Avoid credit card fees when traveling overseas

When traveling overseas, knowing the best way to pay for purchases can save you a lot of money. Before you use your credit cards abroad, you need to do your research.

Planning ahead so you don't face unnecessary fees or get gouged on the exchange rates is a starting point, but there are other strategies too. Your money will go a lot farther if you know what to watch out for.

"You can get blindsided by the foreign transaction fee that many credit card companies charge on overseas purchases," said Greg Daugherty with Consumer Reports Money Adviser. "It can add up to as much as three percent of everything you put on the card."

There are cards with no foreign transaction fee, including Capital One, HSBC Premiere World Master Card, the American Express Platinum Card and Chase's Sapphire Preferred Card.

But at some locations overseas, like gas stations, where a credit card might be rejected no matter which card you have.

"Europe is switching to a new, more secure type of credit card, and American credit cards aren't always accepted," said Daughtery. "You'll be okay at restaurants and hotels, but you may need to pay cash at gas stations, train stations and smaller shops."

To get local currency, your best strategy is to go to a bank ATM and use your debit card. It's more secure than bringing lots of cash and you may get a better rate than at a currency exchange service.

"Be prepared before you use a European ATM," Daughtery said. "Most of the keypads don't have letters on them, so be sure to memorize your debit card PIN as a number before you go."

Finally, it's a good idea to tell your bank where you'll be before you head overseas, so the bank won't suspect your card has been stolen and put a freeze on it.

Another money-saving tip from Consumer Reports Money Adviser: When using a credit card for purchases, be sure the merchant charges you in local currency. If you're charged in dollars, you could end up paying a lot more.

Consumer Reports is published by Consumers Union. Both Consumer Reports and Consumers Union are not-for-profit organizations that accept no advertising. Neither has any commercial relationship with any advertiser or sponsor on this site.

(All Consumer Reports Material Copyright 2011. Consumers Union of U.S. Inc. ALL RIGHTS RESERVED.)

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consumer reports, credit cards, travel, 7 on your side, michael finney

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