How to Use a Credit Card While Travelling Overseas

Using a credit card overseas is usually safe and convenient—but it can come with extra fees, limited acceptance in some places and a few logistical hiccups if you’re not prepared.

With the right card and a little planning, you can avoid unnecessary charges, reduce the risk of declined transactions and even earn rewards on your travel spending.

Here’s how to use a credit card abroad and what to watch out for before, during and after your trip.

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.

» MORE: Using a ZIP code when you frequently travel to the U.S.

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.