5 tips for using credit and debit cards abroad

Traveling abroad can pose many challenges, but using your credit cards and withdrawing cash from an ATM shouldn't be one of them. The last thing you want to happen is to be in a foreign country without access to your credit cards or accounts.

Preparing in advance and staying aware of the challenges you may encounter while traveling abroad, specifically when accessing your credit and accounts, will help you save time, money and headaches. Here are some tips on effectively preparing yourself for overseas credit and debit usage.

1. Let card issuers know you'll be traveling.

While it is good that our credit card issuers alert us when there is suspicious activity, it can be frustrating when you're traveling and that triggers a fraud alert. To avoid this, 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 just in case. 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 simple to notify them when you plan on using a credit or debit card internationally. Usually, you can do this by logging in to your online banking or mobile banking app and filling out a short form. You can inform the issuer about your travel destination and the dates you will be gone so they know any transactions made outside the country during that time are legitimate.

If you prefer, you can call your card issuer to let them know about your travels.

Alliant members: To notify us of your travel plans, log in to Alliant Online Banking or the Alliant mobile app. Alternatively, 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.

2. Conduct credit card transactions in local currency.

When you purchase at a foreign retailer or restaurant, you sometimes have the option to pay in U.S. dollars instead of 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 markup to your total bill.

Some merchants charge as much as 7% for this conversion service, and you'll still pay any applicable 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 to process your transaction in U.S. dollars, you should decline and 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 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).

3. Use a card that does not charge added fees.

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—sometimes referred to as a foreign transaction fee—on transactions made while traveling abroad. However, many banks and credit unions charge additional fees on top of the ISA fee. These bank fees can range from 2% to 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. Look up your current cards online and review their fee information, which should be available on your card issuers’ site(s). You can also call and talk to a rep who can walk you through their fee structure.

Once you know the structure of your cards’ foreign transaction fees, you can pick a primary card for your trip. Many credit cards offer limited or no foreign transaction fees. If you don't have a card with zero foreign transaction fees, you could shop around for one before you head off on your trip.

4. Be prepared in case of theft.

Although many travelers don't have any issues with theft or pickpockets, it never hurts to be prepared.

Before your trip, find out if there is an international contact number for calling your card company if something happens to your card outside the U.S. Keep that contact number – 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 someone steals your wallet or purse, 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, you can contact 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.

5. Locate Visa ATMs before your trip

Avoid using cash exchanges abroad because of the fees and exchange rates. 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 immediately. You can also send your search results to your phone so you'll have them handy as you travel.

Remember 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, limit the number 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!