Security experts and credit specialists are cautioning Americans against using their credit cards liberally when travelling. According to them, the risk of fraud and identity theft is higher than ever before. They add that this risk skyrockets especially when credit cards are used abroad. Without any stringent regulations and authorities to immediately act on a complaint, cardholders may find it difficult to sort out problems. Analysts also explain that using cards abroad can mean hefty fees and charges when cardholders make use of other banks' services.
At present, banks often slap on a flat transaction fee ranging from $2 to $5 every time a client uses their ATM cards. An additional one to three percent is also charged for currency conversion. Most machines, especially in Europe, also impose a service charge. Most banks only charge one percent, though. However, the issuing banks can also ask for an additional one or two percent for foreign transaction fees or currency conversion. On average, Americans withdrawing cash through ATM machines can get charged five percent of the amount they are getting.
Travel experts strongly recommend asking banks and card companies about their fees and charges when their cards are used overseas. Some card issuers are starting to slap on additional fees and charges to reflect the companies' mounting credit losses. It may even be necessary to drop the card or get a new one that is fit for travel abroad.
According to industry sources, if banks charge a flat fee for every ATM transaction, it would be better to withdraw larger amounts. Some machines, however, limit the amount that can be withdrawn at a time. Multiple withdrawals on a single machine are possible, though.
Specialists also suggest paying with the local currency, instead of U.S. dollars. While some businesses would often ask American tourists to pay with dollars, the prices are most likely taken from the local exchange rate. Paying with cash also allows cardholders to avoid their banks from reporting any purchases or payments to credit bureaus.
Security experts are also warning Americans to be cautious when using credit cards to pay. Some shops are known for "skimming" cards and acquiring personal data from cardholders. With the card number and sensitive personal information, scam artists can charge unwanted purchases to the credit card. Opting for cards that make use of chip and PIN technology may help resolve security problems. These types of credit cards are starting to gain popularity because they offer more secured purchases and transactions.