– Before leaving, check what are the currency conversion costs imposed by the issuer of your credit card.
– Choose a card less greedy. There are exchange costs only 1.8% as there are cards which receive no currency conversion fees on purchases outside of America. The card has no annual fee and offers a cash rebate of 1% to 2%.
– Several American banks offer credit cards in Euro. That has the lowest annual fee (25 $ U.S or 0 $ if you spend more than 1,000 $ per year). You can pay the balance of the credit card from a European bank account where you have transferred a significant amount when the rate is advantageous.
– Abroad, limit the number of cash advances from your credit card. Most issuers charge a fee of 5$ in advance. If you make a withdrawal, it is more advantageous to take a large amount.
– Know that there is no grace period on cash advances. Thus, interest shall apply from the date of withdrawal and the interest rate is sometimes higher (up 22%). To avoid these interests, remove excess amount on your credit card before you leave. It is allowed. But it may be that the issuer will refund your money in case of fraud.
We should not “forget” money on your card, as many issuers impose a penalty of 10 $ to 25 $ on balances if the account is inactive for more than a year.
– Beware on refund: “If you decide to return a purchase made in a foreign currency, the dollar amount of your refund may be different from the amount of the original transaction”. The consumer returns a product may lose out because of currency fluctuations and conversion costs.