Using your credit card for international travel: Is it really a good idea?
A credit card is one of the most convenient ways to spend abroad, especially since many banks offer some extra benefits – like reward and loyalty points – when using them. However, credit card foreign transaction fees can also get quite high, and you might run into extra fees such as cash advance charges to get cash from an ATM, interest and penalties.
So – what are the real costs of using your credit card abroad? Are there any ways to pay less overall in fees? In this article we will cover all this and we’ll show you some cheaper and more convenient alternatives to using your credit card abroad, such as the Wise travel card or Revolut travel card.
Can I use my credit card internationally?
Yes. Pretty much all US credit cards can be used overseas, but there are a couple of important provisos. Firstly you might need to let your bank know you’re traveling to avoid the risk of them blocking the card to stop fraud. And secondly, how easy it is to spend on your credit card abroad may also depend on the network it’s issued on.
Generally, Visa and Mastercard networks are the most broadly accepted globally, with merchants and ATMs in most countries being happy to let you spend and withdraw. Discover and American Express are slightly less popular in some countries compared to the US. While they’re often accepted in busy cities and tourist resorts, you’ll still come across some merchants and ATMs where you can’t use cards issued on these networks.
How can I use my credit card abroad?
Generally you can use your credit card abroad in the same way as you would in the US. You can tap and pay in stores, and use your card with a mobile wallet like Apple Pay if it’s eligible. You can also use your credit card to make cash withdrawals where your network is supported at an ATM – although fees can be particularly high for this.
Here are a few pointers on things to consider before you use your card abroad:
- Check how popular your specific card’s network is, in your destination. Visa, Mastercard, Discover and Amex all have country by country information available on their websites – your bank can also advise you if needed
- Inform the bank of your travel dates to avoid having your card blocked during your stay abroad, and make sure your contact details are up to date on your card account in case the bank need to get in touch during your vacation
- Check the rates and fees applied by your bank or financial institution when using the credit card abroad, as well as the spending and ATM limits set for it. You might be able to increase the spend limit if you need to, online or in your card app
- Always pay in the local currency wherever you are, to avoid bad exchange rates and extra fees set by the merchant or ATM operator
For many travelers, travel cards from non-bank providers like Wise and Revolut can be a better alternative than using a credit card overseas. We’ll look at these cards, and why they’re a good bet for overseas use, next.
Alternatives to using your credit card abroad
Spending with a card when you travel is secure and convenient. But using your credit card isn’t your only option. You might prefer an alternative, which could offer flexible spending and withdrawals with lower overall fees and better exchange rates.
Some alternatives worth considering include prepaid cards, debit cards, and specialist travel cards linked to multi-currency accounts. Many of these are optimized for international travel which can mean lower fees, and issued on popular networks which are accepted all over the world.
Let’s take a closer look at two good choices you might want to consider.
Wise debit card (40+ currencies, 150+ countries)
You can open a Wise account online or on your phone and order a Wise card for a one time fee. Accounts support 40+ currencies for holding and exchange, but you can use your card even more broadly – in over 150 countries – to spend and withdraw. Add some money to your Wise account in dollars and you can choose to switch over to the currency needed in your destination, or leave in USD and let the card do the conversion when you pay. In either case you get the mid-market rate and low fees from 0.35%.
Wise also offers a couple of free ATM withdrawals, to the value of 100 USD, every month, before any cost begins.
- Hold and exchange 40+ currencies, spend in 150+ countries
- No ongoing or annual fees to pay
- Currency exchange uses the mid-market rate and low conversion fees from 0.35%
| Wise debit card pros | Wise debit card cons |
|---|---|
| ✅ Mid-market exchange rates ✅ No annual or ongoing fees ✅ Some free ATM withdrawals monthly ✅ Spend and withdraw in 150+ countries securely | ❌ Currency conversion fees from 0.35% ❌ ATM fees apply once you’ve exhausted your free withdrawals |
Revolut debit card (25+ currencies, 150+ countries)
Revolut US customers can pick from 3 different account plans to choose the one which best suits their spending patterns. There’s the Standard account which has no monthly fee to pay, as well as Premium and Metal plans which have monthly costs but which also offer higher levels of no fee transactions and extra perks.
All accounts have some weekday no fee currency conversion so you can spend and exchange within market hours with no extra charge. Once you’ve exhausted your monthly conversion limit, fair usage fees apply.
