Is using a credit card internationally a good idea?

The best way to avoid foreign transaction fees is to us a debit or credit card that waives such fees while traveling abroad. About 25% of the available credit card offers on the market don’t charge foreign transaction fees, and those cards are available to people of all credit levels, so there’s really no reason to pay the extra charge when you travel abroad.… read full answer

1. Get a credit card with no foreign transaction fee.

Foreign transaction fees are charged by credit card companies, not merchants, and the surcharge could add as much as 4% to purchases made outside the U.S. These fees also apply to online purchases processed abroad, even if you’re sitting in front of your computer at home when you complete the transaction. If a card charges a foreign transaction fee, it will be listed in the card’s terms and conditions.

The 10 largest credit card companies all offer at least some cards without foreign transaction fees, and some issuers don’t charge these fees on any of their credit cards. Using credit cards with no foreign fees rather than cash also is a convenient, inexpensive way to avoid having to convert physical currency while traveling abroad.

2. Understand that foreign fees can be an issue even when you’re not traveling.

You don’t have to be in another country to get hit with a foreign transaction fee. If you do business online or by phone through a merchant based outside of the U.S., make sure you pay for your purchase with a no foreign fee credit card to sidestep the surcharge. If you use a card with a foreign fee, you’ll be charged this fee on top of your transaction, the same as you would if you had made the purchase at a physical location abroad.

3. Have a no foreign fee debit card handy.

You probably won’t be able to use credit cards for all your international purchases if you travel abroad, so having a debit card will allow you to get cash in the local currency when you need it. Many debit cards also charge foreign transaction fees, so make sure to bring a Visa or Mastercard debit card with no foreign fee when you head out of the country.

4. Avoid converting currency at airport kiosks.

Converting your cash at an airport kiosk outside of the U.S. may be convenient, but that convenience will cost you. Currency conversions at airport-based exchange stations come with extraordinarily high fees and less-than-favorable exchange rates.

Instead, use a no foreign transaction fee credit card for most of your purchases, and a no foreign fee debit card to withdraw physical currency. These options are very convenient, and each allows you to take advantage of low Visa and Mastercard currency conversion rates automatically.

5. Do not accept offers for dynamic currency conversion.

Dynamic currency conversion (DCC) is a practice in which foreign merchants may offer to charge your purchase in U.S. dollars instead of the local currency. You should never accept these offers because if the merchant converts your payment for you, they may set their own high exchange rate to increase their profits.

With that, you know the basics of how to avoid unnecessary costs when spending money internationally. If you already have a credit card that charges foreign transaction fees, there’s not much you can do to avoid them, save for not using the card abroad. Consider applying for a travel credit card with good ongoing rewards and no foreign transaction fees to use instead. There are plenty to choose from.

Visa, Mastercard, American Express, and Discover credit cards can be used internationally, though Visa and Mastercard credit cards are more widely accepted abroad. Credit cards without foreign transaction fees are also crucial when traveling internationally. You’ll save an average of 1.44% on each purchase, compared to a card with a foreign transaction fee. As a result, Visa and Mastercard credit cards with no foreign fees are the best credit cards to use internationally.… read full answer

Best Credit Cards for International Travel

• Capital One Venture Rewards Credit Card
• Chase Sapphire Preferred® Card
• Citi Premier® Card
• Capital One Quicksilver Cash Rewards Credit Card
• Bank of America® Travel Rewards credit card

When purchasing from international merchants, remember to also watch out for dynamic currency conversion. By avoiding foreign transaction fees and dynamic currency conversion, you could save up to 10% when using a credit card abroad.

Finally, be aware that chip-and-PIN cards will be slightly more useful when traveling abroad than chip-and-signature cards. Unmanned kiosks, for example, may require a PIN from a chip-and-PIN card. That said, you’ll get around fine if you have any low-fee card on the Visa or Mastercard network and some of the local currency as backup.

To decide whether you should get a credit card or debit card for international travel, it's important to consider aspects like fraud protection and costs associated with purchases and cash withdrawals.

All major-issuer credit cards and debit cards come with $0 liability guarantees, meaning you won’t be held liable for any unauthorized charges. However, credit cards do … read full answermake fraud easier to deal with.

Having said that, our suggestion is to use international credit cards for purchases and international debit cards for cash withdrawals while traveling abroad. The answer to this question is, therefore, both.