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Ken Tumin founded the Bank Deals Blog in 2005 and has been passionately covering the best deposit deals ever since. He is frequently referenced by The New York Times, The Wall Street Journal, and other publications as a top expert, but he is first and foremost a fellow deal seeker and member of the wonderful community of savers that frequents DepositAccounts.

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Avoid a post-trip scare by following a few simple tips for overseas purchasing

The following is a guest post from Odysseas Papadimitriou, CEO and Founder of, who has offered to share his expertise on using credit cards overseas.

So rubber just hit asphalt, and your plane has arrived in your foreign destination. You manage to fight through the crowds at baggage claim and not lose your mind going through customs. After all the travel and hassle you are more than ready to set off exploring on your exotic vacation or get to your hotel in order to prepare for that first big meeting on your business trip’s itinerary.

But wait, how are you going to pay for the cab or buy a loved one that souvenir? All you have in your pocket is a few American dollars. Do you really feel like seeking out a decent currency exchange rate? Probably not.

So why not use a credit card? Such a course of action is, perhaps, not the first option considered by many travelers, but maybe it should be. Using credit cards for overseas purchases rescues travelers from the headaches associated with currency exchange—favorable rates, determining just the right amount to convert so as to have sufficient funds but not be stuck with what might as well be Monopoly money upon returning home—and provides the security of not being at the whim of those quick-handed foreign pick-pockets.

Still, there are a number of notable traps of which a plastic-wielding voyager must be aware.

First, the Foreign Transaction Fee:

Credit card agreements often have associated fees of 2-3% of any purchase made abroad, which create unfavorable disparities between an item’s listed price and what actually shows up on a credit card statement. The informed traveler should inquire as to the existence of such fees on his or her credit card and even consider applying for a no Foreign Exchange Fee credit card before embarking.

Second, Dynamic Currency Conversion:

Imagine your relief when a foreign merchant offers to convert the terms of your purchase from the local currency to the familiar U.S. dollar. What a convenience, right? Wrong. Merchants offer this “service” while inflating exchange rates as much as 7% to line their pockets, not to be kind. To avoid paying a premium for familiarity, simply refuse any offers to have the terms of a sale converted and only sign receipts that represent purchases in the local currency.

In addition to watching out for these troublesome fees, travelers should make sure that their credit card network will be accepted at their destination. Visa and MasterCard are the most universally accepted networks, while American Express’ acceptance rate is a function of the country in question’s development. Discover, on the other hand, is rarely accepted outside of the United States.

If you are traveling to Europe, passport identification may also be required with every purchase because of the differences in credit card security measures used in Europe and the U.S. (many European countries use chip-and-PIN technology, employing smartcards that verify accounts automatically with a PIN while U.S. cards merely have magnetic security strips).

Finally, make sure to notify your credit card provider of your travel plans so it does not suspend your account because of suspicious activity.

In case that information was as overwhelming as arrival at a foreign airport, here’s a quick checklist:

  • Make sure you have a Visa or MasterCard without Foreign Transaction Fees
  • Notify your credit card company of your travel plans
  • Remember to have your passport when making purchases
  • Refuse offers for currency exchange when making purchases; only sign receipts that show amounts in terms of the local currency

Ultimately, it is your choice as a traveler whether or not you heed this advice. Imagine for a second, however, that you don’t. Say you visited Pairs; it’s nice this time of year. You saw the Eiffel Tower, visited The Louvre and even got a poster of the Mona Lisa for your mom and a burette for your sister. Flash forward to after your trip. You come home from a long day at work. Oh, there’s the mail. Look, a credit card bill; I bet nostalgia is kicking in right about now. Hold on, there must be some sort of mistake! Why is the bill for 10% more than it should be? The answer: Foreign Transaction Fees and Dynamic Currency Conversion! Should have listened when you had the chance!

This guest post comes from Odysseas Papadimitriou, CEO and Founder of, an online marketplace for credit card offers.

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Anonymous   |     |   Comment #1
In summary, use a Capital One card in local currency overseas to minimize fees. Such a verbose plug for another website.
jeff   |     |   Comment #2
Addison Avenue Federal Credit Union and Agriculture Federal Credit Union both issue credit and debit cards without a foreign currency fee. Anyone can join either credit union and they both have cash back rewards programs.
anter   |     |   Comment #3
my Schwab Bank Invest First™ Visa Signature®  does not charge FTF, and also gives 2% back
ChrisB   |     |   Comment #4
Should we take travel advice from a guy named Odysseus? -- the most famous dude with that name took twenty years to get home!
Anonymous   |     |   Comment #5
Despite the plugs for his website, this is still so much better than the schlock from Miranda.
Anonymous   |     |   Comment #6
I know thta Citi and others wind up charging 3% total foreign fees. What about using debit cards overseas?
David   |     |   Comment #7
I thought there were rules against CC companies charging FTF and currency conversion fees.  They are not allowed to charge both.  I can assure you if your bank does not charge a 3% FTF on every purchase then they are making it on the currency conversion.  Check your statement upon receipt and then use YAHOO currency converter for that date, I believe there is historical data there and then do the math and determine the % paid. Who knows really what the exact conversion rate is anyway? I can guarantee you as a retail customer you do not get the spot rate.  Its probably better to be charged 3%.  Then again even if they just charge the 3% you're still not getting the spot conversion rate but its still better than the conversion without a FTF.
Anonymous   |     |   Comment #8
Great point about the passport! I was in London and I wanted to buy a gift for my daughter and the store would accept my US credit card because it did not have a chip and I did not have my passport!
James   |     |   Comment #9
Ken - the checklist is a pretty good idea - helpful article.
Anonymous   |     |   Comment #10
When I was going to Spain, a Spaniard who I was staying with said to just use your ATM card to take out money. I was charged, IIRC, $3 per transaction. And then paid in Euros wherever I went. I didn't make huge purchases tho and I was staying at my friend's place. So, it's possible if I needed to do lots of major transactions a credit card would be worthwhile to use. Plus, my friend picked me up at the airport and had Euros on him that I borrowed for transportation. There was a question of if the airport ATMs would be charging me more at the airport. So, I just borrowed Euros from him and paid him back.
Rosedala   |     |   Comment #11
Thank you Ken and Odysseas Papadimitriou for the heads-up on traveling overseas.  I haven't traveled abroad in a long time and this comes very handy.       
Hub   |     |   Comment #12
Very helpful. I recently prepaid for a hotel in Thailand and got hit with a FTF. Ironic that it was on my Bank of America "World" card. Called Chase and they charge them on that card too.  So I got a new card with better rewards anyway and no Foreign Transaction fees for my trip.


Thanks for the heads up.

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