- Get an account with no monthly fee or upgrade for more features
- Hold and exchange 25 currencies, and get some no-fee conversion on weekdays, every month
- Make some no fee out of network withdrawals, plus no fee ATM withdrawals at home or abroad within the Allpoint network
| Revolut debit card pros | Revolut debit card cons |
|---|---|
| ✅ Choose from different accounts to suit your spending needs ✅ Some no fee currency conversion and ATM withdrawals available ✅ All accounts come with a card for international use ✅ Higher account tiers offer extra features | ❌ Monthly fees apply for full feature access ❌ Fair usage and out of hours fees apply |
Fees for using your credit card abroad
Some major US banks offer travel optimized credit cards, which can have specific benefits for overseas use, such as no foreign transaction fee. Other cards typically have a foreign transaction fee of about 3% which applies whenever you spend in a foreign currency. Bear in mind though, that even if you pick a travel credit card, there will be some fees you need to know about. These can include high costs when you use an ATM, interest and penalty charges if you don’t pay off your bill in full every month.
Here’s an overview of a couple of travel credit cards against travel debit cards from Wise and Revolut:
| Bank/provider | Annual or monthly fee | International spending fees | International ATM Withdrawal fee | Exchange rates & currency conversion fees |
|---|---|---|---|---|
| Bank of America Travel Rewards Credit Card | No annual or monthly fee | No foreign transaction fee | 5% of the withdrawal value + interest | Network exchange rate |
| Wells Fargo Autograph Journey Card (credit) | 95 USD | No foreign transaction fee | 5% of the withdrawal value (minimum 10 USD) + interest | Network exchange rate |
| Wise debit card | No annual or monthly fee | Free to spend a currency you hold in your account | 2 free withdrawals to 100 USD/month Then 1.5 USD + 2% fee applies | Mid-market rate + conversion fee from 0.35% |
| Revolut debit card | 0 USD/month – 16.99 USD/month depending on plan | No fee to spend a currency you hold in your account | No fee out of network ATM withdrawals to plan limit No fee for in network withdrawals Elsewhere, a 2% fee applies | Mid-market rate to plan limit for weekday conversion Fair usage and out of hours fees may apply |
*Date correct at time of research – 13th June 2024
Here we selected specific travel credit cards which don’t have foreign transaction fees – but you still need to look carefully at the other fees that apply like annual charges, and ATM fees. ATM fees can be particularly steep at around 5%, with interest which might be at a higher rate compared to purchases.
If you’re looking to keep down the costs of your trip overall, you might find that travel debit cards from providers like Wise and Revolut can offer better alternatives for international travel, with low fees and great exchange rates.
What is the exchange rate used on my international credit card?
When you spend or make withdrawals with your credit card overseas, the spending is converted back to dollars to be added to your bill. Generally you’ll find your bank credit card will use the network exchange rate, and then may also add a foreign transaction fee when calculating what you owe in dollars.
Here’s a quick look at how the banks we touched on above set exchange rates compared to the non-bank debit card providers we also featured:
- Bank of America exchange rate: Card spending uses the network exchange rate which may include a small markup. If a foreign transaction fee applies this is likely to be 3%
- Wells Fargo exchange rate: Card spending uses the network exchange rate which may include a small markup. If a foreign transaction fee applies this is likely to be 3%
- Wise exchange rate: Mid-market rate with conversion from 0.35%
- Revolut exchange rate: Mid-market rate on weekdays to plan limit. Out of hours fee of 1%, and/or fair usage fee of 0.5% may apply
How to use your credit card for cash withdrawals overseas
Credit cards can be used abroad to make withdrawals at any ATM that’s connected to your card’s network. You can look out for the card network logo on the ATM terminal, or do a bit of research in advance, looking at the Visa (Plus network) or Mastercard (Maestro and Cirrus) websites.
The fees you’ll need to know about for ATM use can include:
- Fees charged by the bank: Such as a foreign transaction fee or a cash advance fee – shown in your account terms and conditions
- Fees charged by the ATM: Extra costs which are paid to the ATM provider – these usually flash on screen before you confirm your withdrawal
As with all credit card spending, the amount you spend or withdraw, plus any fees, will be added to your bill every month. Your foreign currency spending is converted to USD before your bill is produced, using the applicable exchange rate and including any extra costs you have to pay.
When you use a debit or travel card, the fees can work differently. You’ll still need to watch out for ATM operator fees but you may get some withdrawals which have no provider fee. Here’s a look a Wise and Revolut for ATM use:
- Wise card ATM withdrawals: 2 withdrawals to the value of 100 USD peer month free, then 1.5 USD + 2%
- Revolut card ATM withdrawals: No fee for withdrawals within the Allpoint network, which has ATMs in some overseas countries as well as the US. Some no fee out of network withdrawals available, based on plan type, before a 2% fee applies
How to use your credit card for spending abroad
Once your card is set up for overseas use you can use it as conveniently abroad as you do at home. You might need to specifically tell the bank to convert your card for overseas use, or let them know where you plan to visit to avoid your card being blocked for fraud. Any overseas purchases are added to your monthly bill to be repaid, including any fees or exchange rate fees you have to cover.
