If you haven't traveled internationally before, you might be operating under the assumption that using your credit card is no different than using it at Wal-Mart. Unfortunately this isn't the case; using your credit card in another country can lead to high fees for currency conversion or even a frozen account if your card issuer suspects fraud.
When I recently found out that my sister was planning a winter trip to Africa I took it as my brotherly duty to find the best credit card for her. As luck would have it, Jim from Blueprint for Financial Prosperity, is also traveling abroad soon, and he took an in depth look at the currency conversion fees for popular credit cards in order to find the best credit card to use internationally.
There are three fees that go into determining the total cost of any international transaction, which can add up to 8% to a purchase price. These fees include a foreign currency conversion fee, a network fee and a dynamic currency conversion fee. The majority of cards charge at least one of these fees for any international purchase, even if a bill is paid in full before the end of the billing cycle.
Based on the detailed fee breakdown, I am recommending a Capital One card to my sister for her upcoming trip. While there are other cards, I ended up selecting it for the same reasons as Jim; the abundance of locations that accept MasterCard or Visa, and the 0% currency conversion fees for international purchases make it very traveler friendly.
I'm sure this card will prove much more useful my sister than the one issued by her local bank. Hopefully the local vendors don't forget to run the transactions through in local currency rather than dollars; I don't think she can afford a pizza bill for $2,500!
Do you have any credit card tips for international travelers? Please share them in the comments below.
via My Two Dollars
Finding the best credit card for traveling abroad