A credit card is often the most convenient way to pay while travelling, but a few hidden costs and risks are worth knowing.
Before You Travel
- Check whether your card charges a foreign transaction fee.
- Make sure your card network is widely accepted at your destination.
- Save the issuer international helpline number.
- Turn on alerts in the app.
Dynamic Currency Conversion
When a terminal asks whether to pay in your home currency or local currency, choosing local currency usually avoids a poor exchange rate.
Safety Abroad
- Carry a backup card separately.
- Use tap-to-pay where possible.
- Avoid cash advances from ATMs with a credit card.
Travel Card Checklist
| Before you leave | Why |
|---|---|
| Check foreign transaction fees | Avoid paying around 3% extra on every purchase |
| Confirm the card network works at your destination | Some networks are less accepted in certain countries |
| Save the international customer service number | Calling from abroad may need a different number |
| Turn on alerts and know how to lock the card | Quick response to fraud |
| Carry two cards from different networks | Backup if one is declined |
| Note your credit limit | Hotel and car rental holds can reduce available credit |
Hotel and Car Rental Holds
Hotels and rental companies often place a temporary hold (authorisation) on your card for more than the final bill. This hold reduces your available credit until it’s released, which can take several days after checkout. Using a credit card rather than a debit card keeps your bank balance free for daily spending.
ATM Use Abroad
Using a credit card at an ATM usually triggers cash advance fees and high interest. A better plan is to use a debit card with low international ATM fees, withdraw larger amounts less often, and decline the ATM’s offer to convert the withdrawal to your home currency.
If Your Card Is Lost or Stolen Abroad
- Lock the card in the app immediately.
- Call the issuer’s international number.
- Use your backup card.
- Ask about emergency card replacement or emergency cash services.
Keep a copy of your card details (not the full number) and contact numbers somewhere separate from your wallet.
Illustrative Example: How Small Fees Add Up on a Trip
Many cards charge a foreign transaction fee, often a small percentage of each purchase made in another currency or processed by a foreign bank. Others charge no such fee. The numbers below are illustrative only, to show why it is worth checking before you go.
Suppose a traveler spends the equivalent of $2,000 on a week-long trip.
| Card Setup | Foreign Transaction Fee (Illustrative) | Extra Cost on $2,000 |
|---|---|---|
| Card with no foreign transaction fee | 0% | $0 |
| Card with a 3% fee | 3% | $60 |
| 3% fee card plus accepting a merchant conversion at a poor rate | 3% plus a markup | More than $60 |
The difference may seem small for one purchase, but across hotels, meals and transport it adds up. Choosing the right card and always paying in the local currency helps keep costs predictable.
Which Payment Method to Use Where
Different situations abroad call for different tools. As a general guide:
- Hotels and car rentals: A credit card is usually best, since holds do not tie up cash in your checking account.
- Restaurants and shops: A credit card with no foreign transaction fee, paying in local currency.
- Small markets, taxis and tips: Some local cash is useful, as smaller vendors may not accept cards.
- Public transport: Many cities accept contactless payment; check in advance.
- Large purchases: Credit cards often offer stronger dispute rights if something goes wrong.
Build a Travel Payment Kit
Before leaving, pack your payment tools the smart way:
- Bring two cards from different networks, in case one is not accepted.
- Keep the backup card in a separate place from your main card.
- Save your issuer’s international customer service number, which is printed on the back of your card, somewhere other than your wallet.
- Carry a small amount of local currency for arrival.
- Turn on transaction alerts in your card app so you see every charge in real time.
- Note your credit limit and planned budget so large holds do not surprise you.
A Simple Daily Money Routine While Traveling
Spend two minutes each evening reviewing the day’s charges in your app. Check that each amount was charged in the local currency, look for any unfamiliar transactions, and compare your total against your daily travel budget. If you spot an issue, contact your issuer promptly through official channels. This small habit catches errors early and keeps spending under control, so you return home without an unwelcome statement.
Frequently Asked Questions
Do I need to tell my bank I am travelling?
Many issuers no longer require it, but check your app for a travel notice option.
Is it better to use cash abroad?
A mix works best: a no-FX-fee card for most purchases and a little local cash.
Conclusion
Prepare before you go and always pay in local currency to get the most from your card abroad.
