Traveling Abroad? Get to Know the Power of Plastic Credit Cards

As you gather your favorite swimsuits, sunglasses and sandals for that tropical vacation of a lifetime, remember to pack your credit card and a little bit of extra cash. In most cases, it seems to be in an international traveler's best interests to use a credit or debit card for international purchases. The Interbank exchange rate can fluctuate a great deal, but when converting with plastic, the rates may be between two and seven percent better than exchanging foreign currency with US dollars or Travelers Cheques.

Though these great rates make it very enticing for travelers to purchase significant items more readily, a new movement by credit card companies is beginning to lessen the impact of the bargain. Many credit card companies have begun charging a small percentage of every purchase made with a credit card in a foreign currency. Though most companies charge a standard one percent fee at the very least simply for the privilege of using a credit card, currency exchange fees may climb to a maximum of about four percent.

When requesting cash advances, remember that the credit card company's imposed finance charges will also collect alongside your other borrowed funding. In most cases, cardholders can use debit cards as credit cards and in requesting additional cash. Though it is difficult to say which payment form will give you the best exchange rate at the least inconvenience from country to country, credit and debit cards coupled with small to moderate amounts of cash seem to be the most comfortable approach for most.

Tips and Warnings for International Credit Card Spending:

- Be wary of the charges placed upon your credit cards when renting cars and booking hotel rooms. Often these businesses may impose the entire fee that will be due by putting holds on your credit cards before your vacation has even gone into the swing of things. When this happens, it leaves your credit limit unexpectedly slimmer than you might anticipate. (Business operators should alert you if they have put a hold on your account, and should remove it once it has been paid.)

- Be vigilant with checking your purchases as each item is tallied on your bill. Many times international consumers are charged for an item they never purchased or twice for the same purchase. If problems do arise, be informed that credit card companies do not always take motions to intervene with the merchants in erroneous international purchases.

- Keep some cash on you for tipping purposes. Use credit for larger purchases, tickets, dining and running a tab where applicable, if desired.

- Be aware that items purchased with a credit card and shipped back to the United States are often not covered for breakage and other damages. If it can be done, pack all purchases within your luggage.

- Prior to leaving the country, contact your credit card company and find out about any additional fees that may be imposed for using the card outside of the country.

- Be especially careful about keeping your receipts and account information in a safe and private place for fear of identity theft, both abroad and at home. If you do not wish to keep these documents, shred them or otherwise destroy them.

In terms of convenience, making purchases overseas with a credit card may be the way to go. As long as the credit card fees aren't too high and the exchange rates are in your favor, using your credit cards for major purchases makes for quick and easy routine transactions.

To find out the most up-to-date currency conversion rates prior to leaving the country, visit http://www.xe.com/ucc/.