Will your credit card work abroad?
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Credit cards are widely accepted in most parts of the world, which is great for those who want to maximize rewards on their trips abroad. Not only do many cards offer generous rewards on travel spending, but they also provide convenience and an added layer of protection in case your trip doesn’t go as planned.
Using a credit card is better than using cash in most cases. However, you might still encounter issues when attempting to use your credit card abroad. Luckily, there are workarounds to some of the most common obstacles you’ll encounter.
How to make sure your credit card works abroad
A handful of factors might prevent your credit card from functioning abroad. Most of them have simple workarounds and require just a bit of advanced planning:
Use a widely-accepted issuer
Visa and Mastercard are the most widely accepted credit card issuers worldwide. While American Express and Discover can come in handy, you’ll want to bring a backup Visa or MasterCard just in case.
Chip and PIN cards
In countries around the world, chip and PIN cards are the norm. These cards use a microchip and personal identification number (PIN) to validate transactions instead of a cardholder’s signature. Rather than swiping the magnetic stripe through the card reader, consumers insert the card into the machine and enter the PIN stored on the chip. If you have a card with a chip in your wallet, set a PIN so you don’t run into trouble using it abroad.
Notify your bank of your travel plans
Providing advance notice of your travel plans reduces the odds of your bank declining your transactions abroad. Knowing that you’ll be in Paris for a week, your bank is less likely to reject all those purchases at patisseries. They’ll know your credit card is likely not compromised. You’re just being a tourist and eating all the chocolate croissants you can muster.
Is it worth using a credit card abroad?
Using your credit card abroad provides security and convenience that cash does not. You’ll earn points on every purchase, which you can save up and redeem towards more travel experiences in the future. Your purchases will also be covered by purchase protection, giving you extra peace of mind. More importantly, you don’t have to carry large amounts of cash and worry about the security risk that might post.
While you should bring some cash with you in case your credit card isn’t accepted, a credit card provides more protection.
What’s the cost of using a credit card abroad?
There are two types of fees you’ll encounter when using a credit card abroad: Foreign transaction fees and merchant fees. Foreign transactions fees are around 3% and easily avoidable since many travel rewards cards waive them.
Merchant fees vary widely. I’ve been charged fees ranging from 3 percent to 8 percent. I gladly paid some of these fees for the added protection I received from my credit card. In many cases, merchants imposing credit card transaction fees are violating issuer agreements. Unfortunately, there isn’t much consumers can do about it. You can either pay the fee, use cash or shop somewhere else to get around it. The last thing you want is to get into a skirmish with a small business owner just trying to get by.
Best credit card to use abroad
What you pack in your wallet matters as much as what you put in your carry-on when you travel abroad. You want to bring one or more credit cards that are widely accepted, offer purchase and travel protection, generous rewards and travel perks. Here are a few credit cards that fit the bill:
American Express Platinum
The Platinum Card® from American Express‘s generous travel perks will make your time on the ground, at airports and even your return home much more pleasant. Like most travel cards, the Amex Platinum doesn’t charge foreign transaction fees. You can swipe to your heart’s content without additional costs. Thanks to Amex’s impressive insurance coverage, your purchases will also be protected.
Cardholders earn 5X points on prepaid hotels booked through Amex Travel, plus 5X on flights booked directly with airlines or with American Express Travel, on up to $500,000 per calendar year.
Platinum cardholders also get complimentary Hilton and Marriott Gold elite status, which offer perks like complimentary breakfast and room upgrades. Considering hotels abroad tend to be more generous with elite status perks, that mid-tier status might be more beneficial than you think.
The card includes access to the exclusive Centurion lounge network and Priority Pass membership, making your time at the airport en route to your destination much more pleasant. Cardholders also qualify for a Global Entry fee credit every four years, meaning your return home will be way more relaxed thanks to an expedited screening process.
The only potential downside to this card is that American Express isn’t as widely accepted as Visa and Mastercard. You shouldn’t have a problem using it at major hotel chains, but you might have issues at smaller vendors.
Capital One Venture Rewards
Thanks to generous rewards and a straightforward redemption process, the Capital One Venture Rewards Credit Card is fast becoming my go-to credit card recommendation. The card earns up to 10X on travel booked through Capital One and 2X on all other spending.
Travel vendors abroad may not code as such and trigger higher category bonuses. So having a card that earns a consistent 2X miles on all spending is reassuring. The card’s $95 annual fee makes it a terrific choice if you’re looking for a card that works well for domestic and international travel.
Chase Sapphire Reserve
The Chase Sapphire Reserve is a popular rewards card for international travel and it’s easy to see why. The card earns 3X points on travel purchases made worldwide. It also offers a $300 annual travel credit towards travel expenses to free up your budget. The card has no foreign transaction fees, Priority Pass lounge membership and a slew of travel protections that can come in handy if your trip is impacted by a covered reason.
Book your flights through the Ultimate Rewards portal and you’ll earn 5X points, while hotel and rental car bookings earn 10X points.
Bank of America Travel Rewards
The Bank of America® Travel Rewards Credit Card is great for international travel if you want a card with no annual fee. The card also doesn’t charge foreign transaction fees, which is rare for a no-annual-fee card.
Rewards are straightforward at 1.5 points for every dollar spent. If you’re a Bank of America Preferred Rewards member, you’ll earn a 25-75% bonus on top of this.
Using credit cards abroad is rewarding and more secure than utilizing cash. While you might encounter a few issues when using a credit card to pay for purchases, workarounds exist. Follow these tips and you won’t have to carry large sums of cash or worry about your transactions getting declined.