Using Credit Cards Abroad
It is becoming more and more popular for people to take their credit cards abroad. The convenience and security that a credit or debit card offers, does seem attractive but if you do not have the correct type of card, you can be hit with hidden charges and foreign transaction charges. You will then be in for a little shock on your return, once you receive your statement.
If you plan on using credit cards abroad and get the right card that allows you to spend whilst you are abroad, without incurring any additional costs and one that provides you with the “Best Exchange Rates For Euros”! If you choose the right card for spending abroad, it can certainly be one of the cheapest ways to pay for your items.
This said, there are only a few cards currently available that actually fit the above criteria and before you use your own card or sign up for a new card, you need to know and be fully aware of the ‘Terms and Conditions’ for that card.
Loading Charges On Credit Cards Abroad
The problem with spending on a card whilst abroad, is that most cards add a 2-3% additional ‘load’ charge to the exchange that the bank originally receive. The rate of exchange you receive on your credit card , is set by the Visa/Mastercard wholesale rate and this is generally quite a good rate. However, your bank will then add the dditional ‘Loading Fee’ on top of this usually 2.75%. This will not show up on your statement, so unless you are aware of this charge, you will be non the wiser!
When you are searching for the right travel money cards to use abroad, it is advisable to check whether the card will incur this additional charge or not.
Cash Withdrawal On Credit Cards Abroad
Credit card companies make money every time you withdraw cash from a cash machine abroad. They will generally charge you a minimum fee for every withdrawal or will charge you a percentage of the total amount you withdraw. It is worth noting that there will be no ‘Interest Free’ period and you will start to pay interest from the time you withdraw you cash and you may end up paying a higher rate than your usually APR!
Spending Fees On Credit Cards Abroad
Most of the high street bank debit cards will charge you for spending on them and usually charge a fee every time you spend. Some will also charge a cash withdrawal fee and this will still be charged, even if you pay your card in full.
If you do choose to use your card abroad to purchase a product and the retailer from who you are buying asks you if you want to pay in Pounds or Euros, always say Euros. If you chose to pay in Pounds, they will calculate the conversion rate and it will generally be a much worse one than the one you would receive on your card.
Hidden Extras On Using Credit Cards Abroad
The following is a summary of the hidden extras you should be aware of before you start spending on your cards abroad.
Load fees: You do not want these extra fees added to the exchange rate
Cash Withdrawal Fees: You do not want to incur a fee every time you withdraw cash
Spending Charges: Incurring a fee every time you make a purchase on your card
Using your credit cards abroad can be costly if you do not realise the hidden costs involved when using them. Having your credit cards abroad is handy and good for emergencies, just be wise when using them or take one of the travel money cards available that do not carry these fees.
Useful Pages:
Best Exchange Rates For Euros – Compare Exchange Rates