4 Reasons You Should Always Use a Credit Card When Abroad

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  • Credit cards can offer you liability protection and travel insurance when traveling abroad.
  • Credit cards can offer better currency exchange rates as well as offer travel benefits and rewards.
  • Ensure that your credit card doesn’t charge international transaction fees. There are plenty of cards to choose from.

A credit card is the safest way to spend when traveling internationally.

Even in the face of high inflation and rising costs, Americans are spending big on travel. From January 2022 to June 2022, the biggest increase in spending was foreign travel by U.S. residents. Americans spent 90% more in June than they did in January. When traveling overseas, it is important to be vigilant of being robbed, scammed, or paying unnecessary fees. The best way to protect yourself, believe it or not, is by using your credit card.

Cash makes you a target

Carrying a large amount of cash when traveling abroad isn’t the best idea. Scammers are always looking to rob tourists, and carrying cash makes you a target. Exchanging your dollar into the local currency at a bank also means you are paying a fee. Depending on your bank, you will also pay an additional fee for taking money out of an ATM while in another country.

Credit card protections

Many credit cards offer purchase protections or travel coverage. They offer fraud protection as well as liability coverage. This means if someone uses your credit card fraudulently, you are not liable for the purchases you didn’t make. If someone steals your debit card, however, they can drain your bank account, and it could take months to get the money back.

If you lose your card or it is stolen, you can contact your bank to cancel it. Some credit cards like the Chase Sapphire Preferred® Card offer insurance that covers trip cancellations or interruptions, lost luggage, and more. If you rent a car with it, they also offer an auto rental collision damage waiver.

Credit cards offer better exchange rates

Many vendors take credit cards as a form of payment. Credit cards typically provide better exchange rates than using cash or an ATM machine. While some credit cards may charge an international transaction fee, there are plenty of cards available that do not charge one.

Some of the best credit cards that don’t charge international transactions fees are:

Credit cards offer travel benefits and rewards

In addition to protecting yourself by using credit cards while traveling internationally, you can also earn points or miles. Cards such as The Platinum Card® from American Express give you 5X Membership Rewards® Points (up to $500,000) for flights or hotels booked directly with the company or with American Express Travel. You can also receive up to $200 in statement credits per calendar year after you select a qualifying airline and incidental fees are charged by the airline to The Platinum Card® from American Express. Terms apply.

Some credit cards like the Chase Sapphire Reserve® give you access to over 1,300 airport lounges worldwide, membership to Priority Pass, and a credit every four years for Global Entry, NEXUS, or TSA PreCheck®. For certain American Express card holders, The Centurion® Network has expanded to include more than 40 Centurion Lounge and Studio locations worldwide. Select enrollment required.

If you are traveling overseas, a credit card offers flexibility and protection that cash cannot, and you can enjoy some of the perks of being a card holder. Make sure you double check to ensure your issuer doesn't charge an international transaction fee and you notify the company of the dates you are traveling. This way, the issuer won’t flag your international transactions as fraudulent. Travel with a backup payment option, and pay your card in full after your trip so you don’t pay interest fees.

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