{"id":9900,"date":"2022-08-23T06:52:37","date_gmt":"2022-08-23T13:52:37","guid":{"rendered":"https:\/\/www.nerdwallet.com\/ca\/?page_id=9900"},"modified":"2024-04-16T02:32:28","modified_gmt":"2024-04-16T09:32:28","slug":"how-international-credit-card-works","status":"publish","type":"page","link":"https:\/\/www.nerdwallet.com\/ca\/credit-cards\/how-international-credit-card-works","title":{"rendered":"How an International Credit Card Works"},"content":{"rendered":"\n

If you like to travel, frequently make purchases in foreign currencies, are a newcomer to Canada or are studying abroad in Canada, an international credit card may be a beneficial financial tool to have in your wallet.<\/p>\n\n\n\n

Not only could an international credit card help you more efficiently manage your finances, but it may also come with perks that will save you money while shopping and travelling.<\/p>\n\n\n\n

\u00bb BROWSE:<\/strong> Canada’s best travel credit cards<\/a><\/p>\n\n\n\n

What is an international credit card?<\/h2>\n\n\n\n

Like regular credit cards<\/a>, international credit cards are a form of revolving credit. You get a grace period during which you can make purchases. But when your statement is due, you must pay back the entire balance or you\u2019ll be charged interest.<\/p>\n\n\n\n

International credit cards are different from traditional credit cards because they\u2019re designed for people who travel regularly or make purchases in foreign currencies. Although most credit cards can be used in your home country and abroad, the perks you get with international credit cards can be handy for frequent travellers.<\/p>\n\n\n\n

Benefits of an international credit card<\/h3>\n\n\n\n

Since international credit cards are often designed for travel, the perks that come with them are geared toward  those who fly or stay in hotels frequently. However, not every card offers the same benefits, so you need to decide which perks are most important for your specific needs.<\/p>\n\n\n\n

No foreign transaction fees<\/h4>\n\n\n\n

When you make a transaction in a foreign currency, the charge posted on your statement is converted to Canadian dollars. The foreign currency conversion rate is set by a payment network, such as Visa, Mastercard or American Express, used by your card issuer<\/a>.<\/p>\n\n\n\n

In addition, many credit card issuers charge a separate foreign transaction fee<\/a> of 2.5% of the purchase amount. You may not notice this fee since it’s often rolled into the foreign currency exchange rate. However, some international credit card providers waive this fee, so you\u2019d only pay for the transaction at the exchange rate set at the time of purchase. This applies to purchases you make abroad and online in a foreign currency.<\/p>\n\n\n\n

Travel insurance<\/h4>\n\n\n\n

The cost of getting medical services abroad can be expensive. Fortunately, many international credit cards include travel medical insurance, which would cover you for trips to the doctor or emergency room. It would also provide coverage for major health problems, such as emergency surgery and overnight hospital stays.<\/p>\n\n\n\n

Some international credit cards also provide extended travel insurance<\/a>. This trip protection benefit would cover issues such as trip cancellation\/interruption, flight delay, delayed\/lost baggage, auto rental collision\/loss damage, hotel\/motel burglary insurance and more.<\/p>\n\n\n\n

As with any other insurance policy, you need to read the fine print to find out exactly what you\u2019re covered for and the amount of coverage for each perk. With travel medical insurance, you may get coverage just by being a cardholder. However, with extended travel insurance, you usually need to charge a percentage or all of your flights or hotels to your card for your policy to apply. Again, it\u2019s up to you to know the details of your credit card insurance policies and apply them accordingly.<\/p>\n\n\n\n

Airport lounge access<\/h4>\n\n\n\n

Another benefit that many international credit cards offer is access to airport lounges<\/a> around the world. Depending on your credit card, you get a set number of visits or unlimited access to select airport lounges.<\/p>\n\n\n\n

These lounges typically come with complimentary hot and cold food, drinks, comfortable seating and high-speed Wi-Fi. Some lounges even have beds, showers and massage rooms.<\/p>\n\n\n\n

Without this card benefit, a lounge membership usually starts at $99 USD a year and an individual visit can cost $32 USD, so this benefit can be quite valuable.<\/p>\n\n\n\n

Types of international credit cards<\/b><\/h2>\n\n\n\n

Although all international credit cards allow you to make purchases, it\u2019s important to be aware of the different types of international cards.<\/span><\/p>\n\n\n\n