Using Credit Cards Overseas

by Nancy Bestor

We’ve talked before in our newsletter about the best (and cheapest) ways to handle money abroad, but as things are always changing, it doesn’t hurt to revisit the topic every now and again. We never take traveler’s checks and rarely do we acquire foreign currency before leaving the U.S. Our trip this past summer to France and Switzerland was no exception. We took our ATM card and two credit cards, and made sure that each organization noted in our accounts that we would be traveling abroad. As soon as we arrived in Switzerland, we went to an ATM machine in the Zurich train station and withdrew Swiss francs. Then, as soon as we crossed the border to France, we did the same to get euros. Because there is both a transaction fee and a percentage fee when withdrawing in a foreign country, we always take out as much money as we are allowed in one transaction.

Hands down, the cheapest way to make purchases when abroad is with a Capitol One Visa Card, which does not charge a foreign transaction fee. Let me repeat, Capitol One Visa DOES NOT CHARGE A FOREIGN TRANSACTION FEE! To my knowledge, they are the only credit card that does not charge this fee. Most credit cards charge anywhere from 2-3% per transaction. Obviously not every restaurant, hotel or store takes credit cards, so we always have a backup plan, but using this card has saved us several hundred dollars in fees over the years.

Taking two credit cards and one ATM card ensures that we always have a back up. The few times our primary credit card has not worked, we’ve always been able to use our secondary credit card or find a nearby ATM for cash.

A recent article in the New York Times offers more information on this topic.