Savvy travelers know that they should thoroughly reviewtheir cheap traveloptions such as cheap airplanetickets, discount hotel rooms, discounttravel deals, and cheap vacation packagesbefore finalizing any plans abroad. Unfortunately many people are less aware of credit or debit cardpitfalls that commonly are encountered overseas.
The following are the credit or debit card gotchas to beon the lookout for, according to Ed Perkins:
Mostcredit cards charge a foreign transaction fee that averages 3 percent. What many travelers are unaware of is thatthis fee is usually also charged even when transactions are processed overseasin U.S. dollars.
Usinga credit card is a terrible way to get cash. A recent survey of the top 100 credit cards found that taking a cashadvance results in a fee, typically around three to five percent with a $10minimum, plus an ATM charge unless you are using one from your own bank, as wellas a stiff interest rate with a median value of 24 percent even if your accountis fully paid. Never use a credit cardfor cash unless you have no alternative.
Creditcard rental car insurance usually does not cover holders completely. Often, though not always, when using a creditcard to reserve and pay for a rental, the credit card issuer provides secondarycollision coverage. Rental car coverageis universal with Visa and American Express but not with MasterCard andDiscover. MasterCard and Discover rentalcoverage depends on the issuing bank. Beaware that most credit cards do not extend car rental insurance to car rentalsmade overseas.
Overseasfees for using a credit card when paying often can be as much as two to fivepercent of the bill.
Withdrawalsfor Global ATM Alliance banks now incur a three percent exchange fee. In the past the Global ATM Alliance wasviewed as the ideal way to get foreign currency. By having a Bank of America checking orsavings account, you could use a debit card to withdraw local currency withneither an ATM nor a conversion fee from ATMs at affiliated banks at manycountries.
Airportno fee ATM gouging is largely a thing of the past at most internationalgateway airports. Foreign exchangecompanies such as Travelex have negotiated exclusive ATM arrangements with bighub airports and installed their own ATMs. While they typically advertise no fees, they usually provide lousyexchange rates, often as much as 10 percent worse than you would get with a bigbank ATM.
Non-chipcredit cards are increasingly not being accepted outside the U.S. This is particularly true of places such asgas stations and subways that do not have an attendant available.
Whilethe chip and sign credit cards can reduce some kinds of fraud, they are farfrom fraud proof. A large part of creditcard fraud originates with card not present transactions, such as those madeonline. If a thief can get your data,for example by hacking into a merchant account, the chip is of no help.
Also your personal information can bestolen by someone carrying the right hardware nearby without ever touching you,unless your credit cards are shielded by a credit card protector.