Top 5 Tips for Using a Credit Card Abroad

By: Credit_Choices

Using a credit card abroad can be an expensive business. If you are planning to make use of your credit card abroad, there are some simple steps you can take to ensure you get the best deals and pay as few fees and charges as possible.

1) Compare credit cards

Different credit cards offer vastly different transaction costs from one another, so the first rule of using a credit card abroad is to compare credit cards and choose the one most suited to your spending needs before you go. This is a good idea even if you don’t plan on using your credit card and just want to have it there as back-up for an emergency.

2) Check the terms of your credit card before you travel

If you don’t have the time or the opportunity to do some proper research and take out the best credit card before you go abroad, it’s very important to at least check all the terms and conditions of your card before you travel.

For example, you should know whether your credit card will charge you a percentage of your withdrawals up to a capped fee of, say, £5 (meaning you could potentially save by withdrawing more money all at one time) or whether the amount is uncapped.

3) Tell your bank when you’re going away

Using your credit card abroad can appear as unusual (suspicious) activity to your bank, who may assume the card has been stolen or cloned and cancel it without your knowledge.

This is why it is highly advisable to tell your bank if you are going abroad and planning to make use of your credit card. You are not obliged to do this but it is a good idea or you could find yourself unable to use the card. According to a spokesperson for HSBC; ‘If we notice a large number of 'suspect' transactions, we will try to contact the customer and may stop the card.’

4) Beware of credit card cash withdrawals

Be careful about making any transaction on your credit card abroad, as various unexpected fees and charges may be incurred, according the supplier’s own particular terms. Withdrawing money from a cash dispenser is one of the worst offenders for this. You might be charged for any or all of the following:

• The bank’s exchange rate

• A foreign exchange fee

• An ATM fee - this alone could be between £2 and £3 per withdrawal, or 2% of the total transaction

• A higher rate of interest - which will usually start accruing straight away when you withdraw cash in this method

5) Do consider using a credit card for purchases over £100

While there are lots of potential pitfalls you need to be aware of when using a credit card abroad, there is one bonus – transaction over £100. Section 75 of the Consumer Credit Act 1974 allows consumers to claim compensation from the credit card company if the supplier is in breach of contract for transactions of over £100 (and under £30,000) made using a credit card abroad.

This means if the product purchased is faulty or not as described, you will be able to recover the cost from the credit card supplier or the retailer, and it’s often a lot easier to do so from the card supplier. They will find it hard to argue against your case, because they won’t usually have a relationship with the retailer (such as a hotel).

Credit Choices lets you compare credit cards and offers free advice and information on how best to use your credit card abroad.

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