5 things to note for overseas credit card spending
When you travel, carrying a wallet bulging with cash can be cumbersome. Slotting in a few credit cards would be simpler, wouldn't it?
But before you take off, let GoBear remind you that with great plastic, comes greater responsibilities.
1. Credit Card Hotline
We talked about free travel insurance plans offered by credit cards that could cover your medical costs and car rental loss or damage.
But who do you call when things go awry? Make sure you know the hotline number – a tiny detail we often forget that is right there at the back of your card.
You looked, didn't you? Well, at least you don't have to memorise that important number. But it's still safer to have it on speed dial.
2. Card or Cash?
Never travel without checking if the card would be accepted in the country you're visiting. This is not something you throw against the wall and see if it sticks.
Seriously, you don't want to travel all the way to places such as Cuba, only to realise that cash is king. By then, it's too late and you might find yourself in a pick.
Always check the acceptance level and country network of your card before you travel.
3. Foreign Transaction Fees
Final credit card bill and receipts don't tally? Don't get too shocked, that’s because the banks charge a foreign transaction fee for purchases made overseas. This comprises the bank’s administrative fee and a currency conversion charge imposed by the card association, which adds up to an extra 3% in total.
Swipe your credit card only when necessary, avoid doing it multiple times for small purchases.
4. To Convert or Not?
When making your purchases overseas, beware of dynamic currency conversion. When a merchant asks if you would like to pay in the local or your home currency, choose the local currency. Conversion rates are likely to be less favourable when converting to your home currency.
That’s not all – you’ll still need to pay an additional card administrative fee for the service.
If you have to use your credit card, always pay the local currency to lessen the conversion charges.
5. Cash Advance
You would want to avoid treating a credit card like your ATM card because withdrawing cash this way is a cash advance that would require you to pay:
- Cash advance fee ($15 or 6% of the transacted amount)
- Cash advance interest calculated daily until full repayment
Your best bet is to bring just the right amount of cash and save the cash advance for emergencies.
Also, don't forget to bring along the right credit cards for overseas spending too! If you need some help with choosing the right credit cards, look below.