Compare Credit Cards Before Going Overseas

If you are thinking of spending some of your holidays abroad this summer, you may need to plan carefully on how to pay for it. It is likely that you will be using your credit card. A recent survey, which tried to compare credit cards and other forms of payment during trips overseas, showed that 90 percent of survey participants preferred the convenience of using their credit cards over travellers’ cheques.

However, you will have to compare credit cards if you intend to use one for your holidays. There are bound to be credit cards that are just right for you and cards that may cost you a small fortune.

When you travel abroad there is plenty of likelihood that you will use the card to pay for your purchases and, if you really need some cash, you will be queuing up at a cash machine to withdraw some money. The thing is, the credit card company will be charging you some fees for these overseas transactions. There is wide variation in such charges among card issuers so it makes sense to compare credit cards to ensure that you will be using the right credit card. If you can do that, you will probably spend less than if you exchange travellers’ cheques or currency.

Though you have the chance to spend less with the right credit card, there still are fees. Practically all credit cards will add a fee on top of the exchange rate prevailing at the time you made the purchase transaction at a foreign vendor’s establishment with your credit card. They call this a loading fee. Even debit cards, if you will be using one, also have a related charge although it is a flat fee on the transaction regardless of the purchase amount. When you compare credit cards, you will want the card that charges a lower loading fee.

The charges per purchase transaction on one credit card may be a pound whilst it could be £1.25 with another card. This should illustrate to you why it is important to compare credit cards and find the best one for use overseas. For the year 2007, it is estimated that overseas spending will reach £204 million for credit card purchases and £151 million in foreign currency withdrawals. That would generate about £5 million in transaction fees to the credit card issuers.

Some observers on the credit card industry believe that in the long run, consumers will probably elect to have a credit card for local use in the UK and another credit card for purchases abroad. This will become necessary because, as will become obvious when you compare credit cards, some credit cards will give you more favourable transaction fees for overseas usage but at the same time have features for domestic use that cannot beat the features of other credit cards, and vice versa.

The competition will probably get fiercer. Already, some credit cards do not charge anything for transactions using the card, anywhere around the globe. Some others will not charge you for foreign exchange loading fee on uses in Europe only but will charge between 1% and 2.75% for usage elsewhere. As competition gets tough, it becomes even more important for you to compare credit cards.

Also another related article is Compare Credit Cards Before You Go On Holiday.

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