One of the advantages of debit and credit cards when you travel overseas is their ease of use. No more having to go to the bank and get travelers checks, something I found inconvenient to use and carry around. The local currency is so much easier – and debit cards give you an easy way to get just the amount you need. Before you travel overseas there are some things you should do.
First check with your debit and credit card providers to see what kind of fees will apply in foreign countries. These fees can take the form of a transaction and/or a currency conversion fee and can be either a flat fee or a percentage of the amount charged. If the fee is more than a couple of percent and you expect to make extensive use of your cards, you may want to shop around for one of the newer offerings that have no or low foreign transaction fees.
Debit cards are a convenient and inexpensive way to get the local currency. I have a debit card connected to my bank account, and the foreign transaction fee is only 1%. For the convenience afforded, 1% was fair to my way of thinking. Unless you are in a remote area, ATM machines are generally readily available, particularly in big cities. Therefore there is no need to get more than a few days’ cash needs at a time. Look for machines connected to banks. Many charge no transaction fee, whereas some of the independents charge fees that I would consider excessive. Stay away from getting cash at airport currency conversion kiosks and the hotel front desk, which also may have excessive charges for the conversion.
Credit cards are widely accepted in most places tourists go. One of my credit cards connected to a frequent flier program charged a 3% foreign transaction fee. The one mile I received for every dollar spent did little to offset that 3%. However, I have another card that charged 2.7% for foreign transactions but has a rewards component. For restaurant dining there is a 2% credit, so the net cost was only 0.7%. It pays to review the options on the different cards you have to find the most economical alternative.
Be aware that some countries in Europe are going to smart cards with an embedded chip technology called “chip and PIN,” rather than cards with magnetic strips that are still prevalent in the U.S. When making a credit card transaction, you enter your PIN rather than signing. Most merchants and restaurants can still process U.S. cards the old-fashioned way and have you sign. However, you may encounter problems at self-service kiosks such as in train and subway stations. If credit card readers are set up to only accept the new technology, your credit card will not work. If the card reader accepts both technologies, you will still have to enter your PIN. Most people do not know their PIN for their credit card, so before you travel to Europe, it would be good to contact your credit card provider to get your assigned PIN.
What tips do you have about making payments while traveling abroad?