01 September 2011
Credit Card Use in Foreign Currency
When we purchase foreign goods or travel abroad how do we make money transactions? cash is not a good option due to safety reasons. here the credit card companies and banks offer special cards for this facility.
Traveling abroad requires a large sum of money and it is not possible to carry so much cash. Cards help to make purchases of good and services easy and convenient.
Many credit companies allow their customers to make cards for use in foreign countries. They are different from the credit card used within the country. Visa card , Master Card, American Express Card etc are a few to mention cards used during foreign transactions. These cards are issued keeping in mind the track record of the customer with his previous cards. The cash limit usually depends on the money deposited in the account of the card user.
Banks charge transaction fees for any foreign expenditure and purchases involved by the client. Rewards are attached with such cards to encourage use. Frequent flyer points, cash rewards and concessions in certain hotels are some of the bonuses offered by credit card companies. The credit card issuer have transfer charges for foreign currencies. whenever there is any expenditure as purchase or service used from service providers by the client then they are charged a certain fees additional to the amount spent. They also have to bear the conversion rate charges and administrative fees for the same.
Many times rewards for these transactions are not made public and the customer has to be alert to find out about these offers and take the benefit of the same. The card issuer company also tries to charge extra charges on such transactions since they have to somehow recover this bonus money offered to the customer. Here they increase the amount to be spent by customers to avail these cash rewards. Hence promoting more expenditure than required.
Though these transactions do take away a certain percentage of more money from the credit card user they are very convenient and safe and hence promotes more frequent use of the card by customers during foreign travel.