Using business credit cards internationally

Quick insights

• You may be charged fees for using a business credit card abroad.
• Using a business credit card internationally may allow you to earn rewards on eligible purchases.
• During your travels, you may want to store your card in a safe place when you’re not using it.

Business owners may occasionally—or sometimes routinely—need to make purchases or complete transactions abroad. Businesses with a global reach may also find they need their employees to use company credit cards while traveling internationally. Business credit cards can play an important role in facilitating overseas spending.

For these reasons, using a business credit card internationally can be important for business owners and their employees. In this article, we’ll discuss the costs and considerations of using credit cards abroad as well as some pros and cons.

Fees associated with international credit card use

Credit cards are common options for making purchases abroad. Many major business credit card issuers have card options with wide global acceptance that can be used to pay for a variety of goods and services. Credit cards may also help international travelers avoid having to carry around large amounts of cash for everyday purchases.

However, using a credit card internationally can sometimes result in additional fees. It may be helpful to understand what kinds of fees can be associated with international credit card use.

Some common fees include:

Foreign transaction fees

A foreign transaction fee is a charge assessed by your credit card issuer on transactions made in any currency other than U.S. dollars (USD). These fees are not limited to making purchases at brick-and-mortar locations. They can also include purchases on websites based outside of the U.S. and transactions that are processed by a foreign bank.

Foreign transaction fees typically range from 1-3% on average, meaning they may need to pay 1-3% of the purchase price in fees. However, there are some credit cards that provide zero foreign transaction fees as a cardmember benefit. By using a card with this benefit, you may be able to avoid paying foreign transaction fees.

Cash advance fees

Some credit cards may allow you to request a cash advance when taking out money at an ATM. This may be helpful when traveling outside in a country that uses a different currency than your home country.

When you get a cash advance, you're borrowing money against your card's line of credit. You must repay this loan and the amount you transfer cannot exceed the current balance available on your credit card.

When you take out cash from an ATM, you may incur a cash advance fee that is often calculated based on a percentage of the cash you’re taking out. You will typically pay a higher interest rate on advances than what your card charges for purchases.

Dynamic currency conversion fees

Dynamic Currency Conversion (DCC) is a service offered by credit card issuers that allows international transactions to be conducted in the cardholder's home currency. This means that when you use your card abroad, instead of being charged in the local currency, you would be charged in your own currency. This can potentially help the purchaser get a better sense of the cost of the good or service.

This convenience comes at a cost, known as the Dynamic Currency Conversion fee. It can range from 1-3% of the transaction amount. You may be able to avoid this fee by choosing to be billed in the local currency.

Pros and cons of using a business credit card internationally

Even though you may incur fees, there are advantages to using credit cards abroad, including:

• Convenience: Credit cards have global acceptance, with major credit cards being accepted at millions of locations worldwide.
• Rewards: With some credit cards, you have the potential to earn rewards on international purchases. These rewards may provide travel rewards, cash back and points for eligible purchases.
• Perks: Some credit cards feature travel protections like car rental insurance, baggage delay insurance and travel emergency assistance. They may also provide access to airport lounges worldwide.
• Expense tracking: For business owners, company credit cards can help simplify expense tracking and reimbursement procedures, especially for businesses with employees who travel internationally for work.

However, not every business will accept a credit card as payment. When you’re traveling internationally, you may want to have other forms of payment on hand in case a retailer does not accept cards or the card that you have.

Security measures for using a business credit card abroad

The potential for credit card theft and fraud exists in the U.S. and abroad. Illegal practices like card skimming and fraud can occur regardless of where you’re using your card.

Common best practices for keeping your credit card safe include:

• Storing your card in a safe place. If you’re traveling abroad, that could mean putting it in a hotel safe if you won’t need to use the card while you’re out and about.
• Verifying that a website is legitimate before you provide your credit card information can help avoid fraud and theft.
• Trying to avoid giving credit card information over the phone, especially if this is not a call that you’ve initiated.
• Reviewing your statement regularly for unusual transactions.

If your card is lost or stolen—or you spot fraudulent activity—notify your card issuer as soon as possible. Knowing how to contact your card issuer or lock your card at a moment’s notice can be helpful when if you suspect fraud.

In summary

Using a business credit card while traveling abroad can provide convenience when making purchases and also help travelers avoid carrying large amounts of cash. However, you may have to pay foreign transaction fees when using a card internationally if your card does not include zero foreign transaction fees as a cardmember benefit.

When traveling abroad, keep in mind best practices for keeping your company credit card and its information secure. And if your card is lost or stolen, report it to your card issuer as soon as possible.