How We Did It: Currency (Part 2)

This is Part 2 in a two-part series about using foreign currency. You can read Part 1 here.

Toronto, Canada
Credit cards are the best way to pay for purchases overseas. With the right card you’ll get a great rate on foreign transactions, earn valuable reward and get trip/fraud protection.

For our last trip I signed up for the $450/year Chase Sapphire Rewards Card. It was offering a 100,000 point bonus for spending $4,000 in the first three months. There were no foreign transaction fees, a $300 annual travel credit, Global Entry credit and it came with international lounge access, which I never valued until I admittedly got addicted. I’m not usually someone to go chasing sign-up bonuses, but this was too good to avoid.

Previously I was using the PenFed Platinum Rewards Card, which at least had 0% foreign fees and some cash back bonuses.

Not every card is going to have perks and if you're leery about signing up for a new card at least try to use a card in your wallet that doesn't knock you for international transactions.

Be sure to call your bank before making your first purchase of your trip to find out any fees. This includes tickets. I found this out the hard way when I used my U.S. Bank Cash+ card to buy tickets from Norwegian and SAS. Both transactions were in U.S. Dollars, but Norwegian charged my card from Oslo, which to U.S. Bank counts as an international transaction that warrants a fee on top of the currency fee! SAS charged me from Newark, NJ so there was no fee. Since you can’t be sure where an international airline is going to charge your card from, I now always use the card with 0% fees.

Sometimes, it can make sense to pay the fee. That’s because some credit cards offer valuable perks like free travel insurance like the Chase card. This is especially important when renting cars internationally. Your U.S. auto policy will only apply in the U.S., and sometimes Canada, but rarely anywhere else. Selecting a card with rental insurance can save you a lot of money rather than buying it from the rental agency.

Questions for your bank:
  • Are there foreign transaction fees and how much are they?
  • Are there any worthwhile perks such as rental car or travel insurance?
    • Is this automatically applied (usually yes if you deny all insurance from the rental company)?
  • What restrictions are there on coverage?
Some banks and issuers offer benefits that are generally worthless, but sound appealing. This includes services to find you hotel, dispatch a tow company or connect you to an embassy. Sure, in a real pinch I'll take all the help I can get. However you have to pay for these services and I find their rates aren't much better than what I can get on my own and a lot faster.
How We Did It: Currency (Part 2) How We Did It: Currency (Part 2) Reviewed by Brandon on April 25, 2017 Rating: 5

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