various locations around the world.
Credit Card Travel Rewards
In addition to free flights, many credit card companies allow cardholders to cash in travel rewards for free (or discounted) accommodation, free (or discounted) rental cars, and much more. Additionally, when using a credit card for travel-related purchases, credit card companies often offer higher reward incentives.
What Are the Benefits of Using a US Credit Card Internationally?
The benefits of using a US credit card internationally depend on the credit card issuer and the terms and conditions of your specific card. That said, US credit cards typically offer greater consumer protections and can provide access to lower transaction rates and better foreign exchange rates.
In fact, certain US credit cards offer the most lucrative terms and conditions when it comes to using cards internationally. This includes the ability to earn considerable travel rewards points that can then be used to offset the cost of travel.
Here’s a closer look at the specific benefits you can obtain when using a US credit card internationally.
Benefits of Using a US Credit Card Internationally
- Among the best consumer protection in the world
- Widely accepted in most countries
- Better exchange rates than using debit cards
- Certain cards offer no (or very low) foreign transaction fees
- Strong customer support to help with travel issues
- Ability to earn lucrative rewards to offset travel costs
Frequently Asked Questions
Below are three of the most common questions that we receive from people looking into using a credit card abroad. If you have further questions you would like answered, don’t hesitate to get in touch with us directly.
Do You Get Charged for Using Credit Cards Abroad?
Yes, in most cases you get charged for using credit cards abroad. Most credit card companies charge foreign transaction fees and apply foreign exchange rates to any purchases made outside of the card currency.
That said, the specific rates applied will vary between credit card issuers and cards. In certain instances, you can even find cards that do not charge foreign transaction fees and offer preferred rates when using credit cards abroad.
What Happens if I Use My Credit Card in a Foreign Country?
If you use your credit card in a foreign country, what happens next will depend on the specific credit card issuer. In most cases, you will have no problem using your card abroad. However, you will likely face foreign transaction fees and have foreign exchange rates applied.
Additionally, if you are not a frequent traveler you may want to inform your credit card company before traveling. Otherwise, they mistake your purchases for fraudulent transactions or a stolen card, which could result in your card being stolen.
Is It Better to Use Debit or Credit Cards Internationally?
In most cases, it is better to use credit cards than debit cards internationally because they offer greater consumer protection. In other words, if your credit card data is stolen while traveling you will have a higher likelihood of the credit card issuer protecting your interests. On the other hand, if you are to use a debit card, there’s a possibility that the funds in your account can be accessed directly.
Ready to Open Accounts With Banks in the USA?
If so, you can get access to GlobalBanks USA (our dedicated US banking service) in just a few clicks.
GlobalBanks USA is a 100% personal account opening solution. It provides direct access to our team of US banking experts.
When you join, you receive…
+ Expert suggestions on where to open US bank accounts.
+ Step-by-step support to navigate opening US bank accounts.
+ Direct introductions to helpful and responsive bankers.
+ Plus, detailed guides to maximizing the value you get from your new US bank account.
And “yes!” GlobalBanks USA helps foreigners and non-resident individuals open bank accounts.
In fact, GlobalBanks USA even helps non-resident US LLCs and foreign & offshore entities.
To learn more about GlobalBanks USA, visit the product page to see how our team can help you successfully open US bank accounts!
