Traveling overseas: preparing your accounts before, during and after
February 14, 2020
Your flight and hotel are booked for an awesome international vacation. But before you leave for your trip, you need to do a little housekeeping with your wallet first. You want to make sure you have the right credit card — one that will protect you and your luggage, will earn great rewards and won’t charge foreign transaction fees.
Preparing your credit card before you leave
In the weeks leading up to your overseas vacation, there are a few steps you want to take, including reviewing what’s in your wallet, contacting your bank and bringing debit and credit cards that eliminate or reduce fees.
Remove unnecessary items from your wallet
Just like you aren’t packing your entire closet, you don’t want to bring everything in your wallet when traveling overseas. Some travel destinations are well-known for being targets of pickpockets, and accidents happen where you could easily lose your wallet. In either situation, you don’t want to lose more than you have to.
Clear out cards that you won’t need, such as your library card and your gym membership. Then put important documents away for safekeeping. Your Social Security card is incredibly valuable in the hands of thieves, for example, so keep that in your safe at home.
Inform your bank of your travel plans
Banks are constantly monitoring your transactions to sniff out fraud. Whenever transactions start happening that are outside of your normal pattern, it’s possible the bank will freeze your credit card. This can be embarrassing and potentially troublesome on your trip.
It is best to contact your bank and let it know where you’ll be traveling. The bank will place a note on your travel credit card account so your transactions won’t be flagged as suspicious. To place a travel alert on your travel credit card, you can call the bank, send a message through online banking or use the mobile app.
Pick an ATM card that reimburses fees
When traveling overseas, you likely won’t find an ATM from your bank to get local currency. Using another bank’s ATM often carries extra fees from both the ATM and your bank. Get an ATM card from a bank that doesn’t charge fees and reimburses ATM fees so you can avoid these charges. Two of the most popular options for debit cards that reimburse fees are the Charles Schwab debit card and the SoFi Money® debit card.
Bring the right credit cards
You may have a favorite credit card that works wonderfully within the U.S. However, when you travel internationally and start generating foreign transactions, you may get hit with hidden fees. These foreign transaction fees add up to 3% of your purchase if you’re not using the right credit card.
One of the most popular travel credit cards is the Chase Sapphire Preferred credit card. Not only does it waive foreign transaction fees, but it earns 2x points on travel and dining purchases worldwide. It also offers several other protections, like baggage delay insurance, trip delay reimbursement, and trip cancellation or interruption insurance.
Get a chip and PIN credit card
In the U.S., most merchants require that your credit card have a chip in order to process a transaction. This added layer of security protects you and the merchant against fraudulent purchases. In Europe, they go a step further and often require that you enter a PIN to go with the chip. This is called “Chip and PIN” versus “Chip and Signature” in the U.S.
Not all credit cards offer chip and PIN technology. Barclays is based in England, so they are one of the few that has this technology on all of their credit cards. The AAdvantage Aviator Red World Elite Mastercard from Barclays is a great travel credit card because it earns valuable American Airlines miles and provides free checked bags and priority boarding for cardholders.
Keep a list of your credit cards
In case your wallet is lost or stolen, it pays to have a list of the contents of your wallet in a safe place. You’ll want to write down the bank name, credit card number, and bank phone number. This information will make the process of freezing or canceling those lost credit cards simpler. For easy access, store your list online in a secure folder or leave it with someone you trust back home.
What is the best credit card for an international vacation?
The credit card world is very competitive so there are many reward card offers to choose from. Find one that fits your interests and provides benefits that are valuable to you, such as travel rewards, a low interest rate, or cash back.
Travel credit cards
Travel credit cards reward people for traveling. The best travel credit cards not only earn bonus points for airfare, hotels, and rental cars, but also provide valuable benefits that protect you from mishaps.
The Chase Sapphire Reserve credit card is a premium travel credit card that offers tremendous value. It earns 3x points on travel and dining, gives TSA PreCheck or Global Entry reimbursement, and provides airport lounge access through Priority Pass. The points it earns can be used to purchase travel, or can be transferred to one of 13 airline or hotel transfer partners.
Low-interest credit cards
If you’re making a big purchase or need to make a balance transfer to reduce interest, look into low-interest credit cards. These credit cards offer a promotional interest rate as low as 0% for purchases or balance transfers. For example, when buying a cruise around the Mediterranean, you may want to pay the cost over time. A credit card offering 0% APR on purchases can be a great option.
