I thought you would be interested in this article that I found on MSN from iMoney:
What You Are Paying For When You Swipe Your Credit Card Overseas?
Source - iMoney
If you're taking a trip abroad, credit cards can be the best and safest way to pay for travel costs. Armed with a credit card, you won't really have to deal with converting currency manually and travelling around with cash on hand. Pick pockets will be less of a threat not only because credit cards are easier to conceal. Even if your card is stolen, you would most probably not lose any money. You just need to report your card missing and you'd be off the hook for any unauthorised purchases. Still, the act of simply using a credit card does not in itself make overseas spending cheaper. You must be aware of the costs that tag along to truly make that goal a reality. If you're planning an overseas trip – be it for business or for leisure – always double-check with your credit card issuers to find out all the hidden costs and charges when you use your card in other countries. Here are what you will be paying for: 1. Overseas conversion fee Cards charge fees for transactions made abroad. Overseas conversion fees vary by issuer, but can be as high as 3% of the amount transacted. This can result in you paying significantly more than the listed price of anything you purchase overseas. Though 3% may seem like a small bite, but it can really add up over the course of a vacation. Let's say you charge £4,000 (RM25,422) to your card on hotels, taxis, restaurants and other expenses as you roam around London. Foreign transaction fees would nail an additional cost of £120 (RM763). That's probably enough for a two-way ticket for another vacation nearby with a budget airline. 2. Currency conversion Some of us may have trouble converting currencies especially when we are shopping. Foreign merchants take advantage of this fact at the checkout counter by offering to quote the final price in foreign currency and make that conversion at an uncompetitive exchange rate. Avoiding these unnecessary costs is quite simple. All you must do is refuse to sign any receipt not expressed in the local currency. If you're worried about deciphering the cost of meals and other purchases during your trip, just brush up on conversion rates before leaving or download currency converter apps like Easy Currency Converter, XE Currency & All Currency Converter to your phone for easy conversion. When using your credit card for a transaction made outside Malaysia, the amount will be converted to US dollars, and then converted to Ringgit again on the date the transaction is processed by the Bank. The rate of exchange on the date of such posting may differ from the rate of exchange in effect on the date of transaction. The exchange rates may vary according to market fluctuations. Any rate imposed is final and all exchange rate risks would be borne by the cardholder. 3. Cash advance fees on ATM overseas A credit card cash advance is readily available if you withdraw cash on an ATM overseas using your credit card. However, a cash advance from an ATM will usually carry a fee of 5% per transaction. On top of this fee, you will be charged the highest annual interest rate the bank offers (usually 17-18%). Let's say you withdraw £4,000 (RM25,422) on your card for hotels, taxis, restaurants and other expenses as you roam around London, credit card cash advance fees would nail an additional cost of £200 (RM1,271). Before you travel, find out what are the fees charged for all foreign transactions and how much it would cost you. Here's a summary: [table id=223 /] *Based on foreign exchange rate as at January 4, 2015 is £1 = RM6.36 Sometimes, these are not easily found on a card issuer's website or on credit card statements. You can check with your card's customer service department if you are not sure. Convenience is worth a price. If left unmanaged these fees and charges can pile up, but it is undeniable that with these services, making purchases overseas become so much more convenient. The only thing cardholders can really do is find out the fees in advance so they can determine the best cards to use and budget appropriately. Doing otherwise can get pretty expensive. Image from oregionalpr.com.br Travel cashless with ease with Maybank 2 Cards and enjoy 5x TreatPoints on all your overseas spending. Find out more! The post What You Are Paying For When You Swipe Your Credit Card Overseas? appeared first on iMoney Malaysia.