Traveling With Credit Cards? What You Don’t Know Can Cost You

/ BY / Credit Cards

With summer right around the corner, many people are planning vacations. Traveling with credit cards has a number of advantages--they're more secure and convenient than cash, they're accepted all over the world, and if a card is stolen, you're not liable for the fraudulent charges.

If you’re planning a trip in the near future and plan to use credit cards for expenses, it’s important to be aware of a few things before you go:

Your card could be denied if you don’t notify your issuer.

Imagine how frustrating it would be if your card was denied while traveling, especially when you know it’s not at its limit and hasn’t expired. However, this very thing could happen if you fail to notify your card issuer where you’ll be traveling. Credit card companies often put a hold on accounts if a suspicious charge occurs. For example, let’s say you live in North Dakota and out of nowhere, your card shows charges in Mexico. This is seen as a red flag to your card issuer, who will often freeze your account to prevent any fraudulent charges.

While this is inconvenient, it is done for your own protection. You can avoid freezes by calling your credit card company before you travel and informing them that you will be out of the state or country.

Hotels and rental car companies can put a hold on your card.

It’s not uncommon (or illegal) for hotels, rental cars, and even restaurants and gas stations to put a hold on your account for more than you actually charge. This is done to ensure they get their money. For example, let’s say you rent a car for a week and the total is $200. The actual bill won’t be due until your car is returned, but the car company may put a $300 hold on your credit card.

A hold disappears within a few days, but in the meantime, it leaves you with less money or available credit. If you’re not careful, you could end up going over your limit without even knowing it. To get around this, travel with more than one card, and never use a debit card if the merchant is going to put a hold on your account.

Your card might have travel perks you don’t know about.

Even if the credit card you’re using isn’t a travel rewards card, it might have perks related to travel you don’t know about. For example, some credit cards offer free medical insurance if you become injured or ill while traveling. Or, your card may offer certain hotel perks, like free upgrades or breakfast, if the card company partners with the hotel.

To find out what sort of travel perks are available to you, contact each of your credit card companies (or visit their website), then travel with the card that offers the greatest benefits.

You may be subject to fees if traveling abroad.

While most overseas merchants will accept your credit card, they may not do it for free. Many credit card companies charge foreign transaction fees, either a flat rate or a percentage of the purchase. To avoid any surprising fees, contact your credit card company and ask what, if any, fees you can expect while traveling out of country. Once you know, make sure you budget accordingly.

Putting your travel purchases on a credit card is a convenient and safe way to travel. But it can also be a headache if you don’t know what to do beforehand. These tips will help your trip go smoothly.

If you travel frequently but don’t already have a travel rewards card, consider signing up for one. You can save quite a bit of money and enjoy free benefits in the process.

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Please note your financial situation is unique and our tips & advice presented here may not be appropriate for your situation. recommends that you seek different advice & opinions from your own accountant or financial adviser who understands your individual circumstances before making any important decisions or implementing any financial strategy.