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Credit and debit card tips for travel

Key takeaways

  • Using credit cards for vacation expenses could help you save money with perks and fraud protection.
  • Use debit cards that let you withdraw money with low or no fees while traveling. Some debit cards even reimburse ATM fees worldwide.
  • If traveling out of the country, consider credit cards that don't charge a foreign transaction fee.
 

Cash may not always be the best bet for spending when traveling, whether it's in the US or internationally. Carrying a wallet full of cash can be risky—if your wallet is stolen or lost, the chances of getting your money back are slim.

Using your debit or credit cards can be the safest and most cost-effective way to pay worldwide. It may take some planning ahead, though, to avoid fees. Whether you pay with a debit card or use a credit card, plan ahead so you don't end up paying more than necessary.

Fraud protection when traveling with credit and debit cards

Credit cards come with some advantages when traveling—federal law protects you against unauthorized charges. The law limits your liability to $50 but many credit card issuers offer zero-liability protection.

That protection extends to payments made with a phone (aka digital wallet), online and at physical terminals as well. If you have a credit or debit card linked to your phone, you have another convenient and secure way to pay.

When traveling, don't keep all of your cards in one spot with your cash, in case a bag or wallet is lost. Write down some important phone numbers just in case something happens to your phone. When using a debit card, look out for unknown charges and report them right away to be fully protected from fraud.

Debit cards also offer fraud protection, but you must act fast once you spot something amiss. Reporting fraud within 2 business days limits your liability to $50. Any longer and you could be liable for $500 of the charges—and if it's more than 60 days after receiving your statement, you may not have any recourse and might not recoup your loss.

To protect yourself, setting up alerts can help you manage your cards and stay connected to your accounts 24/7. As soon as a purchase is made, a text or email notification can alert you to the activity.

Traveling with a credit card

Before you travel, find out if your card issuer prefers to be notified of your travel plans—not all do, these days. To set a travel alert, call the toll-free number on the back of your card or log in to the website to let the card issuer know where you're traveling. Doing so will reduce the chance of your transactions being flagged as unusual and possibly declined.

Credit cards can be useful when traveling, they offer strong fraud protection and many issuers provide zero liability to card holders. See if your card offers any travel perks like airport lounge access. Do check to see if your card issuer needs to be notified about your travel plans, not all do anymore.

Security against fraud is key, but a secondary benefit of using credit cards is the perks. If you use your credit card to book travel, there may be some benefits offered that could help with your trip. Coverage and benefits vary across cards, so it can make sense to research what's out there if you have time:

  • Emergency card replacement and emergency cash disbursement
  • Travel insurance
  • Travel accident insurance
  • Lost luggage reimbursement
  • Roadside assistance
  • Travel and emergency assistance services
  • Car rental insurance

If you're traveling by air, some credit cards can even get you access to airport lounges—though these cards typically come with an annual fee.

Using credit cards internationally

If you're traveling internationally, credit cards may be able to help you save money converting dollars to the local currency. Purchases made with a credit card typically get a much better exchange rate than you can get from a currency exchange vendor or banks because your card issuer offers close to the best rate available as it's set by the major networks, Visa® and Mastercard®. Those 2 payment networks facilitate payments around the world between businesses, banks, and consumers. There are other networks including Discover® and American Express® but Visa and Mastercard are more widely accepted.

A potentially more expensive option for making purchases when traveling is Dynamic Currency Conversion (DCC). With DCC, merchants or banks can process a transaction in the customer's home currency for an added fee.

The service is often touted as a convenience to customers by allowing them to see exactly what they're paying at the time of the transaction rather than having to wait for the charge to post online or show up in a monthly credit card statement, but many experts feel that it is simply another way for banks and merchants to charge additional fees to unsuspecting customers.

Using a credit card can help you get a good exchange rate if you're traveling abroad. Do be aware of network and foreign transaction fees. Some credit cards do not have a foreign transaction fee--like the Fidelity Rewards Visa Signature Card.

