Summer is the peak season for travel with the kids out of school and families taking day trips to the country or once-in-a-lifetime vacations abroad to places like the United Kingdom, France, Turkey and Italy. The logistics of planning a trip out of the country requires detailed itineraries and bookkeeping to insure all the needs are met for an enjoyable, trouble-free time. Whether you’re planning for a globetrotting adventure or a budget conscious family trip, getting the most for your money is an important goal for travelers abroad no matter their level of experience or income. Here are some important things to know about when using credit cards abroad that will help protect and save money.
Knowing the best time to travel to your selected destination and finding the best deals on lodging are obvious ways to cut the cost of travel. Others include scoping out the area in advance to plan an itinerary of sites to see and places to eat. A less conventional way of saving on international travel is to know what payment types to use. You will need to know how to make exchange rates work to your advantage or simplify the process by using a credit card.
Reasons to Use a Credit Card when You Travel
The most obvious reason to use a credit card anywhere you travel in the world is for the convenience. No need to worry about where you’ve stashed the cash or if you have enough. As with any credit card charge, if you allow the balance to incur interest charges, the conveniences you enjoy will come at a price. Pay the balance in full after the trip and the protections that come with using credit cards will be well worth it. Some benefits and protections are:
Zero-liability Policy: Say you paid for an exclusive hotel suite in advance as part of your travel arrangements but end up in a cheap rundown, motel room. If you paid with a credit card, you can withhold payment by contacting your credit card company. They will then notify the hotel of your dispute and explain that payment will not be made until the problem is resolved. In this case, reimbursement would be appropriate. It the dispute is never resolved, you are covered under the Fair Credit Billing Act and you’re responsible for only $50 of the charge.
Currency Conversion is Easier: Eliminating the issue of converting dollars into foreign currencies is a big reason many people opt to use credit cards exclusively when they travel abroad. To be the most beneficial, you’ll need to investigate whether the merchants and businesses of the country you’re visiting generally accept credit cards. Don’t go unprepared; bring a small amount of cash to be used only in case of emergencies where credit cards are not accepted.
Lost Luggage Reimbursement: While airlines are not the most consumer-friendly when it comes to the issue of lost luggage, many credit card companies offer helpful protections. Depending on the card you use, some will track the process of locating your luggage, while others will provide you with immediate reimbursement funds to purchase necessities while you wait for word on the lost luggage. A great protection when you find yourself far from home with nothing but the clothes on your back.
Protection against theft: The danger in paying for a trip with cash is that you’ll be vulnerable to theft without any recourse to recover your loss. Using credit cards while traveling provides a higher level of protection over cash and is one of the #1 reasons for using a credit card.
To maximize the benefits offered by credit card companies, you’ll want to use the right type of card. It’s easy to compare the best credit cards to help you choose the one that best fits your travel plans. Some have been designed to maximize rewards for specific airlines, hotels and retail outlets, while with others can help you earn flight upgrades and special services across the market. Here are things to look for when choosing a credit card for a trip abroad.
Foreign Transaction Fees – It wasn’t too long ago that nearly all credit cards charged foreign transaction fees for the privilege of buying on credit abroad and to cover the cost of converting to another currency. Many travelers were caught unaware when they saw a 2-3% fee added on their credit card statement for every purchase they made. Consumers loudly complained; and in recent years, more credit card companies have cut back or totally eliminated these fees. One of the biggest ways to save when using a credit card is by choosing one that doesn’t charge foreign transaction fees.
Travel Rewards – While a general cash back card will generally reap 1% on the dollar, an airline credit card specifically designed for travelers will offer a bunch of extras. Purchase airfare with an airline-branded card and see substantially savings, upgrades, special offers and perks. If you’re already accumulating points or miles with this type of card, maybe it is time to redeem them for free airfare or other travel perks on your trip abroad.
Gasoline Cards – If you’ll be traversing the country in a car, a gas card will help keep the cost of fuel down by giving you a discount right at the pump. This is the type of card that makes sense to use in conjunction with a travel rewards card. While using two cards may seem counterintuitive, the savings can be substantial when the balance is paid in full at the end of the trip.
Interest Rates and Fees - Look for the lowest APR deal just in case you need to carry a short-term balance. Don’t take for granted that a card has no annual fee, as more companies are charging one, especially if there is potential for big rewards. Do a cost analysis on a variety of cards before choosing one.
Travel with Safety in Mind
By using a credit card when you travel, you will be protected against unauthorized use and only obligated to pay $50 of the total fraudulent charges. But the effort it will take to make things right is a good reason to be more vigilant when you travel. Crooks consider vacationers an easy target with all the distractions and excitement that comes from being in a new place that may lead to the temptation of letting your guard down. Rather than react to a crime after the dirty deed has been done, it’s wise to be proactive in order to help to prevent it in the first place. Be aware of your surroundings. Be protective of who handles your credit card to help prevent crooks from taking what belongs to you.
Going to an unfamiliar place has its risk, but by using a credit card designed for the way you plan to travel, you’ll enjoy the convenience while knowing you’re protected. Be sure you understand all the terms, fees and limits on any card you want to use before relying on it for your big trip abroad.
Vanessa May is a blogger and regular contributor to www.wowcreditcards.com who prefers to write on finance related topics. She focuses her writing primarily on credit and debt, but also enjoys sharing tips on living a frugal lifestyle and money saving tips. She works hard to provide useful information to aide consumers with their finance and money management decisions.
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