Have you ever experienced enjoying a wonderful trip abroad only to be surprised by the credit card billing statement after coming home? Or are you the type who choose to ignore the details of the billing statement?
Be prepared for your upcoming trip and consider the following precautions on using credit card overseas.
1. Let your credit card company know your travel plan.
Inform your credit card issuer beforehand if you plan to travel overseas so they would not flag and block a transaction when they see it transacted from an unusual location. You may also take the opportunity to discuss and understand the bank's transaction charges on payments made overseas.
2. Bring an internationally-accepted credit card (ie. Mastercard, Visa, American Express).
You wouldn't want to resort to withdrawing from local ATMs as these charge a substantial amount from your cash pool.
3. Know your card's foreign transaction fees.
Foreign transaction fees (also called foreign exchange fees) are charged by credit card companies from transactions made in a foreign currency. Credit card issuers may choose to add other charges such as service fee or processing fee.
In the Philippines generally, charges shall be converted to Peso based on the prevailing currency conversion rate of Mastercard/Visa/American Express at the time transaction is posted. Major issuing cards such as BPI, BDO, and Metrobank charge service fee of 0.75%, 1%, and 2.50%.
The rule of thumb is paying outside your home country is almost always not the same as paying in your backyard. Banks add fees when you buy something with your card overseas. So ask and check with your bank to avoid credit shock.
4. Use only one credit card intentionally.
This is for you to monitor effectively your expenses. Furthermore, take note that each card has a different charge for every foreign transaction. However, if available, bring a backup credit card that you can use just in case something happen to your primary credit card and becomes unusable momentarily.
5. Double check your credit card limit and card expiration date.
Monitor your expenses and keep them within your credit card limit.
6. Keep your receipts.
This will make it easy to support your claim when unusual charges come up on your billing statement for that particular transaction.
7. Bring cash.
Carry cash. Note that there are some establishments that still do not have credit card facilities. There may also be instances that although the establishment has such facility, it may not be working at the moment. In any case, it is safe to always have cash in hand when you cannot pay the bill through card.
8. Be informed of the currency rates.
Be updated with the currency exchanges. There are already several free apps that calculate the amount of your money to your desired currency.
Do you plan to exchange money at the country you plan to visit or at the airport instead? Or do you plan to exchange money at the bank? It pays to know which platform issues better rates.
There may be several things to consider when bringing credit card abroad, but it is still safest to take credit cards. It provides security financially and legally as it also offers fraud protection. Some banks even verify first with customers the validity of the purchase particularly if the amount is substantial. It is also important to note that the exchange rates offered by cards are usually better than those offered at exchange counters as rates offered to these retail counters are less favorable compared to the wholesale rates offered to large banks.
In any case, so long as you take the above precautionary steps, you will have worry-free vacation during and after the trip.