Travel card providers like Wise and Revolut may be cheaper for your overseas spending, offering the mid-market exchange rate with low conversion fees. It’s free to spend if you have enough balance in the currency you need – or you can let the card convert when you pay with the mid-market rate and low conversion fees.
- Spending with Wise card: Free to spend when you have enough balance in the required currency – or the card can automatically convert your balance from the currency in your account which attracts lowest fees
- Spending with Revolut card: No fee to spend when you have enough balance in the required currency – if conversion is required you’ll get no fee weekday conversion to your plan limit, with fair usage fees after that
Pros and cons of using your credit card abroad
| Pros of using credit card abroad | Cons of using credit card abroad |
|---|---|
| ✅ Convenient and safe ✅ No need to carry a lot of cash ✅ Cards are broadly accepted globally ✅ Some cards offer rewards, cash back and points as you spend | ❌ Foreign transaction fees may apply ❌ High costs can apply for ATM use ❌ You may need to tell your bank before you travel ❌ Interest and penalties can apply |
When is it better to use your credit card abroad?
There are a couple of scenarios where your credit card might be better than using a debit or prepaid card:
Car rental: It’s common for vehicle rental places to ask for a credit card as a payment guarantee. If you don’t have this, they might ask you to hand over a significant amount of cash as a guarantee against damage to the car
Check in at hotels: Hotels often ask for a credit card they can charge for extras or damage to the room, in case you check out without paying in full. If you don’t have a credit card they may ask for cash or put a hold on your debit card instead
Self-service gas stations: Debit cards might not be accepted at all here, or you might find there’s a hold of a fixed amount put on your card, with any unused balance refunded at some point after the transaction completes
How to avoid foreign transaction fees of credit cards
- Look for a specific travel credit card which offers no foreign transaction fee on overseas spending
- Avoid using your credit card in an ATM abroad, where cash advance fees, interest – and possibly also foreign transaction fees – will apply
- Get a different type of card, such as a travel optimized debit card from a specialist provider, to avoid foreign transaction fees and access great exchange rates
Chase Card Foreign Transaction Fees | American Express Foreign Transaction Fees | Discover Card Foreign Transaction Fees | Capital One Foreign Transaction Fees | Wells Fargo Card Foreign Transaction Fees
Learn more: Best travel cards without foreign transaction fees
Tips for spending with your credit card abroad
- Avoid dynamic currency conversion (DCC): DCC is where you’re asked if you’d prefer to pay in your home currency instead of the local currency where you are. Say no, to avoid extra fees and a bad exchange rate
- Understand your credit card’s foreign transaction fees: Where foreign transaction fees apply then can add about 3% on to everything you spend – in addition to any other charges like interest or cash advance fees
- Check out the perks that your card might offer: If your card has travel focused benefits use them as extensively as possible. You might be able to get discounts on hotels, lounge access, or extra rewards for international spending for example
- See how widely accepted your card network is in your destination: AmEx and Discover aren’t the most common networks in some countries, so do check ahead to know if your card will be easy to use
- Have some form of backup funds: Don’t get stuck with no money and no means of payment – have a little cash, an extra travel money card or two, and your US debit card, just in case
Conclusion: Is it worth using a credit card abroad?
Spending with a card is convenient and secure. However, using a credit card abroad may attract more fees compared to using it at home. It’s crucial to check out the likely costs before you travel, so you’re not caught out. You’ll also want to check the network availability, and whether you need to instruct your bank you’re away from home, so you don’t get locked out of your account on your precious vacation.
Consider popping a travel money card into your wallet alongside your credit card. This can be a useful backup, and is usually cheaper when you need to use an ATM, too:
- Wise: Hold and exchange 40+ currencies, spend in 150+ countries, and get the mid-market rate with no foreign transaction fee to pay
- Revolut: Hold 25+ currencies, with some no fee weekday exchange and out of network withdrawals, and no charge for in network ATM withdrawals on the Allpoint network
Using a credit card abroad FAQs
Can I use my Discover card internationally?
You can use Discover cards overseas wherever they’re accepted, with no foreign transaction fee. However, Discover isn’t as commonly used as Visa and Mastercard in some countries – so you may prefer to carry an extra payment method like a debit travel card from Wise or Revolut as well.
Can I use my AmEx card internationally?
American Express cards can be used for spending and withdrawals overseas. Bear in mind that in some countries, AmEx isn’t always supported so you’ll need to keep an eye out for the logo at ATMs and payment terminals.
