If you're planning a trip to a foreign country, you may be surprised that credit card companies do not always follow the same rules when using the cards at home. This means that when you get back from your trip, you can have more than just a souvenir. You may also have unforeseen fees that can cost long after the trip is over. Before you head out for your next foreign adventure, check out these tips to avoid surprises when using your credit card for the trip.
Foreign transaction fees
Credit card companies can pay what they term a "foreign transaction fee" where they charge an extra amount on top of the loads when you visit a foreign country. This amount is not a conversion fee because even if your purchase is debited in dollars, pounds, euros or whatever money is the domestic currency still behaves the charge, which tends to be around 3 percent. For example, if you load a stay in a hotel that was originally $ 1,000, you may find that your bill has an extra $ 30 tacked on it.
To avoid this surprise credit card, call your credit card company prior to your trip, and determine whether a foreign transaction fee is in effect for the particular credit card. Credit card companies such as Discover and Capital One have done away with this tax. Other cards aimed specifically at frequent travelers, such as Chase cards, also did not pay the fee. You can always ask your credit card company to waive the fee, is the worst that you can say no.
Dynamic Currency Conversion
Dynamic currency conversion is a process by which a foreign dealer will charge in currency of the country to buy.
For example, if you are using pounds, but traveling in Germany, dealer can tell you how, in Sterling, a cost element instead of euro. This benefit can be useful because it helps to understand the conversion rates of the day at the point of sale instead of when you receive your credit card bill, but how easily can cost you extra.As foreign transaction fees, retailers and credit card companies may tack on an additional 3 percent to your load for the currency conversion. The retailer gets a bonus for using the system and the credit card company also makes some extra money. Companies like MasterCard and Visa offer dynamic currency conversion while American Express typically does not. While retailers must always be up front with you regarding this cost, some may not follow through this responsibility. It is not necessary to use this option unless you want to.
If you don't want to pay for dynamic currency conversion, you might want to check with your credit card company every day on foreign exchange rates and simply calculate the change before making the post. This allows you to keep up with your money without spending extra for a service that does the calculations for you.
Chip and PIN systems
Also known as EMV smart chip, chip and PIN credit card systems are an option credit card companies launched in Europe around 2004 to reduce the growing problems of credit card fraud. Every credit card is embedded with a chip that is assigned a personal identification number or PIN are pre-selected. When you make a purchase, the merchant will ask you to enter a five-digit PIN number instead of asking for your signature on a receipt. If a credit card thief steals the card, he may not use it without your PIN number.
The chip and PIN system is not widely used in America, which means travelers can encounter problems to go to Europe or Canada where magnetic stripe cards are commonly used. While most traders have the ability to perform magnetic stripe cards, passes some automated services, such as public transport or petrol pumps cannot. Credit card companies American can issue credit cards, chip and PIN, but you will probably have to ask them to do so and you may have to pay a fee because the cards are more expensive to manufacture than traditional credit cards. While chip and PIN card is probably the best card for travel abroad, those with magnetic stripe cards should carry enough currency to cover expenses and use the in-person card with merchants.
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