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Indiana Department of Financial Institutions

DFI > Education > Education Information > Credit Information > Credit Cards > Using Credit & Charge Cards Overseas Using Credit & Charge Cards Overseas

Rare is the vacation without a hassle or two — minor, major, or somewhere in between. When your trip takes you overseas, problems, especially those involving money, seem to magnify. But you can avoid some financial worries by using credit and charge cards. A few advantages:

  • You won't have to carry large amounts of cash, which is irreplaceable if lost or stolen;
  • You'll receive an itemized list of your purchases as part of your credit card bill; and
  • You may get a more favorable exchange rate, since the corporate rate your card company receives is often lower than the rate for individuals.

And whether you pay by cash, check, or credit, you'll also find helpful tips below on shopping abroad and sending your purchases home, avoiding some foreign taxes and unnecessary rental car charges, and securing hotel and travel reservations.

Taking your credit cards with you on your next overseas trip can make traveling easier. You don't have to carry as much cash or get foreign currency you may not use, and you'll have a record of all your purchases. Most major credit cards are accepted worldwide, and in many countries credit cards are widely accepted. If your credit cards are lost or stolen and used by a thief, you generally cannot be held responsible for more than $50 in fraudulent charges. That makes carrying credit cards safer than carrying a lot of cash. Some credit card companies will replace your cards (sometimes overnight) if they are lost or stolen while you're traveling another plus.

Your Rights How Are You Protected?

The Fair Credit Billing Act, a U.S. law, offers procedures for handling certain types of problems you may encounter when you buy something with a credit card. Under this law, you have the right to dispute a charge and temporarily withhold payment for that charge while the credit card company investigates, if: The charge listed on your bill is in error or was not made by you, or by someone authorized by you to use the card. The charge is for goods or services which you or someone you designated rejected on reasonable grounds.

For example, if you refused to accept merchandise because it did not comply with the contract. The charge is for goods or services not delivered to you, or to someone you designate, as agreed. For example, the goods are different than what you ordered, delivered in the wrong quantity, or are delivered unreasonably late. In certain cases, accepting delivery of the goods while your charge is being investigated prevents the goods from becoming lost and may help you get a refund. Ask your credit card issuer for instructions before deciding whether or not to refuse delivery.

The Fair Credit Billing Act does apply to overseas purchases, which is one reason why you may choose to pay by credit card instead of cash or check. To dispute a charge under the Fair Credit Billing Act, you must write to your credit card issuer within sixty days of the postmark date of the bill on which the charge appeared. Complete instructions for disputing a charge are usually listed on your credit card bill. It is important to understand that the Fair Credit Billing Act does not guarantee you a refund every time you have a problem with items charged outside the United States.

In addition, that law does not cover cases where: you change your mind about a purchase and the merchant has a "no refund" policy or local law does not require giving a refund, or the merchandise you buy turns out to be worth less than you thought it was, or less than you paid.

There are other circumstances under the Fair Credit Billing Act where you can withhold payment when you are disputing the quality of goods or services bought with a credit card if:

  • the amount of the purchase is $50 or more,
  • the purchase was made in your home state or within 100 miles of your billing address, and
  • you made a good faith effort to resolve the problem with the merchant.

Since an overseas purchase would not, in most cases, be made within 100 miles of your billing address, you generally do not have this protection of the law when you are disputing the quality of goods or services you purchased overseas.

See Web Site on Credit Card Disputes.

How Much Does it Cost to Use a Credit Card Abroad?

When you make a purchase overseas, the credit card sales slip will usually be written in the currency of that country rather than U.S. dollars. Check your sales slip before you sign it to make sure you are being charged the correct amount. In many countries, periods are used instead of commas in numbers. Thus, 10,000 may appear as 10.000. In some countries, commas are used where in the U.S. we use periods. Thus, 32.50 may appear as 32,50.

Familiarize yourself with local currency and its approximate U.S. value before you buy anything. Your credit card company will convert the charge to U.S. dollars before it appears on your statement. Most credit card companies exchange money at rates which are generally more favorable than the rates you would get on your own. The currency conversion may take place days after your purchase, depending on when the merchant submits the charge to your credit card company and when it is processed. It's possible that the exchange rate could be less favorable at that time or it could be better.

Most credit card issuers charge a currency conversion fee (similar to the fee you may pay when you buy traveler's checks) that may be added to your bill with each foreign purchase. That fee is usually one percent of the purchase amount.

How Many Cards Should You Carry?

Two major credit cards will be enough for most people, although you may want to carry more on a long trip or if you plan to spend a lot. Leave behind any cards you won't be able to use in other countries, such as your local department store cards. If you do carry more than one credit card, carry them separately, so if one is lost or stolen you'll still have another one to use. While generally you can be held liable only for the first $50 in fraudulent charges for each card that is lost or stolen, contacting all your credit card companies could be a hassle if you lose a walletful of cards.

