What is the best credit card to have for international travel? A comparison of the best travel credit cards should include not only a look at the fees for transactions, but also the surcharges for currency conversion. Then there is the question of credit versus debit: Which card is the better choice for overseas travel?
Best international travel credit cards
Many credit card companies have heard the call from consumers for lower fees. Capital One has long been ahead of the pack in offering no foreign transaction fees. USAA tacks on a one percent surcharge, while most other cards hit the user with fees between 2 and 3 percent. HSBC and Chase might lower that fee for a few "elite" customers. Some cards through credit unions charge only the standard Visa charge, but the more generous ones go the Capital One route and avoid charges altogether.
What about using a debit card to avoid the hefty fees? You could find yourself in even deeper financial waters. Aggressive fraud detection, though meant to protect card holders, can lead to problems for travelers if their debit cards are frozen for suspicious activity. Remedy this problem by alerting your bank to the fact that you will be traveling overseas, and you can probably avoid a red flag on your account.
Another issue to consider is the currency conversion surcharge levied by many banks when you use your debit or credit card to draw local currency from an ATM. According to a USA Today report, Bank of America leads the pack in terms of savings by charging no transaction fee and no surcharge at certain ATMs around the world. JP Morgan Chase sits on the other side of the spectrum with a $3 transaction fee and 3 percent conversion surcharge.
Tips for taking credit cards overseas
As you carry your wallet across the pond, remember these five tips for savvy international shopping:
- Use your credit card for larger purchases and your debit card for smaller purchases.
- Always notify your bank and your credit card company before you take an overseas trip.
- Carry the phone numbers of your bank when you go overseas. In the event of a stolen wallet or lost card, call immediately to report the issue.
- Calculate your fees. If a credit card offers no transaction fees but has a high annual fee, you might actually save money by going with a card that offers no annual fee but smaller transaction and conversion fees.
- Some European countries are now requiring an embedded chip and pin number to reduce fraud. Try swiping your card anyway; sometimes it works.
Finally, remember that even the best credit card can run into the occasional snag. That's why it is important to always carry cash in your wallet, just in case.