International Credit Card Spending Less Rewarding Than Thought

​Summer vacations are only a few months away, and many Americans choose to travel internationally during their time off from work.  Most travelers take their credit cards with them when they go, but international credit card spending brings financial penalties, and yields fewer benefits than most people recognize.

Most credit cards include a foreign-transaction fee of 3 percent on every purchase made overseas.  The fee doesn’t seem like much of a penalty, but consider that on an item that costs approximately $4,000, an additional $120 is charged for making that purchase.  The transaction fees are even higher if withdrawals are made from foreign ATM machines.

One glaring misunderstanding about using credit cards in a foreign nation is that they offer protection comparable to insurance.  Damian Tysdal, founder of, says many people rely on a credit card’s “travel protection” clause in lieu of travel insurance.  However, Tysdal warns that using a credit card’s travel protection plan as a substitute for standard travel insurance is less beneficial than people realize.

“If you're the kind of person who is looking for travel insurance, it can be dangerous to say, 'I can just rely on my credit card.’”

A credit card travel protection plan is only available if the trip is purchased on the credit card, and lasts less than 30 days.  Canceling a trip is very difficult under a travel protection plan, while overseas medical care is unlikely to be covered at all, unlike with a standard travel insurance plan.

Also, if you plan to take a credit card overseas, inform your provider of the dates you will be traveling.  Credit card companies will flag unexpected foreign charges as a potential sign of fraud, which could suspend the card entirely.