A Guide To Using Your Credit Card On Holiday

By | October 5, 2011

Credit cards can be extremely useful items in many situations, including travelling abroad if you don’t want to carry around large sums of cash or travellers cheques. Many credit cards are recognised in a large number of international locations, and you could take advantage of exclusive benefits and discounts when paying for travel purchases with plastic.

If you’re planning on taking a credit card on holiday, it could be worth comparing different cards available on the market first, to find one that offers the best deals. Finding a card that does not penalise you for making transactions overseas could help you save money, especially if you’re planning on spending a longer time away from home.

You may also wish to check beforehand whether your hotel and nearby restaurants at your chosen destination will accept credit card transactions, as opposed to cash. If you’re dealing with a foreign currency, it can often be cheaper to make the transaction in the local currency rather than converting it to your own, due to fluctuating exchange rates. Gaining a rough idea of the current exchange rate could help you avoid spending too much.

Even if you’re staying in a high-class resort, keeping your card on your person or safely locked away at all times is crucial to avoiding theft, fraud and other issues. If you’re walking through crowded streets or marketplaces, petty theft can be even more of an issue, which is why you should never let your guard down. Using common sense and avoiding walking alone at night or down dark alleys could also keep you and your cards safer on your foreign holidays.

That’s not to say you should rely on your credit card all the time, as there may be certain situations where paying in cash is the only option – especially when shopping at local markets and eating at small restaurants. If you’re withdrawing cash at foreign ATMs, the rates may be higher when using your credit card than your bank debit card, and you could also save money by making fewer transactions of higher amounts than multiple, smaller transactions.

However, you may be able to avoid withdrawal fees entirely when applying for a pre-paid foreign exchange platinum card or other type of credit card that includes a fixed amount of foreign currency at a more reasonable exchange rate than you would receive at banks or the bureau de change.