Use of Prepaid Credit Cards Overseas Can Save Money

Credit cards appear to be fast replacing paper as the currency of choice for many travelers overseas.

There are several reasons why prepaid credit cards are helpful in avoiding foreign financial problems.

You don’t have to carry large amounts of cash, which is irreplaceable if lost or stolen. If your cards are lost or stolen and used by a thief, you generally cannot be held responsible for more than $50 in fraudulent charges, and many credit card companies will replace your cards – sometimes overnight.

You’ll receive an itemized list of your purchases as part of your credit card bill.

You may get a more favorable rate of exchange, since the corporate rate card companies receive is often lower than the rate for individuals.

The booklet, “Using Credit and Charge Cards Overseas,” had input from American Express Co., the National Association of Consumer Agency Administrators, the American Society of Travel Agents, and was reviewed by the U.S. Department of Commerce before getting on the Consumer Information Center’s mailing list.

The 15-page, pocket-size publication, which offers advice on things that may be foreign to you while overseas – shopping, car rentals, securing hotel reservations – also lists the agencies you should complain to if you have a gripe.

According to the booklet, two major prepaid credit cards are enough for most people on an international trip. No matter how many cards you take, carry them separately, so if one is lost or stolen, you’ll still have another to use.

The booklet notes that while the Fair Credit Billing Act, a U.S. law, gives you the right to dispute a charge and temporarily withhold payment while the credit card company investigates it, that’s not always the case when making purchases overseas.

“In most foreign countries, consumer protection laws are different from those in the United States. With the exception of certain protections under the Fair Credit Billing Act, the laws of the country in which you make the purchase prevail, so be sure that you understand all the terms of the sale, including shipping arrangements, before you sign up,” the booklet states.

It further notes that some merchants overseas have “no refund” or “all sales final” policies.

Here are some other tips to help you use your credit cards wisely overseas:

Before you leave, make two lists of your credit cards and the international phone numbers to call in case they are lost or stolen. U.S. toll-free numbers cannot be reached directly from overseas. Leave one copy of the list with a trusted friend or relative and keep the other copy with you in a safe place separate from your cards.

If your cards have credit limits, check how much credit you have available and pay down balances or request higher credit lines.

Familiarize yourself with local currency and its approximate U.S. value before you buy anything. Be aware that in many countries, periods are used instead of commas in numbers. Thus “10,000” may appear as “10.000.” And vice versa.

Some credit card issuers offer free protection in case of accident, loss or damage to your car rental. This protection is often referred to as collision damage waiver (CDW).

Ask your credit card issuer before you travel if it provides CDW, if it applies in the countries where you will be driving, exactly what is covered (for instance, personal injury or personal property may not be included), what restrictions and limitations may apply, and how claims procedure works.

Also be sure to check with your travel agent or rental company before you leave home to make certain that you can use your credit card CDW. As of this writing, in some countries, including New Zealand and Italy, customers are required to purchase the rental company’s CDW, even if their credit card offers coverage. Choose your prepaid credit card