This is how you should use your American Express card overseas

05.07.18
9 minute read
Tagged:

If you’re planning a trip or vacation abroad, it’s good to think in advance about the best way to pay for things while you’re travelling. Vacations are costly anyway, and can get much more expensive if you don't take the time to understand the sorts of fees and charges you might incur when you spend your cash overseas.

Using debit or credit cards abroad is often the most convenient and safe option because you don’t have to deal with unfamiliar cash. Maybe you’re considering relying on your Amex card for your travels. It’s a smart choice. But it’s well worth understanding and avoiding some of the common pitfalls so you can make sure your money goes further.

Read this guide to find out:

  • How and where you can use your US Amex card abroad
  • The potential cost of using your card
  • How to stay safe when using your US Amex card while overseas

Can I use my American Amex credit or debit card abroad?

You can use your US Amex card abroad to make purchases or withdraw cash. However, it’s not universally accepted, so if you're paying for goods or services you do need to check that the retailer is displaying the Amex symbol first. In many places in Europe, for example, stores and restaurants prefer not to accept Amex payments because of higher merchant charges. That means that, especially in cheaper stores and family businesses, your card might not be accepted.

You shouldn't have any issue withdrawing cash from an ATM, but you’ll need to know your 4-digit PIN number.

Most credit and debit cards used in Europe, Canada and Australia will have ‘chip and PIN’ technology, which isn’t so common yet for many Amex cards. If you have a magnetic stripe card, then retailers and restaurants can theoretically still process a transaction by swiping the stripe on the payment terminal. At that point, they should then take a signature instead of a PIN. However, you might encounter problems with this process as it’s seldom used in places like Europe. If you do encounter resistance, you may try asking if the server try swiping the card anyway, because the payment terminal will usually guide them through the steps needed to take a payment this way.

While you may be able to convince a store clerk to swipe your card instead of taking the pin and chip, this approach won't work for vending machines and automatic payment services for travel tickets or gas. These machines simply won’t work with a magnetic stripe card. However, you may be able to find a staff member to process your transaction in many of the places.

You'll find that in most places in Europe, waiters will bring a card terminal directly to you and charge the entire transaction in your presence. Your card won't be taken out of your sight.

Another difference is that contactless payment technology, which allows you to simply ‘tap and go,’ is very popular in Europe, Canada, and Australia. Some Amex cards come with this functionality already. If yours does then you can use it just the same as you do at home — just check that the retailer has the contactless symbol displayed. Some countries, however, haven’t yet adopted contactless technology so you may be out of luck.

In general, higher-end outlets and those used to dealing with tourists should be able to process transactions on your Amex card. However, there may be additional fees to pay when you use your card overseas. Carry an alternative in case your Amex card isn't accepted — ideally a small amount of local cash and a second payment card running a different payment system like Mastercard or Visa.

American Express international fees: How much does it cost to use my US Amex card abroad?

Whether you choose to spend abroad using your debit or credit card, you’re going to incur some fees.

Fee 1: Foreign exchange rate mark-ups

Firstly, the bank will apply the daily exchange rate set by Amex, to convert your purchase into US Dollars (USD). The rate varies day to day, and can be found by logging into your online banking. You'll usually find that it's slightly less favorable than the real exchange rate you find on Google. However, because you’re a valued customer, there hopefully shouldn't be a big difference if you’re being charged in the country’s local currency. You do need to be careful here, though, as if you’re charged in USD under something called Dynamic Currency Conversion (DCC), you can run into exorbitant mark-ups. But more on that shortly.

Fee 2: Foreign transaction fees

Once your transaction cost has been moved over to USD, many card providers will then deduct a further cut for themselves. This is known as a foreign transaction fee, and is normally a percentage of the amount you spent. The exact amount varies hugely between cards, though.

Fee 3: ATM fees

If you’re taking cash out of an ATM, there may also be further charges to pay. These will be especially steep if you're taking a credit card cash advance. Most likely you'll see a further percentage added onto the fees you’ve already paid, subject to a minimum transaction amount.

In addition to this, some banks or ATM providers might levy their own fees on top of your bank charges. You can often avoid some or all of these costs if you use an ATM in the Amex partner network.

Fee 4: Dynamic Currency Conversion (DCC)

In a restaurant or store, you might also be asked if you want your purchase to be processed in USD, as opposed to using the local currency. This is known as Dynamic Currency Conversion (DCC), and it should most definitely be avoided.

If possible, choose to pay in the local currency, whenever you are asked about DCC. That’s because the foreign currency exchange rates applied under DCC are almost never as good as those your bank or card provider will give you. By choosing to be charged in dollars, you’re basically giving the local company or ATM machine your permission to use its own, poor, exchange rates. They'll mark up the exchange rate they use and pocket the difference.

Fee 5: Credit card interest rates

The process used when spending overseas will be similar if you’re covering your vacation spending with a credit card. However, in this case you’ll have to take into account the interest charges you’ll incur if you don’t pay your bill straight away. Check the fine print on the back of your statement as some credit cards do come with promotional offers. If these mean you’ll have a grace period during which your purchases are interest-free, you might be able to pay less overall by using your credit card.

