Skip to main content
Ratehub logo
Ratehub logo

Mistakes to avoid when using your credit card overseas

If you’re travelling anytime soon, you might be planning to use a credit card to make most of your purchases.

That’s a wise choice. Credit cards are easier and safer than cash while travelling. You can probably access more money with your credit card than you’d be willing to bring in cash. A lost or stolen credit card is much easier to deal with. And even while you’re travelling your purchases will help you earn points toward your next trip.

But credit cards aren’t foolproof, even while on vacation. If you’re planning to bring your credit card next time you’re overseas, avoid making these mistakes:

1. Paying twice for insurance

Everyone’s eager to sell you insurance when you book travel, from the website to the airline to the car rental company and beyond. But the best travel credit cards in Canada all offer great insurance when you book your travel on your credit card. Before you buy costly additional coverage, check your credit card to see if it offers what you need. Trip cancellation insurance, rental car insurance, travel medical insurance, and coverage for lost or delayed baggage are just a few types of credit card travel insurance your card might offer.

2. Losing track of your spending

When you’re on vacation, you might feel like you have a license to spend. And if you’re planning to pay for the majority of your purchases with your credit card, it can be easy to lose track of how much you’re spending. Before you travel, think about the types of expenses you’ll have (such as meals, transportation, souvenirs) and make a daily budget for each. Make a plan to keep yourself accountable, too. Get a travel budgeting app on your phone or put a note in your wallet with your pre-defined spending limits. You might also plan a small reward for yourself for staying on track, such as upgrading seats on your flight home.

3. Not using a foreign transaction fee credit card

You can’t control the exchange rate, but what you can control is whether you pay an additional premium for making transactions in a foreign currency. Standard credit cards charge around 2-3% for the privilege, meaning you’ll pay $20-30 in fees for every $1,000 you spend on your credit card overseas. Avoid making this mistake and choose a Canadian credit card with no foreign transaction fee to save money on your international purchases. It might be worth carrying a second credit card just for this purpose. Use a high-end travel rewards card for everyday purchases and booking travel, and a no-fee card like the Home Trust Preferred Visa for making purchases while overseas.

Card details

  • No annual fee
  • No foreign transaction fees when using the card overseas
  • Earn 1% cash back on all purchases in Canada
  • Free car rental collision/loss damage insurance
  • Not available in Quebec

4. Forgetting about the perks

Many credit cards offer additional travel perks that you might not be aware of. For example, some of the best Aeroplan credit cards offer perks for Air Canada travellers including no first checked bag free, priority check-in, priority boarding, and an annual One-Time Guest Pass to the Maple Leaf Lounge when booking your flight on miles. Your credit card might also offer discounts on hotels, car rentals, and vacation packages. Some credit cards also offer concierge services that can help you book hotel rooms, make dinner reservations, and take care of little things you might have forgotten (or would just rather not do yourself).

5. Not using your points when booking flights

It feels good to build up as many points as you can, but when you do so you’re actually leaving money on the table. Credit card rewards points lose their value over time – both due to active devaluation by the companies offering them, and through inflation. Plus, the money you spend on travel could be subject to interest if you borrow it, and could be invested and earning interest elsewhere. A hundred dollars worth of points won’t buy as much travel next year as it will today, so don’t wait to cash in your points if you’re booking travel.

6. Taking out a cash advance

There’s nothing worse than being stuck without money in a foreign country. Even if you have the best travel credit card, you will still want to pack some cash for your next big trip. But if you use your credit card to take out that cash advance, it will cost you. Cash advances charge a higher rate of interest from the day you withdraw the money. And if you carry a balance on your credit card, your cash advance will be the last item paid off. You’re better off paying with your credit card or withdrawing the cash you need from your bank account before you leave home.

7. Not notifying your bank

Fraud detection has gotten much better in recent years and it’s not always necessary to notify your bank before your travel anymore – but, you should double check to be safe. If you’re planning to travel outside of Canada or make purchases you don’t typically make, letting your bank know ahead of time can save you a big headache while you’re overseas.