Tips for using your credit card abroad

As winter sets in the thought of getting away from it all to a hot sunny climate may be at the forefront of your mind. Many people choose to spend Christmas abroad and often it is funded with their credit cards. If you are travelling abroad this Christmas and you do plan on using your credit card whilst you are there, you will need to take into consideration a number of factors.

Almost all credit card companies charge extra fees for using your credit card abroad. So firstly you need to know exactly what the charges will be for using your card in another country. The fees that you need to look into are known as “foreign transaction fees” and all credit card companies charge them. They are basically fees which are charged for everything that you purchase on your card whilst you are abroad. The fees will vary from company to company and so it may be worth looking to see if you can switch to a better deal if your current card has a high fee charge.

Another mistake many people make with their credit cards abroad is making a lot of cash withdrawals. Whilst it is convenient to simply draw money out of your credit card to spend locally, it can be extremely expensive. So if you have to make cash withdrawals then make sure you limit the number that you do.

One thing that you might not know which will catch you out is that some hotels and retailers abroad will charge you fees in your home currency. So you could lose out on money if you are in America for example and you are charged United Kingdom Pounds. This is known as Dynamic Currency Conversion and it can be extremely damaging to your finances as the cost can be up to an extra 4% of your transaction fee.

Overall using your credit card abroad is definitely more expensive than using cash. However it is more convenient and as long as you know what to look out for, you should be able to use your card with the least amount of fees possible.