Ok, so what’s one of the first steps in planning an overseas trip, whether it be for business or pleasure? If you answered something along the lines of "booking a hotel" or "logging onto Priceline", you’ve got it...wrong. In actuality, one of the first things you must figure out, after deciding where you want to go, is the logistics of spending money with overseas merchants. In doing so, you need to find the best exchange rate possible.
Exchange Rate Study
While your initial reaction might simply be to order some foreign coin at your bank or decide to grab some at one of those stands you see in the airport, your best bet is actually to apply for a no international fee credit card, according to a recent study by Card Hub. This study, which examined the U.S. dollar-to-Euro exchange rates offered by MasterCard, Visa, 15 major consumer banks and Travelex, the largest currency exchange company in the world, determined that consumers can save up to 14.7% on currency conversion alone simply by using the right credit card.
Foreign Exchange Fees
You see, getting the right credit card is important because not only will it automatically get you the lowest foreign exchange rates, but it will also allow you to avoid the 3% foreign usage fees charged by 90.2% of credit cards. Also, depending on your destination, you probably want a card on either the Visa or MasterCard network since they have by far the broadest worldwide acceptance. But why, you might ask, must a foreign traveler decide upon a MasterCard or Visa credit card before even booking a flight? Well, while you might assume that foreign transaction fees only apply to purchases made when you’re physically outside the U.S., they actually apply to any purchase processed abroad. Therefore, if you book a flight, hotel, day trip, etc. with a foreign-based company and use a run-of-the-mill credit card, you risk spending 3% more than is necessary.
Low International Fee Debit Cards
As you might be aware, however, cash is also integral to any international trip. Small merchants and cab drivers oftentimes only accept cash and, depending on the country, U.S. magnetic stripe credit cards might not be compatible with segments of the payment infrastructure, such as train station kiosks or vending machines. Again, your solution is plastic. By opening a low international fee debit card, you can withdraw money from ATMs in your destination and enjoy the relatively low credit network exchange rate. From the editorial team at Card Hub, a credit card comparison and education website.
