Going abroad with a credit card

Credit cards can be very useful for a person who travels abroad.  Credit cards can be spent as if they were domestic currency as they are billed in Australian dollars but pay out in what ever the currency that the shop or service provider uses.  This is not the only reason why credit cards should be taken abroad, and there are a number of other features that make a credit card useful to a traveller.

Credit cards are accepted all over the world.  Both VISA and MasterCard, the two main credit card processors, have close to 30 million outlets that accept their cards.  This can mean that the card can be used in almost any country in the world and has a far wider acceptance than currency.

Credit cards are able to do this because they run an automatic currency conversion.  This means that the credit card is originally billed in whatever currency the good was bought in.  At the end of the day the card then has a conversion into the card holder’s currency.  This is usually at a rate that is comparable to a bureau de change, and in some cases such as those currency conversion kiosks in the airport the credit card will be cheaper.  It is even cheaper if the traveller is not converting the currency and then converting it back as it is not spent.

Foreign transactions can also have fees that are attached to them.  This is not always the case and many credit cards do not have these fees, particularly those that are aimed at frequent travellers.  However many credit cards do and this is usually expressed as a percentage on each transaction.  This can add considerably to the cost of the credit card when a lot is being spent abroad.

Credit cards are useful when a credit card is stolen.  Unlike cash as foreign currency the credit card can be stopped as soon as it is reported stolen.  It is also the case that the credit card will in most cases be under a zero liability guarantee, which means that if there is an unauthorised transaction on the credit card then the card holder will not be liable to pay this amount.  This relies on the transaction being quickly reported to the credit card issuer, which is another reason to quickly report a lost or stolen credit card.  It also relies on the credit card holder not contributing to the unauthorised transaction by giving the credit card to be used by another person.