Are you traveling abroad this summer and unsure which of your “plastic” you should bring with you? Travel is already a luxury but it can get even more expensive when each purchase is racking up additional fees. Recently I went to Asia and did some research of my own. Hopefully, this will help you decide which of your cards you should bring, what fees you should know about, and when to use a debit card versus a credit card.
Foreign Transaction Fees. This fee is a surcharge for making a purchase in a foreign currency. Most often the fee is about 3% of the total transaction. Foreign Transaction fees are very common on most regular credit cards, but many travel cards do not have this fee. The Chase Southwest credit card, for example, does not charge a foreign transaction fee.
Good To Know
Check your card benefits. Credit cards often offer nice benefits, such as included travel insurance or lost baggage reimbursement, when you book your travel with your card. Check your card benefits before you buy extra trip insurance when booking flights and hotels, as it might be double coverage you don’t need.
Easily dispute a wrong transaction. Keep all of your receipts until transactions are posted to the card, as this will give you proof against fraudulent transactions.
Always choose the foreign currency. You might be asked if you want to charge in dollars or the foreign currency. Always choose foreign currency because your card issuer will give you a better exchange rate on foreign transactions than the vendor will. If you brought a card that does have a foreign transaction fee, it could be better to charge in USD to avoid the fee depending on the difference in rate.
Check if your provider is accepted where you are going. When going abroad, it is best to stick to Visa or Mastercard, as American Express and Discover are less widely accepted worldwide.
Cash is king. In many countries, you will find that most places are cash dependent. Remember credit is not always accepted and you will need to have some cash on hand.
ATM fees. This fee is often set as a dollar amount per withdrawal charge for using a non-affiliated ATM. The Wells Fargo preferred debit card, for example, has an ATM fee of $5 per withdrawal.
Foreign Transaction Fees. On top of ATM fees, debit cards also have foreign transaction fees like credit cards. The Wells Fargo preferred debit card, for example, will also hit you with a 3% foreign transaction fee. Withdrawing $500 would cost you $20 – $5 ATM fee and $15 in foreign transaction fees.
Good To Know
Check if your bank is prevalent or has ATM partners abroad. Citibank, for example, partners with the ATMs in 7/11 stores. Anywhere there are 7/11’s you can use an ATM with no fees. Many large banks have foreign counterparts.
Get cash from ATMs only. Exchange rates are often best at large bank ATMs. The worst rates are at the exchange kiosks, especially the ones in the airports.
ATM fee reimbursement. Some banks, mostly ones who are entirely online, with no brick and mortar ATMs, will offer a per-monthly-cycle reimbursement of ATM fees. For example, the Ally debit card gives a $10 per month reimbursement on ATM fees. This is nice, but when abroad and using an ATM multiple times in a short period, the $10 would not be sufficient.
Little to no protection. There is practically no protection against fraudulent money transactions on a debit card. Once money has been withdrawn, you do not have the same ability as you do with a credit card to refute the transaction. If your debit card and pin were stolen, the amount in your checking or savings might not be recovered. Do not use your debit card when you are out. It is best to leave it in the hotel room’s safety deposit box or in a safe place. I keep my checking and savings account balance at a minimum when I travel as I find it is easier for me to transfer money when needed than take the risk.
Daily ATM withdrawal limit. Debit cards can limit the dollar amount you can withdraw in a 24 hour period. I have seen this range per bank between $300-$2,500. Not every card does, but it’s something you want to know before you leave home so you can plan accordingly.
Set Travel notifications for all cards you are bringing. Notify your cardholders of when and where you are going abroad. This can be done online usually under the travel section of the website, in the bank app or over the phone.
Use your cellular data. Cellular data on your mobile phone (LTE, 3G, etc.) is a private channel and can not be accessed by others (unless allowed by opening your personal hotspot). If you must access bank and credit card information over public wifi, do so on your personal laptop and use a VPN service like encryptme to make sure your internet connection is private. Never use a public computer, especially with public wifi, to access any private information or anything requiring you to enter a username and password.
Download phone apps before you go and use fingerprints to log in. Fingerprint login’s, like on the iPhone, are safer. Your fingerprint cannot be copied or stolen over the web, unlike a typed password. By downloading apps before you go and setting up a fingerprint login, you can do most all your web searching abroad without ever having to type in a password.
Make sure your phone and all apps are locked with a code. This ensures that if someone steals your phone, they can’t access your personal data.
It is better to use credit cards for purchases and debit cards to get cash. If you have multiple debit and credit cards, make a list of their fees and decide which is best to use and only bring a few cards. Don’t forget to keep your research handy and somewhere easy to locate to remind yourself for your next trip!