While having a stash of cash is always necessary, it’s also convenient to be able to reserve rooms and pay for the occasional item using your Mastercard or Visa. Be careful though; some (if not most) credit card companies will charge you a premium for using their card in a foreign country. Mastercard and Visa, for instance, charges a 1% “currency conversion” fee for each foreign purchase. And often times the issuer will tack on additional charges — usually 2% — for the convenience of using their card while traveling. This brings the total charge up to 3% for each purchase. It can add up.
Bankrate.com has a handy chart that shows what sort of additional charges you can expect from major banks. Most end up hitting you with 3% on top of your total purchase price. There are a few banks, however, that go as far as waving all fees, making a foreign purchase the same as a local one. If you’re traveling long term, it might be a good idea to go with one of those banks.
I’m lucky. My bank (USAA) doesn’t charge any additional fees, so I only get hit with the1% conversion fee from Mastercard. [via]