Guard your credit cards as carefully as you would cash. If you lose a card, contact the card issuer immediately. Before you leave, make a list of your credit cards and the international phone numbers to call in case they are lost or stolen. U.S. toll-free numbers cannot be reached directly from overseas, so make sure you have a number that can be reached from abroad. At the end of this brochure is a place for you to write down the phone numbers of your credit card issuers. Leave one copy of the list you make with a trusted friend or relative and keep the other copy with you, in a safe place separate from your cards. That way you'll be able to quickly contact your credit card companies for replacement cards if you lose yours.

If your cards have credit limits, check how much credit you have available and pay down balances or request higher credit limits if you need more. Shopping Overseas In most foreign countries, consumer protection laws are different from those in the U.S. With the exception of certain protections under the Fair Credit Billing Act, the laws of the country in which you make the purchase prevail, so be sure that you understand all the terms of the sale, including shipping arrangements, before you sign a sales slip. You may be surprised when you purchase items overseas to find that some merchants have "no refunds" or "all sales final" policies. In some countries no exchanges or refunds are normally given unless the merchant promised them in advance. Get refund or exchange policies in writing!

Use the following tips to help ensure that you'll still be happy with your purchases when you return home:

  • Keep your receipts and any documentation of purchases in a safe place. Overseas sales slips may just list a total purchase amount without a breakdown of the charges, so you may want to ask for an itemization of your purchases.
  • Ask specifically about return and exchange policies. These may not be posted and can be very different from the U.S., where many stores promise "satisfaction guaranteed." (If no policy is posted, you should assume no refunds or exchanges are allowed.) If the merchant agrees to accept returns or exchanges, get it in writing.
  • Also confirm who will pay shipping and customs fees in the case of returns. Without a written agreement that the merchant will pay these fees, they will be your responsibility.

U.S. Customs Policies

Before you travel, familiarize yourself with U.S. customs policies regarding prohibited and restricted items. Some items such as elephant ivory, fireworks, fur, leather, fruits and vegetables, or "pirated" music cassettes or computer software, may be prohibited or restricted by the U.S. Customs Department. In addition, some states prohibit the importation of certain types or amounts of liquor or agricultural items. Prohibited items may be confiscated and you may be subject to a fine if you try to bring them into the U.S.

For more information on prohibited or restricted items, refer to the U.S. Customs brochure, Know Before You Go. If you purchase an item with your credit card and are unable to bring it into the U.S., your credit card company is not obligated to give you a refund and will probably not be able to get one for you from the merchant. Also be aware that in some countries, items such as artwork may require an export license. This may incur additional fees.

Ask before you buy

Beware of prices that are "too good to be true" and merchandise that may be counterfeit. Some U.S. citizens have bought jewelry or expensive rugs or artwork overseas, only to find out they were not as valuable, or were of a lower grade or quality than they thought or than the merchant represented them to be. If value or originality is a key factor in your decision to purchase an item, make sure to get a professional, independent appraisal in writing before you buy gemstones, artwork, or any other expensive items.

If you buy anything valuable, get a complete written description of the item, including promises about origin, quality, grade or content, signed and dated by the store manager or owner. If you do not have complete documentation, you may have little recourse should the item prove to be less valuable than you thought. Even with documentation, your credit card company may not be able to get a refund for you.

Remember, the Fair Credit Billing Act usually does not protect you in disputes over the quality of goods or services bought overseas. If the merchant provides certificates of authenticity or appraisals, keep them with you as you travel. Do not have them shipped with the merchandise.

Shipping purchases to the U.S.

If you decide to have items you buy abroad shipped back to the U.S., get complete shipping details in writing from the merchant, including a shipping date, and how it will be shipped. Understand that if your purchase is shipped by boat, it may take a couple of months to receive.

To help your purchases survive the trip intact, ask the merchant to confirm in writing that your purchase will be packaged for shipping. Insurance can protect you in case your purchase is lost or damaged in shipping. Get written details of what is covered, including who will be responsible if the item arrives damaged or is lost, and instructions on what to do if that happens. If you don't have written confirmation and there is a problem with the shipment of your merchandise, your credit card company may not be able to secure a refund for you.

Duties or customs fees on items that are shipped back to the U.S. are your responsibility, not the merchant's. If you later return an item, the merchant is unlikely to refund those fees.

V.A.T. Refunds

In some countries, especially in Europe, you can get a refund of Value Added Tax (VAT) you paid on items or services purchased there. (A value added tax is similar to a sales tax.) You may want to contact the embassy of the country to which you're going for information on this tax before you leave. If you think you may be entitled to a VAT refund, you must normally apply for the refund before you leave the country where you bought the items. You may be able to get VAT forms from the stores where you bought your purchases, or you can get them at the airport or train terminal. You must get the forms stamped by the Foreign Customs Officer at the airport or train terminal. VAT taxes may be refunded on your credit card or by check, depending on the policy of the store where you bought the item.

