Before you pack your bags and book your flight for an overseas summer vacation, you should take a look at your finances. Arriving in a new country and figuring out that you do not have enough funds to purchase things, or you forgot to bring along your emergency credit card, can be a major disappointment. But before you bring every card in your arsenal, you should figure out which one will be best for your trip. Choosing the right card is imperative because it can go a long way in protecting your credit score. Here are a few things about your credit card you should consider:
Foreign transaction fees
You may not have been aware of this when you signed up for your card, but some come with a foreign transaction fee. Every time you make a purchase in a foreign country, you will be charged a fee of a few percentage points of the purchase. This can be a huge charge, which can make funding your vacation tough and cause your credit score to be affected by an increased credit-utilization ratio.
Look at your card's contract and see if it has one of these fees. If you don't have this lying around, you can call the credit card company.
Credit use charges
ATMs charge fees if you do not use your bank's approved stations. If you think these are expensive charges in the U.S., they can be even bigger for banks in foreign countries. Not only will these fees be pricey, but if you are using the cash advance option for your credit card, you could also take out a huge chunk of your card's limit in the process.
To avoid this, investigate whether your bank has international partnerships with other countries, which help you avoid the fees.
The latest credit card technology has come to Europe and Asia, as many consumers now have Europay, MasterCard and Visa (EMV) cards. This type of card has a chip inside that stores all the user's information. It is used instead of a magnetic strip to help safeguard someone's information. Many businesses and ATMs in Europe and Asia only accept these cards, and if you have a magnetic-strip card, you may be out of luck. These cards are slowly coming to the U.S., so see if your bank has this option.
If you consider yourself a nomad and have an airline rewards card, this could be your lucky day. If you use this type of card for your vacation, you could get a few perks, such as free checked bags, priority boarding or discounts for beverages you buy on the plane. These savings can go a long way in minimizing your credit-utilization ratio.
Contact your credit card company
A credit card company does not know your travel schedule, so it is important to let its representatives know that you are going to a foreign country. This is a safety precaution because if the company sees an unfamiliar foreign transaction on your account, it may think that your card was stolen and shut the account down. Simply give your credit card company a quick call and let them know that you are going to be spending a few days abroad this summer, for instance.
Bring a backup card
While you are making sure that you have extra socks and shoes for your trip, pack a backup credit card. You never know if there will be a technical glitch with one of your cards or if one will not be accepted by EMV machines, so have an extra one packed just in case.