International Credit Cards Save You Money, Hassle On Overseas Business Travel

Even with the rising prevalence and sophistication of video and communication technology, actual overseas business travel is often still necessary.  In fact, according to Deloitte, business travel is on the rise in 2011. 

However—with rising fuel costs, a decidedly unfavorable exchange rate between the dollar and the euro, and a still-precarious economy—such an endeavour can be quite the financial burden for any company, especially a small business.  And while there are a few different ways you can minimize the fiscal impact of overseas business travel, most won’t be news to you. 

What you might not be aware of, however, is the benefit a no international fee credit card can provide, both to your bottom line and in terms of the convenience it provides on an overseas business trip.
Currency Exchange
Exchange rates are typically a significant concern for any overseas business traveller, especially now given that the dollar is at a three-year low as compared to other currencies and upwards of 1.4 dollars is needed to get a single euro.  Credit cards naturally help mitigate the impact of currency exchange because in addition to being basically universally accepted worldwide, Visa and MasterCard automatically provide exchange rates about 6% lower than most major banks.  Not only does the simple act of using a credit card therefore help you to save, but it also allows you to avoid the hassle of looking around for the currency exchange service with the best deal or determining just the right amount of money to exchange in order to meet your trip’s spending needs but not have too much leftover afterward.  After all, you definitely don’t want to eat another 6% converting your currency back into dollars.
Foreign Transaction Fees
Don’t congratulate yourself yet if you already use a credit card for most overseas purchasing, however, because simply using the credit card in your wallet doesn’t always do the trick.  According to Card Hub data, 90.2% of credit cards charge 3% fees for any purchase processed outside of the United States.  The vast majority of people using credit cards as foreign spending vehicles therefore counteract the exchange-rate benefit their cards provide by paying 3% more than they should on everything.
Interestingly, this might also impact more than just the purchases you make when you’re actually in another country.  Airline and hotel reservations as well as any other accommodations booked through foreign-based companies will also incur foreign fees if processed abroad.   You therefore need to open a credit card without foreign transaction fees before making specific logistical arrangements for your trip.  While Capital One was the sole major issuer of such cards just a few years ago, more—including Citi, Chase and American Express—have since joined the fray, meaning you should be able to find a card that meets your particular needs.
Dynamic Currency Conversion
One thing to look out for when using a credit card abroad is dynamic currency conversion.  This is when foreign merchants—trying to capitalise on people’s discomfort with foreign currency—offer you the option to pay in U.S. dollars rather than the domestic coin.  Dynamic currency conversion is not borne from a dedication to community service, however.  It is instead a money-making tool, which merchants use as an excuse to implement extremely high conversion rates and profit further off their customers.  Avoiding this trap is simple though.  Just make sure to only sign bills and receipts expressed in the native currency and dynamic currency conversion will not cost you.
The bottom line is that you’ll save money by using a credit card instead of cash when travelling abroad.  Not only will you automatically get a favourable exchange rate, but if you’re using a rewards credit card, you’ll also get miles, points or cash back with every purchase you make.  What’s more, if your card gets lost or stolen, you won’t be out money or left scrambling to access additional funds.  Credit cards all have $0 liability guarantees, and credit card companies have numbers you can call for assistance free of charge from outside the U.S.  Therefore, a credit card will help you and your company save on business travel from booking to your time spent in the destination to the post-trip bill.

Odysseas Papadimitriou is the CEO of Card Hub, a credit card comparison website that helps business people find financial products ranging from business credit cards for new businesses to the best business credit cards.

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