If you are traveling abroad for a vacation, business trip or studies, be sure to familiarize yourself with the benefits and drawbacks of using a credit card. Most merchants in the world accept local currencies as evidence for a transaction. However, it is not advisable to finance your whole trip with paper money because it can easily get lost or stolen. Currency also loses value once you transfer it from one currency to another. Most travelers opt to taking their credit cards with them. Relying on plastic cards has its own advantages and disadvantages. Below are the pros and cons of using a credit card abroad.
The Disadvantages of Credit Cards When Traveling.
Most merchants accept credit cards but they only take chip cards called EMV. At times you may not be able to buy anything using your credit card.Those EMVs are issued by local banks which can also be another issue. Some hotels and stores don’t take credit cards so you will need to have cash at all times.
Credit card transactions require national ID verification. This implies that you have to move around with your ID. It is a good idea but in case you forget you cannot access any transaction.
Sometimes credit cards carry international charges. To avoid these charges you can shop around to get the best offers. With mobile apps available it is easier to check.
The Advantages of Credit Cards When Traveling.
Fraud Protection. Most card issuing banks monitor the cards to reduce losses cause by fraud activities. If any suspicious activity is noted on your card the account is suspended. To avoid this you should notify your bank of any foreign travels in advance. Call them and let them know all the places you intend to visit. The last thing you want is for your card to stop working. Some companies like American Express do not need to be notified!
Free Travel assistance and customer service. A travel assistance program consists of damage protection, travel accident insurance and purchase protection. Services vary from one company to another and it is crucial that you learn of what services your card offers before you leave the country. You should store the number separately so that you can call the number once the card is lost or stolen.
Convenience. Plastic cards are more convenient than cash. You don’t have to change currencies as often .Credit cards are ideal for flights and hotels which are large bookings.
Acceptance. Some cards are accepted widely more than others. Shop around for a card that is accepted widely by most local merchants.
Credit cards provide better exchange rates compared to ATM machines and currency exchange rates.
Depending on your credit card issuer, your card purchases might qualify for insurance. This covers travel delays and lost luggage during the time of travel.