Returning from a vacation can sometimes be a fairly glum experience, especially if you?ve been somewhere incredible. The thought of getting back into the daily grind can seem pretty unpalatable in comparison to the sights and sounds of the foreign shores you?ve recently sampled.
With this in mind, the last thing you need to find waiting for you on your return is a gargantuan credit card bill full of mysterious charges. To avoid such a kick in the teeth, it?s vital to understand the potential pitfalls of using your credit cards whilst abroad and how they can be worked around. Taking these steps before you set off can help you dodge the nasty surprise of extra unexpected costs.
Find a Card That?s Fit for Purpose
If you?re heading off on a nice relaxing beach break you?re more likely to pack a pair of sandals than your hard-soled work shoes. Why? Because they?re designed for the exact scenario you?re going to be in, whilst your work shoes are for, well, work. When it comes to frolicking around in the surf, they just aren?t fit for purpose.
By the same token, it can pay to get yourself kitted out with a credit card made expressly for overseas use. Whilst your regular card will probably load on a transaction fee of around 3% to any purchases you make abroad (you may need to ask your cards supplier just what charge you?re subject to, as they are often omitted from balances) there are plenty of cards out there that don?t charge you for spending abroad, and some even have a 0% interest for an introductory period.
It could be prudent to get your hands on such a piece of plastic if you?re visiting a destination renowned for the shopping on offer and think you may be tempted to get carried away.
Show No Interest in ATMs
Normally, no matter how many purchases you make on a card, if you?re able to clear the balance by the end of the month, leaving nothing outstanding, you won?t have to worry about interest mounting up. Indeed, this is how most savvy consumers aim to use their cards.
However, if you use your credit card to withdraw cash from an ATM you won?t be able to avoid interest payments simply by clearing your balance. As soon as the notes are out of the machine, payable interest starts accruing. On top of this, it?s often at a far higher rate than for regular purchases.
Ideally, you should take enough foreign currency with you so that you shouldn?t need to resort to making a withdrawal. If you do have to, debit cards will more likely be a better option.
Dodge Dynamic Currency Conversion Rates
The Dynamic Currency Conversion Rate system allows retailers to charge their own exchange rate for tourists who use their card to pay for a purchase using the currency of their home nation. It probably won?t surprise you to know that the retailers in question aren?t shy about charging ridiculous rates and giving their profits a nice shot in the arm in the process.
You should always be given the option to choose whether you pay in the currency of the country you?re visiting or your own, and you should be sure to choose the former.
Again, it?s in the retailer?s interest not to mention this, so be sure you?re alert to what currency the transaction is taking place in when paying for items on card. If they refuse they are breaking the terms of Visa and Master card (who are the ones supplying the system). Offer cash and be sure to report the trader.
Stuart Holborn writes on a wide range of topics relating to consumer credit for Borrowers Recommend, where you can read more of his tips.
Source: http://www.howimportantisyourfinance.com/2012/07/27/top-tips-for-using-your-credit-card-abroad/
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