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By Pam Leibfried and Katie Pins
If you’ll be overseas and want some tips on credit and debit card usage, read on! You can save time, headaches and money with these tips for reducing transaction hassles and fees when you are using credit and debit cards while traveling internationally.
To avoid triggering a fraud alert, let your credit union or other card issuer know where you will be traveling and how long you’ll be there. The last thing you want to worry about on your trip is having a legitimate travel transaction declined because your card issuer thinks someone stole your card.
Even if you don’t think you’ll use a card, let your card issuer know you’ll be traveling. This way, if you run into a financial emergency, you have another way to pay.
How to set up a travel notification:
Most card companies, banks and credit unions make it super simple to let them know when you’re using a debit card internationally or a credit card overseas. Just log in to your online banking or mobile banking app and fill out the short form. You will let them know where you will be going and when.
If you prefer, you can also call your card issuer to let them know about your travels.
Alliant members: You can log in to Alliant online banking or the Alliant mobile app to notify us of your travel plans. Or, call 866-444-8529 if you plan on traveling with your Alliant Visa credit card or 800-328-1935 if you plan on traveling with your Alliant Visa debit card.
When you make a purchase at a foreign retailer or restaurant, they will sometimes give you the option to put the charge through in U.S. dollars instead of in the local currency. This practice is called dynamic currency conversion (DCC) or cardholder preferred currency.
Although DCC may seem like a good option because you won’t have to calculate the currency conversion, there is a downside. Merchants can set their own conversion exchange rate when you opt for DCC. And when they set their own rate, that rate often includes a hefty mark-up to your total bill.
Some merchants charge as much as 7% for this conversion service, and you’ll still pay any applicable Visa or MasterCard foreign transaction fees on top of that merchant markup.
How to avoid foreign conversion fees when using cards overseas:
If a merchant asks if you want your transaction to be processed in U.S. dollars, you should decline, then ask them to process the transaction in their local currency. If they processed your transaction in U.S. dollars without asking, you can ask them to ring it up again in the local currency. By processing the charge in the local currency, you’re assured of an accurate currency conversion rate.1
When using an ATM in a foreign country, you may be asked if you want a guaranteed conversion rate or if you want to be charged in U.S. dollars. Select the option to proceed with the ATM transaction without a conversion (i.e. in euros or other local currency).
Using a card for purchases is one of the best ways to spend money abroad. However, you need to be aware of certain transaction fees.
Visa charges a 2% International Service Assessment (ISA) fee on transactions made while traveling abroad. But many banks and credit unions charge additional fees on top of the ISA fee. These bank fees can range from 2%–3% on every transaction, and that can really add up.
If you spend $5,000 on a European trip, a 3% fee adds $150 to your costs! However, there are ways to avoid or limit these fees.
How to limit foreign transaction fees:
Compare the cards you already have in your wallet. Fee information is available on your card issuer’s site. You can also call and talk to a rep who can walk you through their fee structure.
Once you know how your foreign transaction fees are structured, you can pick a primary card for your trip! There are many credit cards that offer limited or no foreign transaction fees. If you don’t have a card with no fee, you could shop around for one that is right for you.
For example, Alliant’s Visa Platinum and Visa Platinum Rewards credit cards and our Visa debit cards do not add any additional transaction fees on top of the Visa ISA fee, but the Visa ISA fee is added to each international transaction. The Visa ISA fee is not added to international transactions made with an Alliant Visa Signature card.
Although the vast majority of travelers don’t have any issues with theft or pickpockets, it never hurts to be prepared.
Before your trip, find out if there is a special contact number for calling your card company from outside the U.S. Keep that contact number(s) – along with a copy of your passport and the cards you’ve brought with you on your trip – in a secure place separate from your wallet. That way, if your wallet or purse is stolen, you’ll have the information you need to report the theft quickly.
When you photocopy your cards, make two copies and give the extra set to a trusted friend or family member at home. If you can’t contact your card issuer yourself, it gives you the option of contacting someone stateside who can call them for you.
Alliant members: To call Alliant from abroad, use our direct dial number (not our toll-free line) at 1-773-462-2000. To call Visa directly, consult their country-by-country list of Visa toll-free customer assistance numbers.
You’ll want to avoid using cash exchanges abroad because of the fees and exchange rate. Instead, use an ATM to get the cash you need internationally.
The Visa global ATM locator can help you find Visa-compatible ATMs at your destination. You can filter the results to show airport locations, so you can get local currency right away to pay for your cab from the airport. And you can send your search results to your phone so you’ll have them handy as you travel.
Keep in mind that many banks charge a fee for using their ATM if you’re not a customer. If your checking account gives you ATM rebates, this fee could be covered. If you don’t get ATM rebates, then limit the amount of withdrawals you make during your trip.
Alliant members: If the owner of any ATM you use to withdraw money from your Alliant checking account charges you a fee, Alliant will rebate you up to $20 per month.19 And that includes ATMs abroad!
1. Please note that the exchange rate you are charged for foreign local-currency purchases made with your Alliant Visa credit or debit card is the exchange rate on the day that the charge posts, which is 3-5 days after the actual purchase.
Pam Leibfried is a marketing content specialist whose love of words led to a writing and editing career. After a brief stint teaching English, she transitioned to corporate communications and spent 20 years at The Nielsen Company before joining Alliant’s content development team. Early in her work life, Pam’s friend Matt explained the benefits of a 401(k) and her dad encouraged her to start a Roth IRA. Their good counsel prompted her to prioritize retirement savings, which just might enable her to retire early so she can read more and live out the slogan on her fave T-shirt: “I have a retirement plan: I plan on quilting.”
Katie Pins is a marketer fascinated with finance. Whether the topic is about the psychology of money, investment strategies or simply how to spend better, Katie enjoys diving in and sharing all the details with family, friends and Money Mentor readers. Money management needs to be simplified and Katie hopes she accomplishes that for our readers. The saying goes, "Knowledge is Power", and she hopes you feel empowered after reading Money Mentor.