You Plan to Pay with: Credit Cards
Pros:
More bang for your, well, plastic. Credit-card companies, like ATM providers, give some of the best available daily exchange rates to their customers. (Capital One doesn’t even charge international fees, and other cards’ fees can sometimes be contested; see below.)
Protection. If your card is stolen and the thief goes on a spending spree, U.S. law protects you from paying fraudulent charges of more than $50. (And many companies won’t make you pay even that much.) You’ll enjoy the same protection if a travel deal turns out to be a scam or if a company goes bankrupt. Note: There is no such protection with debit cards; save them for ATMs only.
Cons:
Your credit-card company may cut you off. Before traveling overseas, call the card’s customer- service number to relay your itinerary. Otherwise, the card may be rejected because the international activity doesn’t fit your normal spending pattern. “You don’t want to deal with a rejected card at three o’clock in the morning when checking into a hotel,” says Peter Pincus, a business consultant to Latin American travel agents. (Take it from him: He flies 175,000 miles a year, but that hasn’t kept his card from being blocked.)
Credit cards aren’t accepted everywhere. Street vendors often won’t accept anything other than cash. “And it’s always a good idea to carry two cards, in case one is more widely accepted,” says author John DiScala. Visa and MasterCard tend to be the most widely accepted, while Discover Card and Diners Club have limited international recognition.
The Bottom Line: Charge wherever and whenever you can.
Tip: “When you return from your trip and receive your credit-card statement, call to question the international fees,” says Forest Aten, a clarinetist with the Dallas Opera who spends his off-season leading scuba-diving tours around the world. “In my experience, the customer-service representatives always reverse them.” Industry insiders say that some charges are sometimes dropped to make good customers happy, but it’s not an official policy.
