Going on vacation is usually a happy, wonderful experience. You get to spend time with your family, experience a different culture and get away from the distractions and work of your normal life.
Sometimes though, there can be a nasty surprise waiting for you if you decide to use a credit card to make purchases while you’re vacationing. Most banks and credit cards will charge a fee simply for you withdrawing money from a cash machine or whenever you initiate a credit transaction! On top of that, any money withdrawn and not paid off in full, could be subject to up to 29.9% interest!
Being educated on these fees while abroad is one way you can keep a cap on your spending and reduce any additional APR that might be charged while you’re away. Consider shopping offers online or check out the best available credit card options to see which one suits your needs.
Look carefully at the foreign transaction fees associated with each card – the amount of interest you’ll be charged on any spending. If you have a credit card that contains fees, then make sure that you try to limit transactions using the credit cards. However, if you do your research in advance, and know you’ll be spending quite a bit of money overseas, then compare cards and look for one that doesn’t charge a fee.
Knowing the additional transaction charges ahead of time will allow you to budget for them or you can choose alternate routes of accessing money such as using a prepaid credit card (if you choose not to apply for a new credit card that doesn’t contain the transaction fees). Prepaid credit cards are cards that you pre-load with money and use like a credit card, without the risks of overdrawing your account.
They’re useful if you have the available funds in your bank to do so, but aren’t an option for many people. Just make sure that when you go overseas that you’ve researched, and know the best card for your spending, and that you reduce charges wherever possible.
WSL Editor’s Note: Mrs. WSL and I have only been overseas (together) one time and that was during a cruise for our honeymoon. At that time I didn’t use credit cards, cleared my debit card with my bank before we set sail, and incurred no fees while we were traveling. However, now that we’re taking more advantage of credit card rewards, I quickly reviewed my two current cards and I found out that my Chase Freedom card charges a 3% foreign transaction fee whereas my Chase Sapphire card has no foreign fee. Hmm…interesting.
Readers: have you ever traveled overseas and got hit with foreign transaction fees without realizing you were incurring them? If you travel overseas frequently, have you specifically applied for cards because they don’t charge foreign transaction fees?
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