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Credit Cards

Plastic Rules When Traveling Abroad

Is it better to use your credit or debit card overseas?

To keep from being nickel-and-dimed when spending overseas, first use credit cards to get a good deal on local currency. Plastic offers better exchange rates than banks because Visa, MasterCard and American Express use their size to push for the best deal.

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Most major credit-card issuers pass on a 1% fee Visa and MasterCard charge for currency conversion, plus they tack on a 2% fee for all foreign purchases. American Express charges a 2% fee on every credit-card purchase made outside the U.S. (Discover doesn't charge for currency conversion, but it is not widely accepted outside the U.S.) Capital One cards don't charge any fees for currency conversion, and the company absorbs the 1% fee that Visa and MasterCard impose.

Debit cards are best if you need cash from an ATM. You'll usually pay $2 to $4 more per transaction. But that's less than you'd pay if you used your credit card to get a cash advance.

Contact your bank and credit-card companies before you depart. To fight identify theft, an increasing number of banks and credit-card issuers will freeze your account if they suspect a card is stolen, especially if it's used in countries outside Western Europe.