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.
See our Travel Toolkit for tips and insights to boost your savings and maximize your travel.
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 solutions 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 — or 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 isn’t compromised — you’re just being a tourist, eating all the chocolate croissants you can muster.
Is it worthwhile to use a credit card abroad?
Yes — 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 toward future travel experiences. The items you buy may also be covered by purchase protection, giving you extra peace of mind. More importantly, you won’t have to carry large amounts of cash and worry about the security risk it poses.
While you should bring some cash for those smaller, irresistible purchases, a credit card provides stronger protection.
What’s the cost of using a credit card abroad?
You’ll encounter two types of fees when using a credit card abroad: foreign transaction fees and merchant fees. Foreign transaction fees are around 3 percent and can be avoided since many travel rewards cards waive them.
Another fee you can avoid is a so-called dynamic currency conversion fee. It’s a sneaky fee for travelers who agree for a transaction to be converted to U.S. dollars when you make a purchase in foreign currency. If you’re asked whether you’d like to pay in U.S. dollars with your card, say no. Instead, look up exchange rates and do the conversion on your own. Or check your card’s e-statement or app after the sale to see the conversion fee.
Merchant fees can include surcharges or convenience fees for using your card. These fees help to offset the merchant’s processing costs and can vary from 3 percent to 8 percent. These fees help offset the costs of the added protection you receive from a credit card.
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.
The bottom line
What you pack in your wallet matters as much as what you put in your carry-on when you travel abroad. You’ll want to bring one or more of the top travel credit cards that are widely accepted and offer purchase and travel protection, generous rewards and travel perks. You might encounter a few issues when using a credit card to pay for purchases, but there are workarounds. By following safe use practices, you won’t have to carry large sums of cash or worry about your transactions getting declined.
FAQs
Use a widely accepted issuer
Can I use my credit card internationally? ›
Visa and Mastercard are the most widely accepted throughout the world. If a business accepts credit cards, your Visa or Mastercard will likely work fine. The other two — American Express and Discover — do have a global footprint, but they are accepted at fewer merchants.
Is my credit card OK to use abroad? ›
Your card will usually work but there are chances that transactions may be blocked, particularly for large amounts. It is always prudent to let your card company know you will be abroad and when to ensure your charges will not be blocked.
Do I need to tell my credit card company I am going abroad? ›
Your credit card company or bank may not need to be notified before you take a trip. That's because of improvements in fraud detection technology and security. If you choose to set a travel alert, you can usually do it over the phone, online or in your bank's or credit card issuer's mobile app.
Is it better to use card or cash abroad? ›
Use a debit card
Most providers will charge you for every transaction you make overseas, but you can find credit or debit cards that will cut the cost of your spending abroad.
Do I need to activate my credit card for overseas use? ›
If you have not activated the overseas usage feature, Magnetic Stripe Transactions on your Card cannot be processed. However, please note that EMV Chip Transactions on your Card will still be processed and you will be liable for these transactions.
Can I withdraw money from credit card internationally? ›
Foreign Transaction Charge - A Foreign Transaction charge is applicable for almost all the banks like SBI, PNB, HDFC, etc. This is nothing but the fee for cash withdrawal. It forms 2.5% to 3.5% of the transacted amount. This fee is applicable irrespective of currency, cash withdrawal or transaction amount.
Is it better to get foreign currency or use credit card? ›
Fees aside, using your credit or debit card is probably your safest bet for getting an exchange rate that's closest to the market rate. But be aware that while your card's issuer bases its exchange rate on market conditions, it does set its own exchange rate for transactions.
Is it better to use a debit or credit card internationally? ›
If you want to keep a tab on the spending, a debit card can be a good option. Credit cards, on the other hand, are handy if you face a shortage of funds while travelling abroad.
Is it better to use credit card or travel money card overseas? ›
Travel cards offer several advantages that a credit card can't compete with, including the ability to load multiple foreign currencies, secure PIN protection, locked-in exchange rates, no foreign transaction fees, online account management, and the option for emergency assistance.
When you use a credit card in a foreign country, the issuer automatically converts the local currency to dollars based on up-to-date exchange rates. For this conversion service, the issuer may charge a nominal fee, a percentage typically between 1-3% of the total purchase.
Should I get a credit card to travel abroad? ›
Credit cards typically provide better exchange rates than what you'll get from ATM machines and currency stands. Depending on your card issuer, your purchases might automatically qualify for insurance. This coverage doesn't simply apply to consumer goods — it also covers travel delays and lost luggage.
Why is my credit card being declined abroad? ›
Large purchases, charges from sellers in foreign countries, or activity that seems unusual may trigger the bank or credit union to lock down your account to avoid fraud. Before traveling, contact your bank or credit union to let them know you'll be out of town.
What is the best way to pay when abroad? ›
Here are some of the most efficient, cheapest and safest ways to spend your money abroad.
- Travel debit cards. You can use your debit card, but this can be an expensive mistake as you may pay unnecessary fees when you spend or withdraw cash from an ATM. ...
- Travel credit cards. ...
- Prepaid travel cards. ...
- Cash.
One may wonder how safe it is to carry a Credit Card and forex card for shopping while abroad, or to buy online from international websites. Well, if you are careful enough to observe a few precautions, this mode of payment is quite secure, time-saving, and hassle-free.
Will I get charged for using my credit card abroad? ›
Depending on the credit card you have, and the lender, you may be charged a fee for using your card overseas. If you're given the choice to pay in the local currency, it's typically cheaper to do so.
Can I use my credit card for international transactions? ›
Credit cards are powerful financial tools that offer convenience and flexibility for various transactions. While they are commonly used for domestic purchases, many people wonder whether they can use their credit cards for international transactions. The answer is a resounding yes.
Is there a fee for using a credit card in a foreign country? ›
Foreign transaction fees generally range from 1 percent to 3 percent and tend to average around 3 percent of each transaction. Paying around $3 per $100 you spend may not sound that expensive, but these fees can add up if you're making a lot of purchases with your credit card.
Do I need to let credit card know I m traveling internationally? ›
You're not required to notify your credit card company when you're going away on vacation, but it is highly recommended. By letting your credit card company know where you're going and for how long, your company will know that any card transactions from that location were likely authorized by you.
Is it good to use credit card for international travel? ›
You don't have to carry as much money or change currencies as often. This is ideal for larger purchases like flights and hotels. Unlike cash, credit cards provide fraud protection. For starters, most international merchants require EMV chip cards, which are automatically more secure than their magstripe counterparts.
