Whether you are doing business in an increasingly interconnected world, simply going on a holiday with family and friends or embarking on that much anticipated shopping experience, there is something very exhilarating and adventurous about travelling abroad.
But before you go, think about how you're going to pay for everything once you've arrived at your destination. Should you use a credit or debit card or cash, and what about traveller's cheques?
While credit cards are accepted at many million locations worldwide, there still may be times when cash is your only payment option. However, you should be cautious of carrying too much cash around. Despite the rather ingenious methods people have created, such as hiding cash throughout their luggage or on their bodies, cash can nevertheless be lost or stolen. And if it is, it cannot be replaced, like a card. Carrying a credit or debit card is, therefore, much safer than carrying cash or travellers cheques.
If you hold a MasterCard, for instance, you would have the protection of the MasterCard "zero liability" policy. To qualify for zero liability protection, you must meet certain conditions including having exercised vigilant care in safeguarding your card and immediately notifying your issuing bank of the loss, theft or unauthorised use of your card.
This apart here is a simple list of tips for travellers using their credit or debit cards abroad:
- Before you leave, check the expiry date and credit limit of your card. You don't want to arrive at your destination and find that your card has either expired or reached its limit. Also, if you find that you're near your limit, you might be able to increase it through your bank.
- Contact the bank that issued your card and let them know where and when you'll be travelling. This is strongly advised so that the bank is aware that overseas transactions will be made. The unfamiliar spending patterns could cause your bank to suspect that your card is being used fraudulently and thus delay your card purchase approvals.
- While you have your bank on the phone, ask if you need to change your PIN number so that it will work in the country you're visiting, as some foreign ATMs often only accept four-digit PIN numbers. If it turns out you that you do need to change it, ask how to go about doing so.
- Make several photocopies of the front and the back of the credit and debit cards that you'll be taking with you on your trip. Leave one copy with a relative or friend back home and carry the other with you. Also write down your bank's emergency contact information. This way, if your card is lost or stolen, you can quickly provide your bank with all the necessary information needed to have it cancelled. Better still, contact MasterCard Global Services directly who will put you in touch with your bank.
- When making purchases, ask whether your card will be charged in the foreign currency or in your country's currency. An increasing number of merchants are equipped to convert the cost of a transaction to the cardholder's own currency, but they often will impose an additional service fee or use an exchange rate inferior to that used by the credit card companies.
- Consider taking more than one credit/debit card with you. You'll want to keep them in different places. This way, if one is lost or stolen, you'll have a backup.
- If your card is lost or stolen, you can cancel it and the money remains in your account, provided whoever stole your card didn't use it before you were able to phone your bank and cancel the card. With cash, if it's gone, it's gone for good and cannot be traced.
- If you use a credit card to book a hotel or hire a car, the company may put a hold on your account for the total amount of your expected bill. This could be an inconvenience, especially if it ties up your entire credit card limit. Again, a second credit card might come in handy. Do make sure, though, that the company removes this hold once you've paid the bill.
- Some banks offer you free travel insurance if you pay for your overseas flights with your credit card. This means that you are covered in the unfortunate event of a medical emergency, trip cancellation or baggage losses.
It is advisable that you double check what your insurance covers and whether you will need additional top-up coverage, as most banks offer a basic travel insurance package.
It is of little wonder, then, that credit and debit cards have come to be regarded as the best way to pay for expenses while travelling abroad.