Travelling abroad and want to use a credit card? Here's what you should know

Credit cards are globally accepted, making it easy to pay conveniently on your travels abroad. You can transact at multiple locations using a credit card with a single swipe/ tap. Credit cards are preferred over cash when you are on an international trip for several reasons, including:

· Credit cards are secured against possible thefts. Even if the card is lost, you can block it immediately to avoid misuse.

· The card is thin and convenient to carry in your wallet compared to thick wads of cash.

· You can withdraw cash with a credit card against your credit limit in emergencies.

· You will earn reward points on every spend.

· You can also avail of various merchant discounts, deals, and offers while travelling. 

Moreover, you could also get attractive discounts on travel and hotel bookings by using a travel-centric credit card. Such cards often offer various privileges that include –

· Complimentary airport lounge access*

· Golf lessons*

· Access to complimentary memberships*

*It is best to understand the terms and conditions of your international card provider beforehand. 

While it is convenient using a credit card abroad, there are some important aspects that you need to bear in mind.

Things to keep in mind when you use a credit card abroad
 

· Choice of card
 

Choose the right international card; it is important for two main reasons.
- One, the card should be accepted in the country you are travelling to.
- Two, the card should offer the maximum possible benefits on the trip, so you can save a little as you spend.

Not all credit cards might be accepted abroad. Even if you have an international card, check the countries where it can be used.

· Informing the issuer
 

Credit card issuers stay vigilant against suspected misuse of the card. If your card is swiped internationally, the issuer might suspect an issue and decline the transaction. Thus, informing your credit card issuer when travelling abroad is always better.

You can inform the credit card issuer in advance if you travel abroad frequently. You don't need to keep them informed every time you travel.

· Spending limit
 

Each credit card has a maximum credit limit - the lower the limit, the more restricted the card will prove. Since international travel and related expenses can be high, choose a card with a higher spending limit if you plan to use it often.

You can carry multiple credit cards to increase your spending limit. When each card has a finite limit, with multiple cards, the aggregate spending limit at your disposal would be higher.

· Forex markup fee
 

Credit card companies often charge an additional fee for international transactions - the forex markup fee. Check credit card foreign transaction fees beforehand, so you can choose one that has a lower or no foreign transaction fee to avoid unnecessary expenses.

For instance, FIRST WOW! Credit Card has no forex markup fee to help you save on your international transactions.

For online bookings through international websites, a forex markup fee is applicable since you pay in international currency. So, book your travel through domestic portals to save on that cost.

· Currency conversion fee
 

Dynamic Currency Conversion (DCC) is a feature that allows you to convert the value of your transactions into Indian Rupees (INR). You can check the actual transaction value through DCC to understand your expenses.

DCC is available at several merchants and ATMs internationally. However, it would be best if you avoided it because it involves a currency conversion fee. The merchant charges an additional fee for converting your transaction into INR. This is added to your credit card bill.

Know the exchange rate of the country you are travelling to, so instead of paying the currency conversion fee, do the calculations yourself to keep track of expenses.

· Security 
 

When travelling internationally, you should be extremely careful of possible credit card fraud. Try and keep your card in a safe place. Do not share the number, CVV or PIN with anyone. Always conduct transactions in your presence to avoid skimming or cloning attempts.

Nowadays, credit cards come with secured EMV chips which are impossible to duplicate. Opt for a chip-enabled credit card for maximum security.

· Cash advance charges
 

While credit cards allow you to withdraw funds from an international ATM, they can attract additional charges. The charge can be levied as a percentage of the amount withdrawn or as a flat fee. It is recommended you avoid ATM withdrawals using a credit card.

However, in case of an emergency, it can come in handy. But since cards are accepted almost everywhere, it might be better to use a credit card directly instead of using it to withdraw cash.

· Benefits offered
 

A good credit card comes with a range of rewards, discounts, and offers on travel spending. Check all benefits and choose a card with the maximum offers.

For instance, IDFC FIRST Bank Credit Cards have a unique TravelVerse Program that allows attractive offers on trip and hotel bookings. These include –

Compare the different credit cards to check their travel benefits. Choose a card with the best reward program that offers discounts and deals on your international spending.

The bottom line
 

If you have an existing credit card, check the factors mentioned above and assess whether the card would be suitable for international spending. If not, look for one which has the lowest fee structure and offers the maximum rewards. This would help you make the most of your international trip without worrying about the credit card's international transaction charges.

Use a credit card wisely, find the best way to minimise costs and maximise potential benefits to enjoy your travels.

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.