Use your credit card when vacationing in a foreign country

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I just got back from Mexico on May 11, 2012. I bought a few things and charged it on my credit card. Here are some of my savings from currency exchange    This is a receipt from lunch. The total in pesos was $241.50. When you decide to charge it to your credit card, there is an option for you to charge it in US Dollars or Pesos. If the charge was made in US Dollars, I would have been charged $21.95. I chose to charge it in pesos because I used my capital one card, and I knew that I don't pay any foreign conversion fees, and would get a better rate that what they were giving me. Because I charged this in pesos, I paid the $18.02 (5th charge on the last picture). Total savings  = $3.93 or 18% This receipt is from the purchase of souvenirs. The total in pesos was $281.50. If I had requested they charge it in US Dollars, I would have paid $22.52. Instead I asked them to charge it in pesos. I paid $20.90 (3rd charge below)  Total savings = 1.62 or 7%    This receipt is from the purchase of more souvenirs. The total charge in pesos was $369. Their conversion to US dollars was $29.52. Because I charged it in pesos, I only paid $27.76. (7th charge below)  Total savings =$1.76 or 6%    This is an imprint from my online banking printout. You can reference the amounts I actually paid. I didn't take pictures of all the receipts, but as you can see some savings are higher than others. I used a credit card that doesn't charge a foreign fee, but even if you used a credit card that charges a foreign fee, they generally charge 3%. The minimum savings here is 6%, so even if your card charges you 3%, there is a minimum saving of 3%. These savings may appear small, but if you purchase a big ticket item (for example $500) and you can wind up saving up to $50. Just keep in mind that the convenience of charging in US Dollars when you're in a foreign country will actually cost you more overall.    
lilywow posted May 14, 2012
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14 Comments
newguy
Good to know. Thank you for sharing, lilywow :)
newguy (rep: 120k) posted May 14, 2012
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Florida2Texas
I noticed the same thing when I was in Cancun last year. We were mostly paying in US dollars but we were still getting charged way higher than if we would have paid in pesos. We learnt our lesson and decided that next time we are down there we will get some currency exchanged at the airport!
I am glad you were smart enough to do this from start! :)
Florida2Texas (rep: 10.5k) posted May 14, 2012
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Florida2Texas
Btw, above when I say we were mostly paying in US dollars, I mean CASH! :)
Florida2Texas (rep: 10.5k) posted May 14, 2012
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dealwagger
Thank you lilywow! That was definitely worth reading! I just wish I knew more about what credit cards are widely accepted, for example, do you mind sharing what credit card you used? It would also be awesome if you got cash back on top of your savings :)

I hope you enjoyed your trip to Cancun!
dealwagger (rep: 10.2k) posted May 14, 2012
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lilywow
@florida2texas - don't pay cash in US Dollar either. If you don't want to use a credit card, go to the atm and take out foreign currency. You will pay about 5% in fees between your bank and the foreign bank, but it is still lesser that what the currecy exchanges charge at the airports which is somewhere between 10-20% also reflected in the unfavorable exchange rate.
lilywow (rep: 8.32k) posted May 14, 2012
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lilywow
@Dealwagger - They accept all types of credit cards Visa/Master/Amex/Capital One. I used Capital one because they are the only credit card that does not charge a foreign exchange fee. The other credit cards can charge 3%-5% or $5 whichever is higher.
lilywow (rep: 8.32k) posted May 14, 2012
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nthsll
Good information to know. My wife and I paid for most incidentals in cash and the rate was about 10:1. This would have saved us 10%.

Thanks for sharing
nthsll (rep: 12.4k) posted May 15, 2012
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rd995
this is good to know plus you dont want to be flashing all your money when its time to pay
rd995 (rep: 105k) posted May 15, 2012
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gangstabarbie
thank you for sharing. Very informative. I will put it into use when i go to Mexico :)
gangstabarbie (rep: 9.67k) posted May 15, 2012
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encorez
I will Facebook this link/post....thanks.
encorez (rep: 9.96k) posted May 15, 2012
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bbattag
Yep. Very true. I did the same in Mexico. Credit cards usually offer a competitive conversion fee. Just make sure you are using a credit card without a foreign exchange fee
bbattag (rep: 6.74k) posted May 15, 2012
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chuckydealpl
i'll be traveling overseas soon, thanks for the info.
chuckydealpl (rep: 40.2k) posted May 17, 2012
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erick99
Useful post. I don't travel overseas though I was born and raised there until I was eight. I would like to go again if I am ever able to afford to go.
erick99 (rep: 17k) posted May 19, 2012
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drewskidooo
Be careful when using your credit card abroad and don't forget to notify your card company! If you don't they may cancel your card thinking it was stolen.
drewskidooo (rep: 792) posted May 25, 2012
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