Clay Jarvis
Barry Choi
Beth Buczynski
Using a credit card is one of the best ways to manage your money when overseas. You may still need to get some of the local currency, but charging most of your purchases will help you carry less cash.
No matter what bank or credit card provider you deal with, using a credit card internationally should, in most cases, be no different from using one at home. But there are a few tips and tricks to consider, both before you depart and while you’re away, to help you save money while shopping abroad.
What to do before your trip
In addition to deciding which credit card will be making the journey with you, there are a few other steps to take to ensure your credit card transactions don’t cause any unnecessary headaches.
Contact your bank
Although most credit cards have security features in place to spot and prevent potential credit card fraud, you may want to call your issuer in advance to let them know about your travel plans. Charging something to your card halfway around the world from where you live might look suspicious, and that may trigger an automatic block that prevents you from using your card. Putting a note on your account will ensure that doesn’t happen.
Optimize — and remember — your PIN
If your credit card is secured with a PIN, make sure it is only four digits, as many terminals outside of Canada don’t accept longer PINs. Don’t worry if a merchant doesn’t have a tap or an insert option available. You can still swipe your card to make purchases.
If you’re not in the habit of using your card in person and entering your PIN, be sure you commit it to memory before you hit the road.
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Bring backup payment methods
For some added security, you may want to bring more than one credit card whenever you travel. This means you’ll have a backup payment option in case your primary card doesn’t work or gets lost.
Having some money in your pocket is also advisable, especially if you’re travelling to remote areas where electronic payments might be less common. A debit card, although it might cost you in fees, is worth bringing in case you absolutely need to hit an ATM to get your hands on some cash.
Consider a credit card with no foreign transaction fees
Most credit cards in Canada charge a foreign transaction fee of 2.5% on any purchase that’s not in Canadian dollars. While the fee may seem low, it adds up over time — especially on a vacation where you might make several transactions each day.
Fortunately, there are a few credit cards without foreign transaction fees. Research and apply for one of these cards well in advance of your trip, and you’ll be able to use your credit card normally and pay only the exchange rate on your purchases, no extra fees.
» MORE: Should I get a travel card?
Watch out for dynamic currency conversion
Converting between currencies in your head can be a bit complicated. To make things easier for you, some merchants allow you to choose whether to pay in the local currency or your home currency to make things easier for you. This practice is known as dynamic currency conversion, and it shows you exactly how much you’ll be charged in Canadian dollars.
It may be tempting to select CAD when paying with your credit card, but the exchange rate is unlikely to work in your favour because it typically includes additional fees for the convenience of seeing your total in CAD.
If you choose to pay in the local currency, you’re paying the rate set by Visa, Mastercard, or American Express. This is likely much closer to the regular exchange rate. Either way, you’ll still pay a foreign transaction fee unless you have a credit card that doesn’t charge one.
Check your credit card statements when you get home
You should always review your monthly credit card statements, but doing so after you travel is vital. Cross-reference the charges with what you purchased and double-check to ensure that the amounts shown are correct. If there’s a transaction you don’t recognize, you may need to open a fraud investigation.
Using your credit card overseas doesn’t need to be complicated, and it shouldn’t be minimize your fees and security risks. Opting for a credit card that offers travel perks like insurance and lounge access can make using a credit card internationally even more rewarding.
Frequently asked questions about using credit cards overseas
Whether you’re a Visa, Mastercard or American Express credit card holder, you should be able to use your credit card internationally. It shouldn’t matter which bank you get your credit card from, either. If you have an RBC, CIBC, TD or BMO credit card, for example, it should enable you to make purchases when you’re overseas.
Different countries use different payment systems, so your debit card may not be an option when you’re shopping or trying to pay for a meal in some countries. In these cases, a credit card might be more reliable. Each one will likely charge you fees.
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