Credit cards are widely accepted in most parts of the world, which is great for those who want to maximize rewards during trips abroad. Many cards not only offer generous rewards when it comes to travel spending, but also offer convenience and an extra 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 may still have trouble trying to use your credit card abroad. Fortunately, there are solutions to some of the most common obstacles you’ll encounter.
How to make sure your credit card works abroad
A number of factors can prevent your credit card from operating abroad. Most of them have a simple solution and just need a little advanced planning:
Use an issuer that is widely accepted
Visa and Mastercard are the most widely accepted credit card issuers worldwide. While American Express and Discover may be helpful, you’ll want to bring a backup Visa or MasterCard as a precaution.
Chip cards and PIN codes
In countries around the world, chip cards and PINs are the norm. These cards use microchips and personal identification numbers (PIN) to authenticate transactions instead of the cardholder’s signature. Instead of swiping the magnetic strip through the card reader, the consumer inserts the card into the machine and enters the PIN saved on the chip. If you have a card with a chip in your wallet, set a PIN so you don’t have trouble using the card abroad.
Notify your bank of your travel plans
Providing advance notice of your travel plans reduces the percentage of banks rejecting your transactions abroad. Knowing that you will be in Paris for a week, your bank is less likely to reject all those purchases at the bakeries. They will know your credit card may not be compromised. You’re just a tourist and eat all the chocolate croissants you can get.
Is it worth using a credit card abroad?
Using your credit card abroad offers the security and convenience that cash doesn’t get. You will earn points for each purchase, you can save and redeem points for more travel experiences in the future. Your purchases will also be protected when making a purchase, giving you more peace of mind. More importantly, you don’t have to carry large amounts of cash and worry about possible security risks.
While you should bring some cash in case your credit card isn’t accepted, credit cards will provide better protection.
How much does it cost to use a credit card abroad?
There are two types of fees you will incur when using a credit card abroad: foreign transaction fees and seller fees. Foreign transaction fees are around 3% and can be easily avoided as many travel rewards cards give them up.
Business fees are very different. I was charged charges ranging from 3 percent to 8 percent. I’m willing to pay some of these fees for the extra protection I get from my credit card. In many cases, merchants who impose credit card transaction fees are in violation of the issuer’s agreements. Unfortunately, consumers can’t do much about it. You can pay fees, use cash, or shop somewhere else to settle. The last thing you want is to engage in a skirmish with a small business owner who is just trying to get through.
The best credit cards to use abroad
What you pack in your wallet is just as important as what you bring with you when traveling abroad. You want to bring one or more widely accepted credit cards, offer purchase and travel protection, generous rewards, and travel perks. Here are some credit cards that fit the bill:
American Express Platinum
Platinum® cards from American Express’ generous travel perks will make your time on the ground, at the airport, and even your return home much more pleasant. Like most travel cards, Amex Platinum does not charge foreign transaction fees. You can swipe to the content of your heart at no extra cost. Thanks to Amex’s impressive coverage, your purchases will also be protected.
Cardholders earn 5X points when booking a prepaid hotel room via Amex Travel, plus 5 times on flights booked directly with airlines or with American Express Travel, up to $500,000 per year.
Platinum cardholders also get hilton and Marriott Gold elite status for free, offering perks such as free breakfast and room upgrades. Considering overseas hotels tend to be more generous with privileges afforded to the elite, that mid-level position may be more beneficial than you might think.
The card includes access to the exclusive Centurion lounge network and Priority Card membership, making your time at the airport on your way to your destination much more pleasant. Cardholders are also eligible for a quadrennial Global Entry Fee credit, which means that returning home to your home will be more comfortable thanks to the quick screening process.
The only potential downside of this card is that American Express is not as widely accepted as Visa and Mastercard. You won’t have a problem using it at large hotel chains, but you may have problems at smaller providers.
Venture capital rewards
Thanks to its generous rewards and simple redemption process, Capital One Venture Rewards Credit Card is fast becoming my popular credit card recommendation. Cards earning up to 10X for travel are booked through Capital One and 2X for all other expenses.
Overseas travel service providers may not write such code and trigger higher category rewards. So you can rest assured of owning a card that can earn 2X miles consistently for all expenses. The card’s $95 annual fee makes it a great option if you’re looking for a card that works well for domestic and international travel.
Chase Sapphire Reserve
Chase Sapphire Reserve is a popular rewards card for international travel and it’s easy to see why. The card earns 3 times more points when buying travel around the world. It also offers a $300 annual travel credit for travel expenses to free up your budget. The card has no foreign transaction fees, Priority Pass lounge membership, and a range of travel protections that can be helpful if your trip is affected by an covered reason.
Book your flight through the Final Rewards portal and you’ll earn 5X points, while hotel bookings and rental cars earn 10X points.
Bank of America Travel Rewards
Bank of America® Travel Rewards credit cards are great for international travel if you want an annual fee-free card. The card also does not charge a foreign transaction fee, which is rare for cards that do not charge an annual fee.
The reward is 1.5 points for every dollar spent. If you are a Bank of America Priority Rewards member, you will earn 25-75% of the bonus.
The bottom line
Using credit cards abroad will be more rewarding and secure than using cash. While you may have some problems using a credit card to pay for purchases, there are still alternatives. Follow these tips and you won’t have to carry a large amount of cash or worry about your transaction being rejected.