Automobile Rentals

Many travelers prefer to pay for rental cars with credit cards. In fact, if you don't have a major credit card, you may find that some car rental companies will not rent you a car, or will require a large cash deposit to cover any potential damage. Are you covered? You may even save money when you rent a car using a credit card, since some credit card issuers offer free protection in case of accident, loss or damage to the car. This protection, often referred to as collision damage waiver (CDW), is not usually insurance, but is an agreement under which you won't be liable for the loss or damage as long as you comply with certain conditions.

Some credit cards offer primary protection, which pays for damage or loss without requiring you to first file a claim with your personal auto insurance coverage. Others may provide secondary protection, which covers any damage or loss left unpaid after you have made a claim to your auto insurance company. Many auto rental companies sell CDW protection for fees at daily rates which can add up depending on the duration of your rental. If you have adequate protection through your credit card issuer and/or under your own auto insurance policy, you may not need to purchase the rental company's CDW unless the country you are driving in requires you to do so.

If you do not purchase the rental company's CDW, be sure you clearly decline it when you sign the rental contract. Ask your credit card issuer before you travel if it provides CDW, if it applies in the countries where you will be driving, exactly what is covered (for instance, personal injury or personal property may not be included), what restrictions and limitations may apply, and how the claims procedure works.

Check with your travel agent or the rental company before you travel to make sure you can use your credit card CDW. Not all rental companies accept credit card CDW, and in some countries, such as New Zealand and Italy, as of this writing, customers are required to purchase the rental company's CDW, even if their credit card offers coverage. If you violate the car rental agreement, the CDW may not cover you. For example, if you have an accident in a country in which your car rental agreement prohibits you from driving. Some additional tips for renting cars overseas:

  • Ask your travel agent before you leave if you will need an international driver's permit to drive in the countries you're visiting.
  • When you rent a car, the rental company may place a "hold" on your credit card for anticipated charges, plus incidentals. The amount of the hold is "frozen," which means you'll have less credit available for other purchases. Ask the clerk how much the hold will be and when it will be removed. To avoid tying up your credit line, you may want to use one credit card for car rentals and hotels, and another for daily purchases. This may be less of a problem with cards that do not have credit limits.
  • If you purchase pre-paid vouchers for car rentals, keep copies of them for your records, ask for confirmation from the travel agency that the rental company was paid for the voucher, and ask for a receipt from the clerk when you present the voucher. Keep in mind that these vouchers may not cover all charges (taxes, re-fueling, or CDW, for example), or may not cover additional fees if you change your reservations (such as the location or date of pick-up).
  • Report any problems with the car to the rental agency immediately and keep a record of who you spoke with. It's best to try to resolve any problems on-site before you leave. If you wait until you return to the U.S., you may find it difficult or impossible to resolve the problem to your satisfaction. Try to report any accidents or damages to the car rental company and your credit card issuer (if you're using the credit card CDW) within 24 hours. Take pictures of the damage, if possible.
  • If your plans change and you want to keep the car for a shorter or longer period of time than you had agreed, get details in writing about extra charges such as mileage, daily charges, or drop-off fees.
  • Avoid dropping off your car at the last minute. Return it early enough to allow time for inspection and to resolve any billing problems or questions. If you drop off the car and fail to get an inspection, it may be difficult to prove what damage is yours, and what occurred after you dropped off the car.

Lodging - Where will you stay?

A four-star hotel in Manhattan may mean something very different than a four-star hotel in Moscow. Ask your travel agent or the hotel for very specific information about your accommodations: will you have a private bath? Is there a shower, bathtub or both? How luxurious or basic are the rooms? if a continental breakfast or other meals are included in the package, make sure you understand what that means.

If you're offered an "ocean view" don't assume that means your room will be right on the beach. The laws in many foreign countries hold you liable for charges if you make a hotel reservation, then don't show or cancel. Make sure you understand refund or cancellation policies before you make your reservations.

Once you do make reservations, get written confirmation from your travel agent or the hotel before you leave. If your plans change and you will arrive later than you had planned, call the hotel. Otherwise, they may give your room away, thinking you are not going to show up. If you cancel your reservations, get a cancellation number. If you purchase pre-paid vouchers for lodging, keep copies of them for your records, ask for confirmation from the travel agency that the hotel was paid for the voucher, and ask for a receipt from the hotel when you present the voucher.

