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Using Credit Cards Overseas

In a number of specific circumstances in many countries, travelers will find their credit cards indispensable when traveling overseas. However, a degree of caution and some dilligence in doing ones homework is in order before ever taking the trip.

The major advantage of using credit cards overseas is protection from fraud. The Fair Credit Billing Act not only protects you from having to pay for bad merchandise inside the United States, it protects you when you make these purchases overseas as well. The condition is that the issuing bank must be a U.S. bank and you must be a permanent resident of the United States. This is one of the reasons why many credit card companies and their issuing banks will not issue cards to customers outside this country. American Express is an exception. Of critical importance here is proper maintaining of written records and documents. When buyong expensive items overseas such as jewelry and gifts, one should obtain a precise description of the intended purchase either in handwritten form from the merchant or clearly on the transaction slip. This will be of great value in case you wish to obtain a chargeback for fraud.

A number of credit card issuing banks will charge a currency convertion fee for purchases overseas. Since not all of them do this, it is worth your time to find a company which does not charge such a fee when you shop for a card. The currency convertion fee may be 1 or 2 percent of the amount charged. In countries where the dollar is particularly powerful, this tends not to be significant, in the big picture. In other nations, it can be a worthwhile consideration.

A major consideration, particularly for vacationers who will be frequenting tourist spots and busy public areas should be the possibility of theft. In a number of countries the world over, pickpocketting rings are quite prevalent. They prey on tourists in public squares, on public transportation and along popular tourist routes. It is not unusual for some of these to be young children trained to work in groups. It usually works as follows: One of the children causes a distraction, for example by bumping into a chosen victim, while another removes the victim's wallet while he is disoriented by the contact from the encounter.

Because of the value of your credit card when in another country, you should seriously consider keeping at least one of your cards separate from the others and in a secure area. If you must carry this card with you, keep it in a different pocket such as your front pants pocket or in a pocket inside your coat which you keep buttoned. Women should always keep this card outside their purses, if they carry these. Purse snatching rings operate quite routinely in a number of countries you may visit. Don't bank on being able to cry for and obtain help immediately because it is common for such thieves to operate using motorcycles, for example, and they will speed off after the robbery is conducted. If you are ever the victim of theft, having protected and having access to a single credit card will be of enormous value. It will allow you to obtain cash via cashback transactions (for a fee) and you will be able to continue to make other necessary purchases before heading back home.

There is a major difference between commerce in developed countries and that in underdeveloped and developing countries. In underdeveloped countries, cash is very often the most convenient form of transaction. However, the strength of the dollar in such countries means that it is very difficult to get a bad deal on locally produced merchandise if you exercise a decent amount of care. Don't expect the quaint little pottery store to be able to accept your credit card. It's a lot more of a hassle for the merchant than you might expect.

In more developed countries, VISA and MasterCard, in particular, will be accepted in many establishments. American Express is much less so and the Discover Card is not accepted outsid the U.S. at all. A number of unscrupulous merchants will attempt to assess a surcharge for credit card purchases. Note that these are not always illegal under the laws of that particular country, but they are forbidden by VISA and MasterCard. As far as these two companies are concerned, you do not have to pay such charges. If you are forced to, make sure to obtain proper wriiten itemization of these charges and request a charge back when you return to the States.

One common problem with using your credit card overseas is knowing how close you are to your credit limit. Since prices are in foreign currency, it is not always easy to keep track of the real amount of your expenditures. Proper record keeping and attention is important if you feel you might run the risk of overspending. This is not a problem with American Express since there is no fixed credit limit, but for VISA and MasterCard, caution is necessary. One advantage to using your card overseas, however is the time it takes for your charges to be reported and to appear on your account. The period between your purchase and the date when your bank registers the charge is effectively a grace period on your account.

Your credit card also gives you access to help by phone via local card agencies. The numbers you are used to calling in the U.S. will not be your best option because they are not toll-free outside the county. But the major credit card companies have local agencies in most countries and you should be able to find numbers for these with a little effort.


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