Credit cards are wonderful additions to any vacation, particularly when traveling abroad. They offer excellent exchange rates and safer than carrying around wads of cash. Additionally, you don’t need to waste too much time dealing with travelers checks.
Some merchants may politely ask if you want to convert your transaction into U.S. dollars. Pleased at their thoughtfulness, you could immediately agree because it is easier to work with a familiar currency.
However, upon returning home you discover that you’re subjected to a 10-percent mark-up on your purchases. That extra $12 is probably caused by unforeseen fees.
1. Dynamic Currency Conversion
It is a way sellers use to make extra profit on international electronic purchases. They offer to convert your purchase into U.S. dollars then quietly charge about 5 percent of your purchasing amount. Naturally, they scoop the difference beyond the actual transfer rate.
To defeat it, you need to insist on using local currency with your purchases. If you don’t know about the latest exchange rate; open currency exchange site on your laptop or phone to know exactly how much you are paying before hitting the cash register.
2. Foreign Transaction Fee
It is a common transaction component that is assessed by credit card issuers when making purchases in other countries. A foreign transaction fee is often amount to around three percent of your purchases.
3. Card Coverage
It’s important to check which cards are accepted in your destination country. VISA and MasterCard are accepted nearly everywhere.
Although American Express is a global network, coverage may vary in each country. In more developed countries, American Express is usually on par with MasterCard and VISA. Discover Card has the least acceptance and is rarely recognized outside the U.S.
4. Using Your Passport as Identification
Travelers will notice that countries in Europe use smart chip technology in credit cards. The embedded microchips can be authenticated automatically after a PIN is entered. Because smart cards are safer than common magnetic stripes, most merchants may ask you to show the passport when you are buying with a standard card. Consequently, you’ll need to carry your passport when you want to shop. This can be difficult as some hotels may insist on keeping the passport during your stay, Talk to the supervisor about the best compromise. If you’re stuck, hit an ATM to get some cash before shopping.