Traveling with credit cards and debit/ATM cards can be confusing.  Will they work overseas?  What extra fees will I pay?  Do I need to take all of my cards?  In addition to having local currency, we always take at least 1 or 2 credit/debit cards.  That way if we have unexpected travel issues, we’ll have access to money to help us get back on our way.  You don’t need to take a whole raft of other cards.  Why risk them getting lost or stolen?  Take only the cards you absolutely need or intend to use.  Leave everything else at home safe and sound.  Plus, you won’t have that bulky wallet in your pocket just tempting someone to steal it or take it from you.

What cards should I take?

It’s always better to carry a credit/debit card versus a “debit only” card.  Why?  Sometimes “debit only” cards may not work in foreign countries. With a credit card, you’ll have an easier time disputing charges and also zero liability protection, should your card be lost or stolen.  Also, be aware that in foreign countries, you PIN number may not work on your card.  If traveling in Europe, you should take special precaution.  European debit/credit cards are moving to a 6 digit PIN along with a security chip embedded in the card.  Some travelers have reported that they have had difficulty getting some merchants to accept their cards.  As long as your card has a VISA or MASTERCARD logo on the front, the merchant is required to accept your card.

Fees, fees, fees

Remember that there’s a cost to using your credit and debit cards outside of your home country.  You didn’t think the credit card companies were going to pass up this opportunity to make money did you?

You should check with your credit card company to see what “foreign transaction fees” they charge.  Foreign exchange fees can be up to 3% or more on your transaction.  And that’s in addition to the standard VISA or MasterCard fee of 1%.  Capital One currently does not charge any foreign transaction fees and absorbs the 1% MasterCard fee.  The foreign transaction fee is added to your purchase after it is converted into local currency.  That foreign exchange rate that the credit card company is usually higher than the rate you see on Yahoo or displayed on other rate services. These are fees that are automatically added to your purchase (on your monthly statement), in addition to the “banks” foreign exchange rate to convert the transaction into your local currency.  These fees can add up quickly.

You can see how quickly you can be paying alot more for your purchase.  Take this example on a €100 purchase.  The raw exchange rate may be $1.35, which would make the purchase $135.  But the credit card company marks that up to $1.45, which now adds another $10, to make it $145.  Now, add the 3% foreign currency transaction fee and you’re $135 purchase, just became almost $150.  Now assume with all of the hotel, food and souvenir purchases you make on your credit card and you can end up spending alot more than you planned on your vacation.  The worst thing is you don’t realize until you get home and get your first statement.

Tips on traveling with cards

There are a few simple things you can do in less than 10 minutes, that will help you ensure that you’ll have access to your cards when you travel.

No matter what cards you take,  call the issuing financial institutions/companies a couple of days prior to leaving. 
That will help prevent your transactions from being blocked, since many banks block foreign transactions to reduce theft. The last thing you want is to be abroad and find out your card has been declined.

Look on the back of the cards you’re taking and make sure they have overseas contact numbers for the card issuer.
If you don’t see one, call the company and get one.  Then, write them down on a piece of paper and make a copy.  We also put them in our address book in our phone.  Leave one copy behind with someone at home you can easily reach PLUS put one elsewhere in your luggage (not in your wallet.  What if it’s stolen?)  They’re just phone numbers, but at least you’ll have them available if your card(s) are lost or stolen.  The last thing you want is to be spending money calling directory assistance trying to get the number for your institution.

Consider lowering your daily withdrawal or spending limit on your credit or debit card.
It’s easy to do and can be done by simply calling your financial institution.  First, consider how much you’ll be spending on average each day on your cards.  You certainly don’t want to be caught “short handed”.  The advantage to doing this is if your card is lost or stolen, at least the risk of losing a lot of money is minimized.   Remember, with debit cards, it takes a lot longer to potentially get your money back.  Can you really afford to be without a large amount of money for weeks after you return?  When you get back, call your financial institution and have them raise your limit back to where you’d like.

