Things to Know Before Using Credit Card for International Travel Expenses

When travelling internationally, using a credit card can be an effective and convenient way to manage expenses. However, it’s important to understand both the advantages and drawbacks to make the right choice.

The primary benefit of using a credit card abroad is the convenience. Most credit cards are widely accepted in international markets, allowing you to pay for everything from meals to transportation seamlessly. 

Additionally, some of the best credit cards for international travel offer attractive rewards for travel-related purchases, which can help offset some of the costs of your trip.

On the other hand, not all credit cards are equal when it comes to overseas usage. Some come with high foreign transaction fees, which can quickly add up and affect your travel budget. It's also important to note that exchange rates can fluctuate, which may impact the total cost of your purchases. To make the most of your credit card while travelling abroad, it's crucial to choose one that offers the right mix of low fees, rewards, and global acceptance.

Selecting a credit card for international travel involves considering several factors to ensure it meets your needs. 

Here are the key points to keep in mind when choosing the right card:

• Rewards and Benefits

Look for cards that offer travel-related rewards such as miles or points, which can be redeemed for flights, accommodation, or other travel expenses. If you travel frequently, a card with a strong rewards programme can provide great value over time.

• Foreign Transaction Fees

Pay attention to the fees associated with international purchases. Many cards charge foreign transaction fees, which can quickly add up. Opt for a credit card for overseas travel that either has no foreign transaction fees or offers a lower rate for these fees to help reduce additional costs during your trip.

• Card Acceptance

Ensure the card you choose is widely accepted at your destination. Visa and Mastercard are the most universally accepted networks globally, but some regions may have preferences for specific networks.

When using a credit card abroad, there are several key factors to keep in mind to ensure smooth transactions. These considerations can help you make informed decisions and avoid unexpected charges:

• Exchange Rates

Credit card issuers typically convert foreign currencies at the prevailing exchange rate, which can fluctuate. Some credit cards offer more favourable exchange rates, while others may apply a markup. Always check your card's policy before travelling.

• Foreign Transaction Fees

Many credit cards charge an additional foreign transaction fee of around 2-3% on purchases made abroad. This fee can quickly accumulate, especially if you're making large purchases. It's best to opt for a credit card for overseas travel that has low or no foreign transaction fees.

• Card Acceptance

Not all cards are accepted in every country. Visa and Mastercard are typically accepted worldwide, but some regions may favour specific card networks. Ensure your card will work at your destination by checking with your issuer beforehand.

• Security Features

When travelling abroad, security is paramount. Choose cards that offer chip-and-pin technology and fraud protection. Many cards also allow you to set up travel alerts, which can help prevent your card from being blocked for suspicious activity during your trip.

Here’s a table highlighting some of the best credit cards for international transactions, focusing on the key features that make them stand out for overseas travel:

Disclaimer: The details mentioned are subject to change as per the policies of the issuer. Check these before applying for a specific card.

Foreign transaction fees are an important factor to consider when using a credit card abroad. These fees are typically charged by credit card issuers for any purchases made in a foreign currency or outside your home country. On average, foreign transaction fees range from 2% to 3% of the total purchase amount.

These fees can accumulate quickly, especially if you make multiple transactions during your trip. For instance, a ₹10,000 purchase could result in an additional ₹300 to ₹500 in fees, depending on your card’s foreign transaction policy. This can significantly impact your overall travel budget if you're not mindful.

To avoid this, look for a credit card that either has no foreign transaction fees or offers a lower rate. Cards are designed to eliminate foreign exchange markup fees entirely, helping you save money while travelling internationally.

If you already own a card with foreign transaction fees, it’s wise to consider how often you’ll be using it abroad. In some cases, it might be beneficial to apply for a travel-specific credit card with better terms for international spending.

Credit cards offering flight-related benefits can add significant value to your travel experience. Many premium travel credit cards offer perks that go beyond the typical reward points, making them ideal for frequent flyers.

Some of the most common flight benefits include:

• Airport Lounge Access

Many credit cards provide complimentary access to both domestic and international airport lounges. For example, the SBI Elite Credit Card provides 6 free international lounge visits per year, which can enhance your travel experience by giving you a comfortable place to relax before flights.

• Priority Boarding

Some cards offer priority boarding privileges for select airlines, which allows you to board the plane before the general crowd. This can save time and help you settle in quicker, especially during busy travel seasons.

• Flight Discounts

Certain cards offer discounts or bonus points on flight bookings, helping you save on airfare while earning rewards that can be redeemed for future flights.

• Travel Insurance

Many travel credit cards also include travel insurance that covers trip delays, cancellations, and emergency medical costs. This added protection can provide peace of mind during your journey.

For frequent travellers, a credit card with flight benefits can significantly improve your experience by offering extra perks and savings.

Credit card fraud is a concern for many travellers, and it’s essential to take steps to protect yourself and your financial information when using a credit card abroad. 

Here are some key tips to reduce the risk of fraud during your international travels:

• Use Chip Cards

Always use a chip card when making purchases. Chip cards provide an added layer of security compared to magnetic stripe cards, as they generate a unique code for each transaction, making it harder for fraudsters to duplicate your card information.

• Enable Travel Alerts

Most credit card issuers allow you to set up travel alerts, which notify the issuer of your travel plans. This helps prevent your card from being flagged for unusual transactions in foreign countries. Be sure to notify your bank or card issuer of your travel dates and destinations in advance.

• Monitor Your Transactions

Regularly check your transaction history through online banking or your card issuer’s mobile app. If you notice any suspicious activity, contact your issuer immediately to report it and freeze your card if necessary.

• Avoid Public Wi-Fi for Payments

When making payments abroad, avoid using public Wi-Fi networks, as these are more vulnerable to cyber-attacks. If you must use a public network, consider using a Virtual Private Network (VPN) to encrypt your internet connection.

• Use Contactless Payment

Many modern credit cards now support contactless payments, which allow you to make secure transactions by simply tapping your card on a payment terminal. This eliminates the need to hand over your card, reducing the chances of fraud.

By following these simple steps, you can help ensure your credit card information remains secure while travelling internationally.

Managing your credit card payments while abroad is key to staying on top of your finances and avoiding unnecessary interest or late fees. 

Here are some tips to help you stay organised:

• Pay Bills on Time

Set up reminders to ensure your credit card payments are made on time, even while travelling. Missing a payment could result in late fees, interest charges, and a potential negative impact on your credit score. Using mobile banking or setting up automatic payments can make this process easier.

• Use Online Banking

Many credit card issuers offer online banking apps that allow you to manage your account and make payments easily while abroad. This is especially useful for staying on top of your spending and checking your balance during your trip.

• Avoid High Balances

Try to keep your credit card balance low to avoid interest charges. If you are travelling for an extended period, consider paying off your balance multiple times during the month to keep your debt-to-credit ratio healthy.

• Know the Payment Due Dates

International travel can sometimes lead to confusion regarding time zones and payment deadlines. Ensure you know the due dates for your payments, and if necessary, adjust the payment schedule to accommodate time zone differences.

• Currency Exchange Rates

Be aware that credit card issuers may apply different exchange rates to your purchases. Understanding how your credit card issuer converts foreign currencies into your home currency can help you estimate your final charges and avoid any surprises.