Hello dear blog readers! It is quite possible that the bank card that is now in your wallet is categorically not suitable for traveling abroad. And it’s not just about high commissions and unprofitable rates. It may simply not work in the country you are going to. In order not to get into such a situation, you need to find out in advance which one to choose and how to use a bank card abroad.
What card to take with you on a trip?
It is necessary to start preparing for the trip in advance. For this, it is not enough to issue documents and buy vouchers. You should also check your wallet and understand which card you are going to travel with and which cards are accepted at the arrival area. Perhaps it makes sense to order a new one.
Payment system First of all, take a look at the front of the plastic and find on it the icon of the payment system, which acts as an intermediary between the bank that issued the card and the bank serving the organization where you plan to make the purchase. There are international payment systems and local ones. The first ones operate in many countries, while local ones allow making settlements within one or a limited circle of states.
Plastic card type
It is worth bringing at least a debit and credit card with you. Just in case, let me remind you how they differ:
- Debit allows you to pay only within the account balance.
- Credit has a certain limit, within which the client has the right to use the borrowed funds of the bank. There is almost always a grace period when it is allowed to return money without interest.
Often, outlets only accept credit cards, since it is believed that their owner is more solvent. A debit, even with a high status, may not be accepted or a passport may be required to confirm identity. In addition, more stringent requirements are usually imposed on a client who wishes to issue a credit card. It is reasonable to provide a credit card when renting a car or booking a hotel. If you paid with a debit card, then a certain amount is frozen on it, which cannot be used until the restrictions are lifted (and this process sometimes takes a long time).
When paying by credit card abroad, borrowed funds are reserved. Moreover, freezing is not considered a waste, so even interest on the loan is not charged. But it is easier to withdraw cash from a debit. When cashing a credit card, the interest-free period is often interrupted and the interest rate increases. Many banks issue cards for travelers. They usually provide for more loyal conditions for cashing out money in a foreign land, as well as the acquisition of bonuses for settlements at the hotel, the purchase of air tickets and other typical spending for a tourist like high roller online casinos. These cards are ideal for use anywhere you want.
The card must be personalized, embossed (with embossed letters and numbers) and have a chip. It is better not to take instant unnamed plastic with you, since it has a low status and does not work everywhere. Magnetic stripe variants are easily counterfeited, so there is little credibility for them either.
Often, people simply do not understand where their money goes when making payments. It seems like they paid for one price tag, but a completely different amount was written off. To find out how the “magic” of writing off works, you will have to touch on the topic of conversion. We will not delve deeply into the processes of currency conversion abroad, but will look at hypothetical examples when the main losses occur.
How to avoid conversion losses
First of all, accept that you will not be able to do without spending at all. After all, even the ideal fourth option from the section described above has a small snag: the account will have to be replenished and one way or another to convert rubles into dollars (or another currency). Of course, if your salary is in foreign currency, then there are no questions, but ruble savings still need to be contrived to profitably exchange. Therefore, I propose alternative solutions:
- One of the solutions can be a multicurrency card. It is linked to several accounts in different currencies. It is easier to transfer one currency to another within the card, since the exchange rate there is often more profitable than the official one at the exchange office or bank cash desk. But keep in mind that it is only debit.
- Choose cards without commissions for conversion operations.
- The best cards are exchanged at the rate of the Central Bank of Russia. This will save you from unnecessary extra charges, but, alas, will not insure you against rate jumps.
- Choose offers with cashback and interest on the balance in order to compensate for the expenses at least to some extent.
Tips for using a plastic card abroad
There are some more rules and tips that will make the process of using a plastic card abroad more profitable.
- Withdraw cash correctly
Large banks have foreign offices and their own ATMs, through which you can withdraw cash without unnecessary surcharges. Also, if the organization is a member of an international financial group, then it is also possible to cash out money at the ATMs of the partners in the association without overpayments. If the ATM is “not native” and you do not understand whether it will give you bills or not, then look at the logos placed on it. If it has the same logo as on the plastic, then it means that it works with the payment system of your card. However, withdrawal fees are most likely inevitable. Since a fee is charged for each transaction, it is more profitable to withdraw cash not in small amounts, but in large amounts. And for the first time, it is advisable to buy a certain amount of cash at home, “catching” a profitable rate.
- Don’t waste it all
This rule is especially true for debit accounts. Due to the peculiarities of the exchange, which we discussed above, you have a chance to fly into the red and get into an unauthorized overdraft. It arises when own funds were not enough and the bank’s money was written off. And now you must return them immediately, and even with interest (up to 50% per annum). Always check your account balance and leave margin for unpredictable expenses like commissions and rate jumps.
Pay for your purchases in local currency
When you pay with a card, the seller may offer you to pay in rubles. At first glance, it seems that it is convenient: you do not need to figure out in your mind how much the payment will cost you, and the exchange rate difference is not terrible. But in reality the situation is different. If the currency of the card and settlements is different, then you will get a triple conversion and pay a decent percentage to the outlet. And even if the currencies are the same, the service charge the store charges is significantly higher than any transfer losses.
I tried to cover this difficult topic as clearly as possible and at the end I will give the main conclusions: Warn the bank that you are going abroad. Save your support contacts for quick help in an emergency. Bring several cards with you for different purposes. It will also allow you not to be left without funds if some of the cards are stolen or blocked. To reduce losses when transferring, use a card with an account in the currency of the country where you are going, or use a multi-currency option. Remember to control your spending so you don’t run into a negative balance. If possible, use a bank card to withdraw cash at the terminals of the bank or partners. Be sure to find out about the amounts allowed for withdrawal, for which no commission is charged.