Credit Card Lowdown: Lowdown on Credit Card Use Abroad

Comments

Lowdown on Credit Card Use Abroad

You bought a bagpipe in your clan colors on your Scotland holiday and paid by credit card. Was that a wise move? If the bagpipe you bought were a good one - you probably are right to use your credit card. But, cheap ones that have just home décor value would have been better purchased cash down.

I'd suggest all big purchases use your plastic it’s easier and the extra charge is probably worth all the trouble of carrying large amounts of cash in hand. However, for the rest of your purchases carry foreign currency. Credit Card companies are now charging for these transactions and you may have unknowingly forked out an extra 3%.

Foreign transaction charge, when it began, ranged around 1% of your bill and you did not actually see it, as it used to be included in the final amount charged to you. But, several financially meticulous travelers saw through this and raised questions. A slew of court cases began when travelers realized that their credit card company had charged these foreign transactions without prior disclosure.

Why are we being charged? Credit card companies charge us nowadays because the foreign merchants and their banks decided to do the currency exchange for you themselves and your credit card company and bank were given the already exchanged rate. So, this led to our home companies losing out on this money. To augment this loss, now credit card companies are out in the open with their foreign transaction charge of 3 per cent or so. Hey! Your highland bus trip bill just added a 3% to its original price.

Credit cards still gives you the best exchange rate when compared with ATM withdrawal or travelers’ checks or other ways all put together as they get great wholesale exchange deals. But, don't hesitate to march up to your credit card company and find out all the details of foreign charges before your next trip abroad.

--
Did you enjoy this post?

March 2, 2006 in Tips & Advice | Permalink