Should You Use Your Credit Card When Travelling

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There’s a longstanding debate about whether people should use their credit card when travelling abroad. While there is no right or wrong answer to this question, there is a lot of nuance. 

Cash, credit, and debit cards all have their pros and cons — using the advice of our government and reputable names in the tourism and travel blogging industry, we’re going to provide you with some direction.

If you’re using a credit card when travelling

Let’s assume that whether it’s about points, comfort, or safety, you want to use your credit card when travelling. There are several things you should consider before boarding your plane.

Will your credit card work?

In Europe, they were using PINs on their credit cards while we were swiping, and tapping while we were using PINs. Their technology seems to always be just a wee bit ahead of ours in their major cities.

Africa, Asia, and South America present their own unique differences as well.

Our advice here is simple: Use a major credit card like Visa or Mastercard when traveling abroad.

What are the credit card fees?

There’s always a conversion fee on credit cards. Generally, this fee is about 2.5%, though some cards can be lower and others can be much higher.

You’re going to want to use a credit card that has the lowest fees possible. And even if you do that, don’t forget that many banks charge two conversion fees for Canadians: One from the native currency to USD and one from USD to CAD.

Let your bank know you’re travelling

Many banks nowadays allow you to put a travel notice on your cards using your online banking system. You should make sure that this is done so that your card doesn’t get locked due to suspected fraud while traveling.

Bring more than one credit card when travelling

There’s an old saying about preparedness that goes something like this:

If you have three, you really have two. If you have two, you really have one. And if you have one, you have none.

The idea is that something is always bound to fail or go wrong when you can’t afford it to (literally). So always have a backup card on you!

What the Canadian government recommends

If you visit the travel section of the Canadian government website, you’ll find three recommendations for using a credit card abroad:

  1. Know the expiry days, account balance, and amount of credit available on all of your cards.
  2. Make sure that your credit card company and financial institution have your up-to-date contact details, including your cell phone number.
  3. Check with your financial institution to see if your credit card will be accepted in the place(s) you are travelling.

Don’t use your credit card in sketchy machines

If possible, only use your credit card on big purchases like flights, hotels, and restaurants. Avoid, at all costs, using your credit card in an alley machine in a sketchy part of town. It’s better to be safe than sorry.

If you are using cash when travelling

The government recommends you carry cash when travelling. That’s solid advice.

“If you are permitted to import [the host country’s] currency, bring enough cash to get by for a couple of days and keep it in a money belt or in several different pockets, in case your wallet is lost or stolen or your financial institution accidently freezes your cards.”

Taking out cash while abroad

The number one rule for taking out cash while abroad is to only take it out from reputable ABMs or exchanges in popular areas like train stations, airports, seaports, and banks. If you’re in a pinch and need cash badly, many large hotels will provide you with the local currency for a very unfavourable (to you) exchange rate.

If you bank with an institution like Scotiabank, as a debit card holder, you are part of the Global ATM Alliance. This alliance allows you to withdraw local currency with no fees incurred. You can find the ATM Alliance list of countries and banks by clicking here.

Before you leave Canada

We’ve helped thousands of Canadians travel abroad with the money they need, at a competitive rate, and we’ve answered many of their questions along the way.
Before you head out to whatever destination is calling your name, don’t forget to visit Currency Converters in Waterloo — we’re here to help make sure you have a great time abroad!

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