Keep a list of your credit card numbers.
You should leave this with a person at home that you trust.  That way, if your cards are lost or stolen, you’ll have access to the numbers so you can quickly report them as lost or stolen.  The quicker you have the information, the less chance you’ll have of major loss.  We also keep these numbers on an encrypted file on our phone, as well on an encrypted website and file on the internet. That way we always have immediate access to our information.

Keep an eye on your card at all times.
Think twice before sending the waiter away with your card.  It only takes a minute or two to “clone” your card.  You may be a victim of theft and not even know it until you return home.  Worse yet, you may find out while on your trip when you try to check in to your next hotel and your card is declined.  In some foreign countries you’re in luck as they bring the credit card machine directly to your table, so you always have your card in your possession.

Using your ATM card overseas

Don’t expect an ATM on every corner in some foreign countries.
Based upon where you’re traveling to, they can be a challenge to find.  A good thing to do is check for ATMs in your destination country/city before you leave home.  Plus, don’t forget they’ll need to be on your “network”.  You can find the network on the back of your ATM card.  Two of the most popular are “PLUS” or “CIRRUS”.

Don’t expect an ATM to always work.
Even if you find an ATM that’s on your network, don’t necessarily expect it to work.  In order for ATMs in foreign countries to give you cash, they need to connect to your network to make sure you have available funds.  We can tell you from experience, that it’s amazing how many ATMs have been “offline” or are having “network difficulties”.  If they can’t connect, you don’t get cash.

Use ATMs in a bank if possible.
ATM’s located in major banks outside of your home country are probably the safest ATMs to use.  ATMs on streets, in bodegas or small shops may charge large fees or worse yet, supposedly “not be able to connect to your network”, but capture your card information and PIN.

Don’t overuse ATMs.
Every time you use an ATM overseas, you could be charged a fee by not only your bank, but the bank’s ATM that you’re using.  In addition, you’re withdrawal will be converted at the “bank’s exchange rate”, which is almost always higher than the “base exchange rate”.  By taking small withdrawals out often, you’ll be racking up fees on each transaction.  It’s better take a bit more money out (as much as you feel comfortable carrying) than making multiple withdrawals over a day or two.

Make sure your PIN will work overseas.
Many foreign ATMs now use 6 digit vs 4 digit PINs.  It’s best to check with your financial institution to make sure your ATM card will work overseas.

Call your bank. 
With card theft on the rise, many banks will automatically decline transactions that originate in foreign countries.  To make sure you don’t have any issues using your card when traveling out of the country, you should call a few days before you leave and let them know where you’ll be traveling to and how long you’ll be gone.  That way, you won’t have a rude surprise waiting for you when you need money.

Don’t expect ATM’s to use English.
In many countries who don’t use English as a primary language, you can’t expect ATM’s to serve up prompts in English.  While most airports will have prompts in various languages including English, as you move into suburban or remote areas, they may be harder to find.  It’s a good idea to look up basic ATM terms (i.e. withdrawal, checking, savings, deposit, etc) in the native language before you leave.

IAH TIP:  Also think about reducing your daily withdrawal limit while you’re away.  That way, if you lose your card while traveling, the chances of having your accounts drained of cash are reduced.  Also, if you’re traveling to higher risk areas like Rio, Sao Paulo, Naples, etc, and be held up and taken to an ATM to withdraw money, you’ll limit the amount of cash that will be stolen.  Don’t think it can’t happen.  It has to people we know.

Travel frequently?

We travel to other countries almost 6 times a year, sometimes to remote areas.  We opened an account at HSBC.  HSBC is a large worldwide bank, with locations in just about every country on earth (except for most of the US).  You can do all of your banking online and we’ve never had trouble using our ATM card in any country.  Plus, even if some of the most remotest areas of the world, there’s an HSBC ATM or bank location.  They also offer credit and debit cards as well.  Check them out at www.hsbc.com.