A trip overseas that started off great with the purchase of cheap airplane tickets and discount hotel rooms or cheap vacation packages can quickly become filled with problems unless travelers are aware up front of potential challenges they may face when trying to use their credit cards outside the U.S.
To fight credit card fraud, it is common these days for credit card companies to freeze your account as soon as a credit card charges comes in from a foreign country. Banks utilize antifraud software that follows customers spending habits. If you are going to be traveling to a different country or to another part of the U.S., it is smart to notify your credit card company in advance of your trip.
Many countries in Europe, Canada, Japan, Mexico and other nations are using a type of credit card that has a chip imbedded in the card and requires the user to enter a PIN. American credit cards have a magnetic stripe on the back of the card. Many stores in foreign countries do not accept U.S. credit cards or will accept them if the customer waits in special, often long lines, to get the purchase approved.
A recent survey determined that almost half of American cardholders traveling abroad over the last couple of years have experienced a problem using a debit or credit card, with 16 percent saying their card was rejected because their cards had magnetic stripes. The alternative is to bring a combination of cash and travelers checks so that you will be able to pay in cases your credit card is not accepted.
Another option will soon be available. The United Nations Federal Credit Union, is planning on offering its members credit cards with both a magnetic stripe and a chip by October. Visa and MasterCard are working with issuers of their cards to consider the feasibility of offering special credit cards with chip technology for customers who travel internationally.
Many customers credit card limits have been lowered as a result of the recession and bank problems. You should review your card limit prior to traveling and request an increase, if needed.
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