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Best Credit Cards for Foreign Travel

December 3, 2014 by

Credit Cards

If you’re planning a trip overseas, you should look for credit cards with a chip rather than a magnetic strip. Along with that, the ideal card won’t charge an annual fee and won’t charge for foreign transactions. Only a few cards offer all three making them the best credit cards for foreign travel.

Benefit of Chip vs. Magnetic Strip

Outside the U.S. most countries have already adopted chip technology for credit cards because it’s more secure than the magnetic strip. The chip makes the credit cards exceptionally difficult to counterfeit or copy.

When you’re overseas, all terminals are said to be able to read magnetic strips, but the anecdotal buzz from returning travelers suggests that consumers from the U.S. with magstrip cards are finding their cards are not working everywhere. When that happens, visitors are forced to hit the cash machines more often with the additional expense of service fees which add up quickly.

Credit Card

Finding a Chip Card in the U.S.

While the U.S. market is slower to convert to chip credit cards, some banks will reissue an existing card with a chip if a customer asks for it.

Before you ask, though, it’s important to note there are two types of chip cards. One requires a personal identification number (PIN) to identify the holder and the other requires a signature.

Chip and PIN Cards

Outside the U.S., Chip and PIN cards are somewhat common, while the chip and signature cards are the more popular trend. Most overseas terminals accept either, but when using a card in an unmanned kiosk you might find they only accept cards that don’t require a PIN.

Another detriment to a card that requires a PIN is that you have to remember the PIN. If you forget it while you are overseas, you usually won’t be issued a new one over the phone or Internet. Instead, it will be mailed to your home.

Transaction Fees

Most U.S. banks charge a foreign transaction fee every time you use your credit, debit or ATM card outside the United States. This is usually around 3 percent, so if you spend $6,000 while you’re abroad, fees will add up to almost $200. So ideally, the chip card you choose should be one with no foreign transaction fee.

No matter which card you choose to travel with, before you head abroad, be sure to notify the issuer of the credit, debit and ATM cards of your travel plans. That way they’ll know it’s you and not a thief making purchases.

Photo credits: wikimedia.org, wikimedia.org



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