(1) Beware of foreign transaction fees
You almost always are going to be charged a foreign transaction fee when using your cards in the UK (or any other country too, for that matter). This fee varies by issuer, but most banks charge a 3% fee. So if you spent the equivalent of $1,000 USD while in London, there would be an extra charge of $30 (3%) on your credit card statement. When you consider that credit cards are much safer than cash, for many the 3% fee is worth it. But there are ways to pay a lower fee… or none at all! How? Well, Discover cards charge a 2% fee so that’s a bit cheaper (but acceptance will be limited). Then there’s one credit card company that charges no foreign transaction fee at all – Capital One. To be honest, I hate them, but they are the only issuer that doesn’t charge this fee. So if you travel to the UK a lot, you may want to consider a Capital One card solely for that purpose.
(2) Credit card acceptance is different
In the US, the major credit card companies are Visa, MasterCard, American Express, and Discover. However if you whip out your Discover card in the UK, the cashier may not know what it is! But that should be changing soon; Discover acquired Diners Club a couple years ago and starting this year, you will be able to use your Discover card at UK merchants that accept Diners Club (but that’s not widely accepted). The acceptance of American Express in the UK has grown quite a bit over the past decade, but it’s far from being universally accepted. Therefore you should definitely plan on bringing a Visa/MasterCard. In fact, bring a couple in case something happens to one.
(3) Notify your credit card company before your trip
If you haven’t left Ohio for five years and the next day you’re in Glasgow making a purchase, don’t be surprised if your transaction is declined. Why? Because it’s not normal for your spending pattern, so your bank will flag it as possible fraud. This can be a real headache if you’re trying to check into a hotel, pay for a taxi, etc. and your card isn’t working. So what you will want to do is call up your credit card company a couple days before traveling to let them know where you’re going. That way they will be expecting these overseas charges and will be much less likely to flag them as fraud.
(4) No “smart chips” can sometimes be a problem
Pretty much everywhere in the world (other than the United States) uses what are known as “smart chips” on their credit cards. These add an extra security measure; a four digit pin is encoded and it must be entered when the card is used (similar to an ATM card here in the states). The UK is a very tourist-friendly country so most places – like hotels and restaurants – should still be able to process your US credit card (which only has a magnetic strip). However there are some places where you may not be able to use them, particularly anywhere that has self-service payments (automated kiosks). For example, vending machines at regional rail stations, parking meters in parts of London, etc. For now there’s no easy solution for this problem. If an attendant is available they should be able to run your card manually. U.S. banks have tossed around the idea of issuing smart chip credit cards for cardholders that travel internationally, but so far that has not happened yet.
(5) Merchants may set minimum purchase amounts
In the United States, technically a merchant is not allowed to set a minimum purchase amount. For that reason, I use my travel rewards credit card even if I’m buying a candy bar, simply because I love earning my miles! However that won’t fly in the UK – merchants often set minimum transaction amounts if you’re going to pay with a card (like 20 euros, for example). So if you’re accustomed to using your card for tiny transactions, that might not always be possible.
No comments:
Post a Comment