But there are some other costs to keep an eye out for as well. A network fee may be charged, depending on the policies and features of your credit card. Credit card networks charge the fee to your bank and the cost is generally added to your purchase.

That is typically included in the total foreign transaction fee charged by your card, up to 3% of each purchase. That can add up. If you shop around ahead of time for a new card with no foreign transaction fee plus cash-back rewards—like the Fidelity® Visa Signature Card—you could potentially come out ahead.

Traveling with a debit card

Since credit cards offer more fraud protection, you may want to use them for most of your travel spending. But you may still need cash, which is the time to shine for debit cards.

But be aware of the fees that can come with withdrawing cash. Reimbursement of ATM fees can be a helpful and economical banking feature. If it's not offered by your financial institution, it could be a good idea to shop around before embarking on a trip. The average ATM fee in 2023 was nearly $5.1

The Fidelity® Cash Management Account automatically reimburses you for ATM fees charged by other institutions2 while using the Fidelity Debit Card3 at any ATM displaying the Visa®, Plus®, or Star® logo.

Cash comes in handy when traveling. See if your debit card offers ATM fee reimbursement to save some money.

Using debit cards internationally

Taking money out of an ATM in a foreign country typically incurs a fee from both the local bank that owns the ATM and your bank at home. So, researching when and how you will be charged fees can pay off. That's because some debit card providers don't charge fees for using foreign ATMs—and a few may even reimburse fees charged by the foreign bank. Planning withdrawals in advance can help you minimize any fees that could be charged.

"Try to plan your total local currency needs and withdraw the funds from an ATM in as few transactions as possible, so you reduce the foreign bank servicing fees," says Stefan Ross, vice president of credit card products at Fidelity.

Planning your withdrawals can help reduce the number of fees you may run into. Some debit card providers don't charge fees for using foreign ATMs--and a few may even reimburse fees charged by the foreign bank.

Spend and earn at the same time

Spending on your Fidelity® Rewards Visa Signature® Card can put money in your Fidelity account.

More to explore

1. Karen Bennett, Matthew Goldberg; “Survey: ATM fees hit record high while overdraft and NSF fees fell sharply;” Bankrate.com; 08/30/2024; https://www.bankrate.com/banking/checking/checking-account-survey/ 2. For Fidelity Cash Management Account owners, Youth Account owners or Fidelity Account® owners coded Premium, Active Trader VIP, Private Client Group, Wealth Management, or former Youth Account owners, your account will automatically be reimbursed for all ATM fees charged by other institutions while using the Fidelity® Debit Card at any ATM displaying the Visa®, Plus® or Star® logos. The reimbursement will be credited to the account the same day the ATM fee is debited. Please note, for foreign transactions, there may be a 1% fee included in the amount charged to your account. ATM fees will not be reimbursed on any Fidelity Bloom app debit card transactions regardless of account owner coding. 3. The Fidelity® Debit Card is issued by PNC Bank, N.A. or Leader Bank, N.A., and the debit card program is administered by BNY Mellon Investment Servicing Trust Company. These entities are not affiliated with each other, and Fidelity is not affiliated with PNC Bank or BNY Mellon. The parent company of Fidelity has a minority percentage, noncontrolling interest in Leader Bank. Visa is a registered trademark of Visa International Service Association, and is used by PNC Bank and Leader Bank pursuant to a license from Visa U.S.A. Inc.

This information is intended to be educational and is not tailored to the investment needs of any specific investor.

Visa and Visa Signature are registered trademarks of Visa International Service Association and are used by the issuer pursuant to license from Visa U.S.A., Inc. Third-party trademarks appearing herein are the property of their respective owners. All other service marks are property of FMR LLC.

Views expressed are as of the date indicated, based on the information available at that time, and may change based on market or other conditions. Unless otherwise noted, the opinions provided are those of the speaker or author and not necessarily those of Fidelity Investments or its affiliates. Fidelity does not assume any duty to update any of the information.

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