With a credit card foreign transaction fees are an important consideration. When you prepare for a trip to another country you probably think about what you are going to pack, where you are going to go, how much it will cost, how you will manage language barriers and so on. But have you thought about your credit card and what it can, or can’t, do for you in that country? You should because with a foreign transaction fee how much your vacation costs can change. Here are 3 things to consider when traveling abroad:
Credit cards can be a convenient way to handle your finances as you travel. They allow you to buy now and pay later, give you the security of not having to carry cash because they are much easier to replace if lost or stolen, and they let you spend money without having to trade in your cash for the country’s money or worry about exchange rates – the credit card company handles that for you.
But you do need to be aware of foreign transaction fees in credit cards. These foreign transaction fees on credit cards are fees that credit card companies use to make a few extra bucks off travelers like you, especially less experienced travelers.
The foreign transaction fee, or FTF, is either a set amount or a percentage of the transaction that is added to the transaction every time you make a purchase in another country. Usually the fee is not very high (just 1-3%), but on a long trip it could add up fast. Choosing a credit card without foreign transaction fees is important. The good news is that these fees are becoming less common and it is pretty easy to find a card that does not have these fees. For example, Capital One cards do not usually charge a FTF. Be sure to check with your credit card company so you know about such fees before you travel.
Credit cards offer a variety of benefits that are travel related. These benefits vary from card to card, but one popular features is car insurance. When you rent a car in any of the United States many credit cards will give you automatic insurance on that rental if you pay using their card. However, most credit cards do NOT extend this coverage to cards rented outside of the country.
Many credit cards offer travel insurance when you make your travel plans using their card. Check with your specific bank as these benefits vary wildly. But they can include things such as repaying you for unused plane tickets if you fall ill and can’t take the trip or medical care or emergency evacuation abroad.
With a credit card foreign transaction fee isn’t the only concern. In most countries you can use your credit card to get cash out of an ATM machine. This can come in really handy if you have unforeseen expenses or not everywhere you go takes credit cards. But you will need to have a personal identification number (PIN) for your credit card to do this.
Make sure that your card is set up with a PIN before you leave the country. In fact, get a little cash out at a bank near home before you leave just to make certain that your card works fine to get emergency cash. But do beware that most credit cards charge cash advance fees, so this is just something to do when you really have to.
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