The Truth About Credit Cards.com

So you’re thinking about traveling abroad, but before you jump on that plane, there’s plenty of planning to do to ensure you have a safe and satisfying trip.

Amongst other things is financial planning, as foreign vacations can cost you and your family thousands of dollars, and a few right moves can save you hundreds.

One major financial issue always comes to mind, and that’s foreign currency conversion.

You may be thinking about getting Travelers’s cheques or planning your foreign exchange tactics well in advance of your trip.

But times have changed in the last ten years, as ATM, debit and check cards, and credit cards now appear more often than cash itself.

And nowadays you may find that many institutions won’t accept Traveler’s cheques, and as a result, American Express and Travelex now sell “traveler’s cheque cards” which work like temporary credit cards.

But how many people use those methods of payment these days? Not many. It’s really all about credit cards these days.

But that’s where things get a little bit tricky, as using your credit card abroad comes with foreign conversion fees and point-of-sale fees.

In fact, Visa and Mastercard charge 1% of the total purchase price on all foreign conversions, along with whatever the credit card issuer charges, which is typically another 2%, totaling 3% of the purchase price.

What a waste of money…so what do you do?

You could use cash everywhere you go, but how safe is that? And you’ll still need to deal with the foreign exchange rates, which don’t value U.S. dollars much these days.

Or you can settle for using your American Express card or Visa/Mastercard and get hit for 3% of each transaction and rationalize it as a convenience charge.

Oh yeah there’s one more option. Using your credit card and paying no fees.

The no fee option sounds good right? Believe it or not, two widely held credit card issuers allow you to use your credit card abroad without charging any associated foreign conversion fees.

Those two card issuers are Capital One and Discover, who charge nothing for credit card use abroad, so long as it’s for credit purchases, and not cash advances. But cash advances never really make a lot of sense.

So if you’re thinking about traveling abroad this summer, and using credit, consider grabbing a Discover card, which I favor over Capital One for a variety of reasons, mainly customer service and lack of frills and favorable terms on their cards.

Discover credit cards are currently accepted in Canada, Central America, Mexico, the Caribbean and China.

Take a look at the great benefits the Discover® More Card offers below: