6 Pitfalls of Traveling With Credit Cards, and How to Manage Them

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6 Pitfalls of Traveling With Credit Cards, and How to Manage Them

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Credit cards can be your best friends when traveling; but there are a few pitfalls to manage. Here's what you need to know.

Why Credit Cards are Great Travel Companions

Here are seven reasons why credit cards are awesome for traveling:

    • They're necessary for making hotel and travel reservations
    • You save money on ATM withdrawal fees (thus reducing the security threat of carrying lots of cash)
    • You have a record of your expenses
    • Credit cards usually provide a reasonable foreign exchange rate
    • Many cards offer automatic travel/car rental insurance
    • With a rewards credit card, you can rack up frequent flyer miles
    • If somebody steals your debit card, they can drain your account; if somebody steals your credit card, you have recourse

Now that you know why credit cards can be great travel companions, here are the pitfalls and how to navigate them:

Pitfall #1: Flagged Activity/Blocked Purchases

Charging expenses to your credit card in foreign countries (online or in person) can send a red flag to the credit card company that maybe your card has been stolen or compromised. The purchase will be declined, and you'll need to call the credit card company to verify your personal information and location to unblock the card.

To avoid this pitfall at the outset, you can create travel alerts on your account (either online or by calling customer service). This reduces - but doesn't eliminate - your chance of having the card blocked when you use it abroad.

Pitfall #2: Card Theft/Identity Theft

If your credit card (or even just the number and your credentials) is stolen or lost, it will be canceled and reissued. Credit card companies have systems in place for replacing cards quickly, no matter where you are in the world. You'll need to communicate via phone, email, you might need to receive/send faxes, and you'll need an address to which the new card can be delivered.

This process is not fun! To avoid it, keep your credit card in a secure place, be judicious with your online use, and be wary of who you give your number to. Create an extra layer of online security with a VPN service which encrypts your web activity against hackers.

Pitfall #3: Local Surcharges

Some local merchants charge up to an extra 10% for using your credit card. In these cases, it's generally better to pay with a debit card or cash.

Pitfall #4: Local Currency Conversion

Some merchant machines offer the option to pay in your home currency instead of the local currency. However it usually entails extra fees and a hefty (hidden) currency conversion charge; it's generally better to charge it in local currency and allow your credit card company to do the conversion afterwards.

Pitfall #5: Cancellation due to Inactivity

If you have a "back-up" credit card while traveling, or if you don't often use your credit card, it could be cancelled - without notice - due to inactivity.

Don't let this happen! Be sure to use your card at least once every few months to keep it active.

Pitfall #6: Cash Advances

If you need cash immediately and your debit card won't work, you can use your credit card to get a cash advance. But beware: interest compounds on your entire credit card balance (not just the advance amount) from the date of withdrawal; unlike conventional purchases, which get a 30-day interest-free grace period.

Have you ever dealt with credit card problems on the road? Please share in the comments!

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Nora Dunn, travel and lifestyle expert guest blogger for leading provider of debt relief, CareOne Services, Inc. Nora Dunn

Nora Dunn is The Professional Hobo: a full-time traveler and freelance writer. She is a contributing writer under the CareOne Debt Relief Services A Straight Talk on Debt blog. Having sold her business and belongings to travel, she has been on the road since 2007. She travels in a financially sustainable manner, taking advantage of creative volunteering positions. As a former certified Financial Planner, she is financially responsible for her actions along the way. She believes there is a fine balance between planning for tomorrow, and living for today. Compensated Blogger for CareOne Debt Relief Services.

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  • Between your credit card and insurance policies, you could save yourself some serious money on travel insurance.

  • These tips are very informative and helpful for those who are interested in traveling with a credit card.Thanks for sharing such an amazing article.

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