Tips On Using Your Credit Card Abroad

Over £20 billion pounds was charged by UK credit card holders to their credits while they were abroad in 2004. In total, there were more than 260 million credit card transactions in places as far away as Japan and Hawaii.

Obviously, the global credit card is an extremely useful way for Britons to spend money while they’re overseas. But, it is estimated that UK credit cardholders will pay over £600 million in fees to their credit card issuers for the privilege of being able to use their credit card while abroad. To make sure you don’t have to pay more than is absolutely necessary, the following are some basic tips to using your credit card abroad:

Avoid cash withdrawals

Out of the £20 billion Britons’ charged to their credit cards while abroad, a staggering £9.5 billion was accounted for in cash withdrawals! While it is true that credit cards are a useful travel companion, when it comes to cash withdrawals on your UK credit card you should be adopting the same policy as you do at home – don’t! Not only are you likely to be faced with a cash withdrawal fee, but you will also, likely, be faced with having to pay interest on the amount charged from day 1, with no credit grace period given.

Watch out for the exchange rates

Cheekily, most credit card providers in the UK do not apply the market exchange rate for UK credit card transactions transacted abroad. Instead they apply a slightly inflated exchange rate, which means that you end up paying more in pounds than you may have originally thought if you had converted the exchange rate in the shop. Consequently, before you purchase anything on your credit card while abroad, always make sure that you figure in a bad rate of exchange when you do any currency conversion.

Also, very importantly, before you sign any credit card payment slip overseas, make sure the amount of the foreign currency is correct – it can be so easy to get the hundreds and thousands mixed up if you are not use to dealing in multiple foreign currency transactions!

Watch out for the insurance

Depending on where you use your UK credit card overseas, some credit card providers will tell you that the insurance scheme on your card will not cover the transaction. In fact, a recent ruling by the Court of Appeal has said that this should apply – but only to purchases of more than £100. Therefore, before you use your credit card overseas, check your policy and make sure you are getting the same insurance cover you would get back home.

Always keep your credit cards with you

Fraud from overseas use of a credit card is growing significantly. You cannot immediately assume everyone is honest. To avoid any identity theft and misuse of your credit card overseas, make sure you always keep your credit cards in your sight and do not give your personal information blindly to anyone.

Try to keep your credit cards for emergency use only

There is no doubt that having access to a credit card while travelling abroad is an extremely useful tool. However, you should not discard so of the more traditional ways of paying for items overseas, such as traveller’s cheques, in favour of credit cards. In an ideal world, your UK credit card will be a useful alternative to these, which you can use in an emergency situation.

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