The fees below are a guide, as different card types have wide variances, including promotions and opening offers which improve the rates available. Find out your costs online or on the back of your card statements.

Here are the fees you’ll be charged to use your US Amex card while you’re away, from American Express directly or some of the popular card-issuing banks:

CardForeign transaction feeATM withdrawal or cash advance
American Express issued0-2.7%¹In most cases, 3% or $5, whichever is the greater¹
US Bank Gold Amex CardNone²Cash advance subject to 4% or $10 charge, whichever is the greater²
First National Amex3%³Cash advance subject to 5% or $15 charge, whichever is the greater³
Wells Fargo Propel AmexNone⁴Either $10 or 5% of the amount of each advance, whichever is greater⁴
Blue Cash Preferred Card2.7%⁵Either $5 or 3% of the amount of each cash advance, whichever is greater⁵

What if my US Amex card gets lost or stolen while I’m overseas?

It's better to be safe than sorry. Protect yourself by thinking about how you’ll cope if your card is lost or stolen when you’re outside of the US.

First you need to tell your card issuer what's happened. They’ll cancel the card and, depending on the card you have or their usual policy, may be able to issue you some emergency funds while you’re away.

You’ll find the number to call on your statement, online or on the back of your card — so make a note and keep it separate to your card during your travels. You can find contact numbers and forms for some of the main Amex card issuers here:

You can also get card protection insurance which could offer additional help if your card is lost or stolen while you’re abroad. However, this will come at a fee. Card protection can be arranged through your bank or an insurance company. If you do take this additional protection, make sure you have all your policy details with you when you travel.

Is it better to use debit or credit cards abroad?

There’s no simple answer to the question about whether it’s best to use a debit or credit card abroad. Your personal preferences, your spending habits and the deal you’ve got on your preferred card will dictate which is best for you.

In general terms, using a debit card is often better if you intend to take cash from ATMs in your card’s network. Wherever you are in the world, you should be able to find an ATM in the Amex partner network. If you use these ATMs you can benefit from reduced fees, or even no fees at all depending on the terms of your specific card. Check out which ATMs are free to use before you travel, otherwise you’ll be hit by hefty costs.

However, if you need to spread the cost of your vacation over time, you might prefer to use a credit card. Some of the very best travel cards also give cash-back or rewards to help you travel more in future. If you have a premium card, you might also be able to access other support and offers, like free upgrades or help if you have an emergency while you’re away. You just need to remember that you may incur additional interest costs if you use a credit card instead of a debit card. Taking a cash advance on a credit card is usually pretty bad value — there are high transaction charges, and the interest often starts to accrue immediately.

One reason you might prefer spending on a credit card, however, is the greater security offered compared to using cash. Credit card purchases are monitored and your bank should be able to help if you’re the victim of fraud. You can help protect yourself against fraud, by checking all your receipts and your card statements thoroughly.

What are some good tips for using my US Amex card abroad?

It used to be the case that you had to inform the bank whenever you were travelling abroad. However, many banks no longer insist on this step, so it’s a good idea to check the policy with your local branch or online. If you plan to be away for a large chunk of time, or if you’re going somewhere known to be a fraud hotspot, it’s definitely worth telling your bank so they don’t block your transactions unnecessarily.

Even if it’s not necessary to inform your bank of all your plans, you should make sure they have your correct contact details. If the bank systems detect anything unusual, they’ll call to check all is well. If the number they hold is wrong or you’ve switched your phone off while you’re travelling, your bank might decide to block your account activity while they make further checks. Finding out you have no means of payment, while you’re trying to enjoy your vacation, isn’t going to be fun.

Because of that, it’s well worth having a second bank card just in case there’s a problem with your usual card. Keeping a small amount of local money is also smart. Not only are there places which won’t accept payment using an Amex, there will also always be smaller outlets which can’t process any card payments at all.

Travel is rarely cheap, but accidentally overspending while away because you lose track of the costs in another currency is also a real challenge. To keep track of your spending when you’re on vacation you can use online banking to monitor your account remotely, or you might want to try an app to monitor and manage your cash flow while you’re away. Another good, simple approach is to decide on a daily spending limit in the local currency to help make sure you don’t have any nasty surprises once your vacation is over.

Your vacation is no time to worry about money. Use these tips to stay safe while you spend abroad, and make sure you know what fees and charges you need to plan for. Then all you have to do is relax and enjoy!


Sources

  1. https://www.americanexpress.com/us/customer-service/faq.withdraw-cash-atm-fee.html (July 5, 2018)
  2. https://applications.usbank.com/oad/termsSimpleApply.controller?locationCode=8985&offerId=RG4499V1MR&sourceCode=38502 (July 5, 2018)
  3. https://www.firstnational.com/dynapp/dynamic.app (July 5, 2018)
  4. https://www.wellsfargo.com/credit-cards/propel/terms/ (July 5, 2018)
  5. https://www.americanexpress.com/us/credit-cards/card-application/apply/prospect/terms/blue-cash-everyday-credit-card/26129-10-0/?print (July 5, 2018)

This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from TransferWise Limited or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date.

TransferWise is the smart, new way to send money abroad.

Find out more