The Citi Simplicity Card is one of the best low-interest credit cards. It offers 0% APR on purchases for the first 12 months. Plus, balance transfers get up to 21 months of 0% APR. After the promotional period is over, interest rates will revert back to the normal rates of 16.24% to 26.24% based on creditworthiness.
Best cash-back credit cards
As great as travel rewards can be, getting cash back on your purchases can be really attractive. For example, instead of earning miles that can only be used to book a flight, cash that you earn can be used for anything. You may choose to use it to pay off debt, add to retirement accounts, or splurge on a great meal or unique attraction during your trip.
One of the best cash-back credit cards for people who travel is the Capital One Savor Card. It earns 4% cash back on dining and entertainment, which are two of the biggest categories of spending during a vacation. And when you’re not out on the town, you’ll earn 2% cash back on groceries and 1% everywhere else.
Business credit cards
Small business owners have extra opportunities to earn rewards and benefits with business credit cards. When an airline, hotel, or bank has both a personal and a business version of its credit card, you can double up on the welcome bonus. Plus, you can take advantage of category bonuses that might not be available on reward card offers, such as office supplies, online advertising, and shipping purchases.
One of the best business credit cards is the Chase Ink Business Preferred. This reward credit card offers 3x points on travel, shipping purchases, internet, phone services, and online advertising. You can use the points to purchase travel or transfer to 13 hotel and airline transfer partners. It offers $600 per claim in cell phone insurance and there is no charge for employee cards.
Credit cards for bad credit
When traveling, you’ll need a credit card to pay for plane tickets and reserve hotels and rental cars. When you have bad credit, these purchases can be tough. Rest assured, there are credit cards for bad credit situations.
The Capital One Secured Mastercard is one of the best credit cards for bad credit. You’ll start with a $200 credit line and you’ll be rewarded with an increased line of credit after making five on-time payments in a row. When making a larger deposit, you can have a starting credit line up to $1,000.
How to protect yourself during your international vacation
While on your vacation, there are some simple steps you can take to protect you and your wallet.
Use an RFID wallet
With more credit cards offering contactless payment, this is another avenue that savvy criminals can use to steal your money. Radio frequency identification-blocking wallets (RFID wallets) can protect both your credit cards and your passport while traveling.
Always pay in the local currency
When making purchases abroad, always pay in the local currency. Whenever a store offers you to pay in U.S. dollars, they are building in a fee for this “convenience.” When you pay in the local currency, your bank performs the currency conversion with competitive rates to save you money.
Register for online banking and download your credit card app
The best way to keep tabs on your credit cards while traveling internationally is to register for online banking. Downloading the mobile app to your phone or tablet makes logging into your credit card account even easier. You’ll be able to verify transactions, make payments, and transfer money from one account to another.
Sign up for automatic payments
While you’re traveling, the last thing you want is a late payment dinging your credit. By signing up for the automatic payment of the minimum amount due, you’ll protect yourself. You won’t get hit with late fees for missing the payment and a 30-day late notice won’t affect your credit. Ideally, you pay off your credit card balance in full each month to avoid interest. But even if you can’t pay the balance in full, at least you’ll avoid unnecessary fees.
Unpack more than your suitcase
When returning from your overseas vacation, unpacking your suitcase isn’t the only thing you should do.
Review credit card accounts and reconcile your receipts
Log on to your online banking accounts and review your credit card accounts. Do the transactions match your receipts? Always be on the lookout for suspicious transactions or amounts that you don’t recognize.
Dispute unknown transactions
If there are any unknown transactions, dispute them with your credit card company. Although your liability is limited to $50 per lost credit card by law, most banks waive all unauthorized transactions. However, you must notify customer service within 30 days of your statement closing, otherwise, you could be liable for these fraudulent charges.
The bottom line
When planning an international vacation, it pays to be prepared. Remove unnecessary items from your wallet and be sure to carry a travel credit card. Look for one that earns great rewards, provides valuable benefits, and doesn’t charge foreign transaction fees. During your trip, pay in the local currency and keep in contact with your bank to avoid fraudulent transactions. When you get home, reconcile your receipts against your statement and be on the lookout for unauthorized charges.