Credit Cards for Overseas Use: What You Need to Know?

When traveling abroad, one of the most useful financial tools is a credit card.

If you are not a heavy credit card user and are more comfortable making payments abroad with cash, a credit card may come in handy during emergencies that require you to use a budget beyond your means.

For those who like to use credit cards, spending using credit cards abroad also provides various unique benefits such as cash back, reward points and various other benefits.

However, it should be noted that using a credit card abroad can be very easy and safe, but without careful preparation, it can bring various problems such as hidden charges, transaction restrictions, or the risk of fraud.

Importance of Overseas Credit Cards

Overseas credit cards allow you to make payments without having to carry a lot of cash.

It is also widely accepted in hotels, restaurants, grocery stores, and international shopping malls.

• All expenses are recorded, making budget management easier.
• Safer than carrying cash.
• Easy to use at global payment terminals.

Understanding Charges and Fees Associated with International Credit Cards

This is the most basic thing and often surprises users.

Most credit cards charge certain fees for international transactions.

In addition to the markup on the exchange rate, most credit cards charge an additional service fee, usually between 1% and 3% of the transaction amount.

For example, if you shop RM1000 abroad and the transaction fee is 2%, you will be charged an additional RM20 for the transaction.

It is the combination of exchange rate markups and fees that make the actual cost of your transaction higher.

Also, banks or credit card companies don’t use the foreign exchange market rates you see on Google or at the airport.

Instead, they use their own rates, which often include a markup of around 1% to 3% commonly called the “foreign exchange rate”.

Safety Measures Before and During Travel

Security is paramount when using any overseas credit card.

Use your bank’s mobile application to monitor transactions in real-time and if you see any suspicious transactions, report them immediately to the bank.

Inform the bank before departure to inform about your destination and date of travel and this is the most critical step.

Otherwise, the bank’s security system may suspect suspicious activity and block your card, leaving you without access to funds mid-trip.

Keep your bank’s international customer service phone number in a separate place from your wallet. If your card is lost or stolen, you should contact them immediately to block the card.

When withdrawing cash (cash advance), choose an ATM located inside the bank or in a busy and well-lit area.

Avoid ATMs that look broken or in remote locations and be aware, cash withdrawals by credit card usually incur high fees and interest charges that start to accrue immediately.

Most developed countries have widely used contactless payment and it is not only fast but also safer because your card information is encrypted.

Popular Overseas Credit Cards in Malaysia

Each credit card has its own advantages and benefits and here are some overseas credit cards that are popular and suitable for Malaysian tourists:

• CIMB World Mastercard: Cashback for overseas transactions.
• RHB Travel Credit Card: Cashback on hotels and flights.
• Maybank Visa Signature: No international transaction fees, free travel insurance.
• HSBC Premier Travel Card: Reward flight points and international lounge access.
• Public Bank Visa Platinum: Travel insurance coverage and competitive exchange rates.

Related article: 5 Credit Cards For Salaries of RM3000 and Below

Using an overseas credit card is like having a smart financial tool in your wallet.

By understanding the charges involved, choosing the right card, and adopting proactive security measures, you can make your overseas shopping and spending experience seamless, secure, and cost-effective.

Careful planning before departure not only saves you money from unwanted charges but also gives you peace of mind, allowing you to fully concentrate on enjoying the beauty of your destination.