How To Pay For Stuff Overseas (its not traveler’s checks!!)

Credit Cards. They are the only way to go. They offer protection for purchases and from fraud, provide you with a way to get cash, and typically get better exchange rates than the exchange offices ever give. Unfortunately, they also charge fees, in some cases lots of them. In addition to the ATM fee for any cash advance (and interest beginning from withdrawal) almost all cards will charge a foreign transaction fee ranging from 1% to 3% of your purchase.  It pays to shop around when selecting your credit card for travel.

While Capital One is the only card that charges 0% transaction fees, we opt to use our local credit union issued credit card for international travel for a couple of reasons. One is that we like the security of being able to call a person who has worked with us face to face should we run into a problem. Another is that my particular credit union (this is not true for all) does not charge interest on cash advances unless you carry a balance (so if you pay off the card every month, you only pay the ATM and 1% fees, not interest on the money you withdrew).  On this last trip we learned our lesson in terms of credit card use.  For nearly everything we used the CU Visa but for a small number of purchases we use our Chase Visa (we needed more cash than was allowed from each account in one day, so used both cards); the fees on the CU Visa totaled $32 while the fees for significantly less charging on the Chase card totaled over $100.

In addition to (mostly) using a CU card, there are some other precautions we take when traveling overseas:

  • call/go online to confirm travel dates and destinations
  • keep credit card phone numbers with our itinerary papers (they live in a plastic folder in my luggage; yes, I travel with a plastic folder)
  • record card numbers and phone numbers to leave with a trusted individual at home. Typically this is my parents. Our rationale is that when we get mugged/pickpocketed/swindeled, we can more easily report this to a credit card company if we have all the information. We also leave them our passport numbers, flight times/numbers, and hotel phone numbers. You only need to sit alone in one foreign airport for 14 hours, overnight, with no way to reach anyone locally and no knowledge of your hotel address to determine that this is not overkill.
  • Never carry all the credit cards at once–we have four between us, with different numbers, we’re good if we lose one.

And why  not traveler’s checks? You will get a shitty rate. Hotels (especially small ones) don’t want deal with them when they can just make you go get cash. They aren’t that secure (unless you are super organized). And finally, who wants to waste time finding a bank during opening hours (especially in Italy, where opening hours are, lets say, flexible) to wait in line and change money?


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