The following takes a look at some of the ways to more responsibly use your credit card while abroad and keep costs down in the process.
Even at home, it is generally not a good idea to use a credit card for withdrawing cash. This is because the lender will usually charge a fee of around £2 to £3 every time you withdraw money. Additionally, cash withdrawals and other types of similar transactions, such as foreign currency purchases, tend to start accruing interest straight away.
Using a credit card to withdraw cash abroad means that you will have to pay these additional charges as well as, in most cases, a foreign transaction fee. The bank's exchange rate will likely not be very favourable either.
In total, you can easily end up spending 10-12% more on the money you withdraw on a credit card while abroad. Instead, it is almost always better to use your debit card to withdraw cash abroad.
If you go abroad regularly, you may find that it makes more sense to get a credit card which is specifically tailored to those who want to use it abroad. Many banks offer far more favourable deals than standard credit cards do.
Although credit cards are more widely accepted around the world than ever before, this is still not the case everywhere you go. For this reason, it is always advisable to exchange some money before you set off, or at least withdraw money on your debit card or convert some cash when you arrive.
You will still need cash in most cases to pay for things like taxis or public transport. On the other hand, make sure that you don't end up leaving the currency conversion too late - converting money in places like airports is usually extremely overpriced.
Whether you want to use either a debit or credit card abroad, it is always advisable to alert the provider first. If you do not, they may automatically block your card when they detect it being used abroad. This is done in case the card has been stolen and is being used fraudulently.
To prevent this from happening, and to help ensure that your money and purchases are protected as they would be back home, notify your card issuer that you are going away before setting off.
When you go abroad, be sure to keep a note of the issuer's emergency contact number. You will need this in the event of the card getting lost or stolen, in which case you will need to cancel it as soon as possible.
In some places, certain retailers may offer to convert payments to your own currency on the spot. While this might seem convenient at the time, this is often little different from a scam. You will invariably end up getting an extremely poor exchange rate.
Instead, insist that everything be charged in the local currency, and let the card issuer handle the currency conversion itself.