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Don’t Travel Without Knowing Credit Card Basics

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Many consumers these days rely on their credit cards to make many of their everyday purchases, and that becomes especially true when they go on vacation, as using a card is often more convenient than carrying cash.

However, consumers who are planning a vacation should get familiar with the terms and conditions of their credit card accounts so that there are no surprises on their bills when they get back, according to a report from the Arizona Republic. In many cases, a credit card might come with a certain number of restrictions and rules based on purchases made overseas, but can also help borrowers save money by giving them access to some perks—such as roadside assistance, travel insurance, free rental car collision coverage and more—that they didn’t even know they had available to them.

One common restriction that many cards have, which can be extremely troublesome in other countries, is that lenders charge a fee to convert the account’s American dollars into the foreign currency, the report said. Sometimes, these charges can run as high as 3 percent of the total cost of a purchase, meaning that a borrower’s balance can often grow significantly over the course of a few days or a week without their even knowing it.

And when traveling abroad, it’s important for borrowers to alert their credit card lenders to their plans, the report said. That’s because if the lender doesn’t know a customer is going overseas and notices a large number of purchases on an account in a country they rarely or never visit, they might put a stop on the account, leaving a borrower with no way to pay for anything. Often, this is done automatically through the company’s computer systems. But if they are aware of a borrower’s travel arrangements, this won’t be a problem. In addition, taking the time to alert them will also give borrowers the opportunity to become better acquainted with how to report a lost or stolen credit card when they’re not in their home country.

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Experts generally recommend that consumers use credit cards when traveling abroad to make sure their purchases are protected. Most lenders give greater protections to purchases made on this type of card than with cash or debit.

Image: kthread, via Flickr

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