How to avert a credit card nightmare on your foreign holiday
Vacations are here, and you are all set out for a holiday to a foreign destination and create unforgettable memories. You may have planned well and got a good deal from your travel agent for the trip.
In the excitement of the trip, do not forget to know some things about using credit cards at foreign locations.
While many tourists prefer to carry cash or prepaid Forex cards, many use international credit cards for overseas spending.
You need to remember to ensure you don't run into financial trouble for using your credit card at a foreign destination.
Carry widely accepted credit cards
Visa and Mastercard are worldwide recognized credit cards. American Express and RuPay also have a global presence but have yet to be as widely accepted. However, both credit card companies are trying to increase their overseas acceptance rates by collaborating with different banks and payment networks.
However, bringing a Visa or Mastercard as a backup still makes sense to avoid any inconvenience in a foreign land.
Inform your credit card issuer about your travel plans Before you embark on your vacation, you must notify your credit card issuer of your travel plans. This will help prevent your card from being blocked due to suspicious international transactions. Most Indian issuers, such as HDFC Bank, ICICI Bank, and SBI, have an easy online or mobile app feature to set up a travel alert. Alternatively, you can call their customer service hotline.
Check the foreign transaction fee of your card:
Most credit card issuers charge a foreign transaction fee for purchases made overseas. These fees typically range from 1% to 3% of the purchase price. They can cause you to pay significantly more than the listed price for anything you purchase abroad.
Before travelling, it is advisable to check your credit card terms & conditions to determine if they impose fees on foreign transactions.
If they do, applying for a credit card that does not charge foreign transaction fees makes sense.
Avoid billing in INR
Dynamic currency conversion is a credit card feature that enables you to purchase in a foreign country and get billed in rupees. This conversion is carried out at the merchant, allowing you to see the exact cost of items in your home currency, regardless of location.
While this may seem appealing, unfortunately, the exchange rate for dynamic currency conversion typically works out unfavourably for credit card users.
If a foreign merchant offers you the choice of paying in rupee or local currency, it is generally more economical to choose the local currency.
Take advantage of credit card rewards
You should review the travel benefits of each credit card to make the most of them while travelling. This will help you choose the card that offers the maximum benefits for your trip, such as earning extra points for dining or international spending.
Another way to earn maximum rewards is to book flights and hotels through the credit card issuer's rewards portal. It will allow you to use your rewards points to pay for your travel.
Many credit cards also provide access to airport lounges through programmes like Priority Pass, which offers a range of complimentary facilities like food, drinks, and spa sessions. This makes it an excellent option for long international journeys.
Manage your credit card's international spending limit
Despite taking measures to prevent overspending or misuse of your credit card, situations may still arise that are beyond your control.
To avoid such scenarios, managing your credit card's international spending limit is advisable according to your needs. This can be done by activating, checking, increasing, decreasing, or deactivating your international spending limit through various methods such as internet banking, mobile app, online credit card account, or contacting customer service. By doing so, you can ensure that you stay within your budget and prevent any potential misuse of the card.
Use your credit card for major expenses
While having local currency on hand for small purchases is essential, use your credit card for significant expenses like hotel bookings and restaurant bills. This ensures you can track your spending more efficiently and benefit from rewards or cashback opportunities. Plus, using your credit card provides better protection against fraud and unauthorized charges than using cash.
Keep a record of your credit card information
Before leaving for your trip, make a note of your credit card numbers, expiry dates, and the customer service phone numbers for each card. Store this information in a safe place, separate from your physical cards. If your cards are lost or stolen, having this information will make it easier to report the issue and request replacements.
Carry a backup credit card
When travelling overseas, carrying a backup credit card is always wise. This ensures you have a financial safety net in case your primary card is lost, stolen, or blocked. Moreover, having an extra card can be helpful in situations where your primary card is not accepted, or there are issues with the payment network.
Be cautious with public Wi-Fi
While travelling, you may be tempted to use public Wi-Fi networks to make online transactions. However, these networks can be insecure and susceptible to hacking. Instead, use your mobile data or wait until you can access a secure Wi-Fi connection to avoid exposing your sensitive financial information to potential threats.
Following these smart credit card hacks can make your overseas vacations more enjoyable and financially secure.
With careful planning and attention to detail, you can maximize your credit card's benefits, minimize fees, and protect yourself from potential fraud or unauthorized charges.
Go explore the world with confidence and peace of mind, knowing you've taken the necessary precautions to ensure a smooth and enjoyable journey.
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