Using a Credit Card Overseas: Tips for Canadians
One of the greatest methods to handle your money when traveling abroad is by using a credit card. Even while you might still need to buy some local money, charging the most of your purchases will allow you to carry less cash.
Generally speaking, using a credit card abroad shouldn’t differ from using one at home, regardless of the bank or credit card company you work with. To help you save money while shopping overseas, there are a few strategies to think about both before you leave and while you’re away.
What to do before your trip
To prevent your credit card transactions from causing any unneeded hassles, there are a few extra procedures to take in addition to choosing which credit card will go with you.
Contact your bank
You might wish to phone your issuer in advance to let them know about your vacation plans, even though the majority of credit cards have security safeguards in place to detect and prevent potential credit card fraud. It could appear odd to charge something to your card from halfway around the world, and it could result in an automatic block that stops you from using your card. That won’t happen if you add a note on your account.
Optimize — and remember — your PIN
Since many terminals outside of Canada won’t take PINs larger than four numbers, if your credit card is protected by a PIN, make sure it is just four digits. If a retailer doesn’t offer a tap or insert option, don’t be concerned. You can still make purchases by swiping your card.
If you don’t typically use your card in person and enter your PIN, make sure you memorize it before you leave.
Bring backup payment methods
You might want to travel with more than one credit card for increased security. This implies that in the event that your primary card is compromised or lost, you will have a second method of payment.
It’s also a good idea to have some cash on hand, especially if you’re going somewhere distant where electronic payments might be less popular. Even if using a debit card may result in costs, it is still wise to have one with you in case you absolutely must use an ATM to withdraw cash.
Consider a credit card with no foreign transaction fees
Any purchase made with a credit card in Canada that is not made in Canadian dollars is subject to a 2.5% international transaction fee. Even while the cost first seems small, it eventually mounts up, especially when you’re on vacation and may complete numerous transactions each day.
Thankfully, a few credit cards don’t charge foreign transaction fees. You can use your credit card normally and only pay the exchange rate on your purchases if you do your research and apply for one of these cards well in advance of your trip.
Watch out for dynamic currency conversion
In your thoughts, converting between different currencies might be challenging. Some retailers provide you the option of paying in either the local currency or your home currency to make things simpler for you. This process, known as dynamic currency conversion, will display the exact amount in Canadian dollars that you will be charged.
When using your credit card to make a purchase, it could seem alluring to use Canadian dollars (CAD), but the exchange rate is probably not going to be in your favor because doing so usually entails paying extra.
You will be charged the exchange rate determined by Visa, Mastercard, or American Express if you opt to pay in the local currency. This is probably much more in line with the standard exchange rate. Unless you have a credit card that doesn’t charge one, you’ll still have to pay a foreign transaction fee in either case.
Check your credit card statements when you get home
Always monitor your monthly credit card bills, but it’s especially important to do so after a trip. Verify the quantities listed are accurate by comparing the charges to what you really purchased. You might need to start a fraud inquiry if there is a transaction that you don’t recognize.
It doesn’t have to be difficult to use your credit card abroad, and you shouldn’t try to limit your costs and security concerns. Choosing a credit card with travel benefits like insurance and lounge access can increase the benefits of using a credit card abroad.
Frequently asked questions about using credit cards overseas
Can I use my credit card internationally?
You should be able to use your credit card abroad whether you have a Visa, Mastercard, or American Express card. Which bank issues your credit card shouldn’t matter either. For instance, if you have a credit card from RBC, CIBC, TD, or BMO, you should be able to use it to make purchases when traveling abroad.
Which is better for travelling, a debit card or a credit card?
Your debit card could not be accepted when you go shopping or try to pay for a meal in other countries since they have different payment methods. A credit card might be more dependable in these circumstances. You’ll probably be charged by each one.
Is it better to use credit card in foreign country?
In contrast to using cash, using a credit card abroad offers security and ease. With every purchase, you’ll accrue points that you can later use to book other travel experiences. Purchase protection may also cover your purchases, providing you with additional security.