Some additional tips for avoiding lodging problems overseas:

  • When you check in, the clerk may request your credit card and place a "hold" on the card for anticipated charges, plus incidentals. Ask the clerk how much the hold will be and when it will be removed. To avoid tying up your credit line, you may want to use one credit card for hotel and car rentals, and another for daily purchases. This may be less of a problem with cards that do not have credit limits.
  • Notify the management immediately if you are dissatisfied with your room or services. Get any changes to your accommodations in writing. If your room is uninhabitable and you can't get the hotel to change it, try to get a cancellation receipt from the manager and leave the hotel. If not, you may want to consider finding other accommodations anyway, because if you stay you may find it impossible to get a refund when you return to the U.S. (Keep in mind that even if you leave you may not be able to obtain a full refund from the hotel unless you have a cancellation receipt.)
  • Ask the hotel about rates if you plan to use the phone in your room. Calls from a hotel phone may be double or triple the usual rates. It may be less expensive to use pay phones or your calling card instead. (Some hotels. however, do charge a fee for using your calling card.) Call your long distance carrier before you leave for information about rates and instructions for placing calls overseas. When you check out, ask for and review an itemization of your bill, including phone calls.
  • If you gave the hotel your credit card when you checked in, but decide to pay with cash instead, ask the clerk to return the sales slip that was prepared when you checked in. Do not leave until you get a dated cash receipt with the manager's signature.
  • Allow plenty of time for check-out. If you wait until the last minute, you may not have time to inspect your bill and resolve any problems. It is extremely difficult to resolve disputes after returning to the U.S.

Airline Travel

Follow these tips to help ensure you'll get to your overseas destination as planned: When you buy an airline ticket, ask whether or not the ticket is refundable, and if any fees apply for changes. Protect your airline ticket, since lost tickets are very similar to lost money. If you've purchased an airline ticket and the airline goes out of business, you may be able to get a flight on another airline at no extra charge. If you can't get a flight on another airline, call your credit card company immediately. Some card companies will give you a refund if you purchased a ticket with their card.

Keep your ticket in a safe place since the credit card company may ask you to send it to them for a refund. If they do, send it by certified mail, return receipt requested. Confirm your departure with the airline at least 48 hours before you leave and your return flight at least 48 hours before your return.

Arrive at the airport early, within the time frame suggested on your ticket. If you arrive too late and the flight is overbooked, you may not get a seat on your flight, even if you're holding a ticket. Overseas flights often require extra time for customs inspections and immigration checks. Consider buying travel insurance in case you have to cancel your trip. Check with your travel agent for more information.

Also check your health insurance to find out if it covers you overseas. If not, you may want to purchase coverage.

More information and help

For more information on customs regulations and restrictions on items that can be brought into the U.S., order: Know Before You Go, U.S. Customs Service P.O. Box 7474 Washington, D.C. 20044

For information about bringing food, plant and animal products into the U.S., order: Traveler's Tips, U.S. Department of Agriculture/APHIS MSD DMB 6505 Belcrest Rd. Room G110 Federal Building Hyattsville, MD 20782.

The Consumer Information Center offers a number of free or low-cost brochures on travel topics. For a free catalog, write to: Consumer Information Catalog Pueblo, CO 81009

Resolving Disputes

If you have a problem with your credit card company, ask to speak with that company's consumer affairs professional or contact a consumer advocacy organization. These are listed in the FTC's Consumer's Resource Handbook, which also offers helpful guidelines for resolving problems. Single copies of the handbook are available by writing: Handbook Consumer Information Center Pueblo, CO 81009

To file a complaint about an overseas merchant after you return to the U.S., contact the embassy or consulate of the country where the problem occurred. To locate those offices call the Department of State at (202) 647-6575 or consult a copy of The Diplomatic List, a Department of State publication available in most libraries, or by writing: The Superintendent of Documents P.O. Box 371954 Pittsburgh, PA 15250-7954 (202) 512-1800 Publication #: 744-004-00000-4 Cost: $8.50 for a one-year subscription

For advice and assistance in resolving travel-related disputes, you may want to contact your state or local consumer protection office. Look in the "government pages" of your phone book for listings. You can also file complaints with the following federal government agencies. While they usually do not help resolve individual problems, they can take action against a travel service provider if they notice a pattern of complaints.

If you have an airline service problem, contact: Aviation Consumer Protection Office US Department of Transportation C-75 Washington, D.C. 20590 (202) 366-2220. I

If you have a cruise line problem, contact: Office of Informal Inquiries and Complaints Federal Maritime Commission 800 N. Capitol Street, N.W. Washington, D.C. 20573 (202) 523-5807

Important Travel Information

Look on the back of your credit cards for a customer service telephone number for international calls. If one is not specifically listed, call your credit card issuer. Write these numbers down.

  • Credit Card Issuer: Telephone #__________________
  • Travel Agent: Telephone #__________________
  • Insurance Companies Telephone #__________________(auto, health, property)

See other Web Sites on Credit Cards.