One of the main benefits of credit cards is the fact that almost all mayor credit cards can be used in foreign countries and thus you can avoid carrying money from one place to another with the risk of robbery. Besides, there many other benefits and drawbacks associated with this aspect that we will analyze in the following paragraphs.
Credit Card Insurance
Most Credit Cards came with an insurance policy that will cover any loss, or theft of your credit card which will be replaced as soon as possible once you contact your credit card issuer.
When you receive your plastic you will get a list of phone numbers (usually toll-free) where you can call in case you loose your card or get it stolen. Always keep this list in a safe place as in the event of a theft or loose of the card, as soon as you report it, the better.
The insurance policy covers your expenses while the replacement is sent to you and also the reimbursement of all the purchases made with the card after the loss or robbery. Bear in mind though, that each credit card issuer has different insurance programs and you should make sure what they cover prior to making your trips.
Refund Insurance
Be aware that though at home you are covered by the refund policy if you purchase goods that are not to your satisfaction, when traveling abroad you should check first with your credit card company before making purchases of expensive goods as you may not be able to obtain a refund if there are no agreements between the credit card issuer and the supplier of the goods.
Legal systems change from one country to another and not all of them have this kind of customer protection programs.
Currency Exchange Rate
When traveling overseas, foreign currencies are always an issue. The exchange rate varies between banks and financial institutions, let alone unofficial currency exchangers that wander in the streets in some countries. With a Credit Card you can always be sure that if you go to an ATM and you retrieve cash, you will get a secure transaction with an average exchange rate, thus avoiding being ripped off.
Bear in mind though, that in some countries, official exchange rate differs a lot with market exchange rate and you may want to consider exchanging your currency before traveling or in some other place if you are already in the foreign country.
Always consult with trustworthy people, mainly personnel from the hotels and restaurants will let you know how everything works.
Beware of the fees
Credit Card companies usually charge extra fees for oversees transactions. There are other costs implied for them when purchases take place in a foreign country. However, these fees are usually calculated on a percentage basis that should not exceed a 2% of the purchase price. Before traveling consult with your credit card issuers how much are they charging for overseas purchases. Compare the fees and decide which of your credit cards you should use when you are abroad. This way you will save money and enjoy your vacations knowing you are making the most out of your money.
---
