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Using Credit Cards Abroad– Avoid Nasty Charges and a Shock on Your Return!

Personal_Finance / Credit Cards & Scoring Apr 07, 2008 - 11:44 AM GMT

By: Mike_Gracia


Having a credit or debit card while on holiday can give you peace of mind, knowing that you are not having to carry large sums of money all the time.

But what about the costs of using your credit cards abroad ? If you do not use your card wisely, you could come home to a shock that turns the normal post holiday blues into a financial nightmare!

We have put together a small guide to help you void any nasty surprises when your card bill arrives.

The main point here is that with some credit cards, not all of the fee's are made explicit when you register for the card, some are more ingrained. – however, if you're strategic in the use of your purchase credit card , or change to one of the cards that don't have those 'hidden catches' then a large percentage of these fee's can be avoided!

Here is a brief run down of some of the possible charges.

Loading Fees

Initially your credit card exchange rate may look pretty competitive. Unfortunately however, you may have to pay something called the “exchange rate loading fee” – which is usually in the form of a percentage, typically around 2.75%. Once the fee is added, your overall credit card exchange rate becomes rather uncompetitive!

One point worth noting here is that the loading fees may not actually appear on your statement at all; necessitating a thorough reading of your cards t+c's to find out about them.

These loading fees can be avoided by applying for one of the cards that don't use them. Try looking through a comparison site, like

Cash Withdrawals

It is a wise move to avoid using your credit card for withdrawals whilst abroad!

Such use will incur a huge amount of interest on your card, and these interest payments often apply straight away. If you really want to pay lots more interest than you need to, then using your credit card for cash withdrawals whilst abroad is for you!

You should be aware that cash withdrawals are the last thing to be cleared from your credit card balance, meaning the large interest rate be there for longer, and will cost you more and more unless you pay the balance in full.

Spending Fees

Spending fees are applicable exclusively to debit cards; this is a flat fee that some (but not all) banks put on foreign transactions. These fees tend to work out at around £1.75 per transaction.

Remember that not all banks chare these fees, so consider shopping around before going on long breaks, or if you are taking multiple trips.

This all sounds like hassle! – should I just not take my card?

Probably not a good idea! Your credit card can get you out of many a sticky situation (such as a vehicle breakdown, medical emergency etc) – not to mention the peace of mind that you gain from not having a large sum of money on you!

Best just to shop around, and wise up about the fees that can be applied when using credit cards abroad.

Another point is that you really should inform your bank that you are planning a trip abroad, and ask them not to block your credit card when they see foreign use on your account. Remember to also take your banks contact details with you, they may have a different phone number to use when calling from abroad, so ask about this also.

Anything Else?

A final point is that if/when you do make a purchase on your card, pay in the local currency. This should be displayed on the card machine, just before you type in your PIN. Always remember to cover the keypad when typing in your PIN.

By Mike Gracia

    © 2007-2008 Copyright Mike Gracia / - All Rights Reserved
    Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

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