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Which Credit and Debit Cards are Best for Overseas Use?

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If you plan to travel overseas for your upcoming holiday, be sure to have the best credit or debit cards with you, to avoid startling statements when you return. Do you know that the wrong card can add nearly $100 or more to your holiday cost? Thus, having the right credit or debit cards is very important when trying to stay within your original holiday budget.

Are you aware that whenever you use your credit or debit card overseas to withdraw cash or to make a purchase, you are charged with an exchange-rate loading fee? Visa and Mastercard international networks add a 1% conversion fee and most banks in the US add their own 2% fee, charging you a total 3%.

Moreover, when you use an ATM or a debit card to withdraw cash outside the country, your bank adds a $5 withdrawal fee and a 3% conversion fee. On the other hand, you typically lose anywhere from 5% to 10% in conversion fees and charges when using traveler’s checks. Therefore, we still advise that you use credit cards when making large purchases and debit cards when withdrawing cash.

To help you find the best credit and debit cards for overseas use, we’ve gathered some basic information that you should consider, especially when you are planning to go abroad.

Comparing Charges of Credit and Debit Cards

Your choice of credit and debit cards depends on different factors. These may include rewards, annual percentage rate, annual fee, billing cycles, and costs related to foreign use. Because of the many things to consider, we will just concentrate on foreign charges.

You need to be aware that when you use your credit cards outside the US, your charges are normally based on the currency of the country you are in. When these charges are passed on to your bank, your bank then applies its own surcharges to the standard 1% fee that the international networks charge you. To give you an idea, here are a few large credit and debit card issuers and their current charges:

Credit Card Issuers and Their Current Charges
1. American Express: 2.7%
2. Bank of America: 3%
3. Barclaycard/Juniper: 2–3%
4. Capital One: 0%
5. Citibank/Diners: 3%
6. Diners Club: 3%
7. HSBC: 3%
8. JP Morgan Chase: 3%
9. US Bank: 3%
10. USAA: 1%
11. Wells Fargo: 3%

Debit Card Issuers and Their Withdrawal Fee and Conversion Fee
1. Bank of America(a): $0/0%
2. Bank of America: $5/1%
3. Citibank: $1.50/1%
4. Citibank(b): $0/1%
5. JP Morgan Chase: $3/3%
6. US Bank: $2/1%
7. USAA: $0/1%
8. Wells Fargo: $5/0%

Using Debit Cards to Make Purchases

Since most debit cards are Visa or MasterCard branded, you can use them for shopping and for withdrawing cash. However, when you use your debit card to make purchases, most US banks subject you to the same charges as with credit card purchases. However, HSBC adds only 1% for its debit card transactions as opposed to its usual 3%.

The Bottom Line

With all of the information provided above, the bottom line is, although you are charged for using of your credit or debit cards abroad, doing so is still more practical than other means such as travelers’ checks and currency. Just be aware of the charges imposed by your bank. Understand the best credit or debit cards for overseas use by asking your card issuers for charge details.

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