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This article was last updated Aug 13, 2019. Terms and conditions may have changed. For the most accurate information, please consult the issuer website.
Planning an epic vacation can be both exciting and stressful. Sure, you’re pumped to enjoy some time away from home, and you’re tasked with making arrangements for your house, your mail and your pets. But have you taken the time to consider what you would do if your credit card failed you?
In this article:
- 5 reasons your card may be denied
- Suspected card fraud
- Hotel or car rental holds
- Your credit card expired
- Your card is closed due to nonpayment
- Only chip-and-PIN cards are accepted
- The bottom line
First and foremost, if traveling abroad, you’ll want to pick up a credit card that doesn’t charge a foreign transaction fee. This can help you avoid paying an extra 2-3% on each purchase you make abroad — savings you’ll appreciate when it comes time to cover your travel-related credit card bills.
Also note that credit cards in general can make travel a whole lot more rewarding anyway. Not only do some credit cards offer free travel protections like trip cancellation/interruption insurance and baggage delay coverage when you use your card to pay, but you have the potential to earn travel rewards or cash back for every dollar you spend.
5 reasons your credit card may be denied — and how to handle it
While prepping your finances for a big trip, you should take steps to ensure you have easy access to money and your bank account — and that you have a backup plan in case something goes financially awry.
Steps you should take include calling your bank and card issuers to ensure they know of your travel plans before you leave. That way, your credit cards and ATM card won’t be flagged when trying to make a purchase or withdraw cash once you arrive, according to Jason Steele, a journalist and card expert.
The best advice? Bring along a backup credit card or two in case your primary card is lost, stolen or rejected.
Here are some reasons your card could be denied while traveling and how you can prevent that from happening in the first place.
1. Suspected credit card fraud
There’s nothing worse than arriving at your destination only to find that your preferred form of payment — your credit card — won’t even work. Yet, this is exactly what can happen if you don’t take steps to prevent your credit card issuer from assuming your overseas purchases are being made by a hacker or thief.
“When cardholders fail to inform their card issuers that they are traveling outside of the country, your first charge at an overseas destination will likely be denied due to suspected fraud,” said Steele.
What to do
While there may be technical reasons your card may not work, such as a card’s magnetic stripe or chip being damaged, Steele says an early call to your credit card issuer can ensure your card will work with ease in most cases and help you avoid an embarrassing denial at the point of sale. All you have to do is call the number on the back of your credit card and inform your bank of your destinations and dates, and you should be good to go.
2. Hotel or rental car holds
Another financial peril of travel to be aware of is the fact that hotels and rental car agencies often put a “hold” on a certain amount of money on your credit or debit card as a deposit. They promise to refund your money later as long as you don’t owe money for damages, but that doesn’t eliminate the threat of the initial hold — or the havoc it can wreak on your cash flow or available credit line on your credit card.
The problem is, this amount is flagged as a purchase and can suddenly max out your card’s credit limit, which can result in the card being rejected when you whip it out for your next purchase.
What to do
Steele says that this is one reason why it always makes sense to have multiple credit cards when traveling.
“You should never be using up so much of your available credit on one card that a hold of a few hundred dollars will take you over your limit,” he said. On the flip side, carrying more than one credit card and keeping plenty of open and available credit on hand can help you avoid this tricky situation.
As an alternative, you can also call your credit card issuer and ask them to increase your credit limit before you leave town. Or, you can also request the hotel or car rental agency to release the hold as soon as you check out of the hotel or return the car.
3. Your credit card expired
Arriving in a new destination with an expired credit card be a real problem since you may not have an easy way to get a new card shipped to you while you’re abroad. An expired credit card will easily leave you in the lurch and unable to make purchases, take out cash advances or take advantage of credit card insurance protections.
What to do
This is one scenario where an ounce of prevention is worth a pound of cure. Credit card expert Kevin Payne of Family Money Adventure says that it’s crucial to check your credit cards and expiration dates at least a few weeks before your trip. If you find that one of your cards is nearing the expiration date, this should give you enough time to receive a replacement card before you depart.
4. Your card account is closed due to nonpayment
You’ve landed in your dream destination and can’t wait to get the party started, but there’s a problem. You’ve neglected to keep payments current on your card, and the issuer has decided to close the account. This typically only happens when you neglect multiple bill payments. If you’ve missed just one payment, your card should still work, but you may be assessed a late fee and a penalty APR. However, if you’ve missed multiple payments in a row, odds are the card issuer is going to prevent any further charges to your account.
What to do
Once an issuer closes your card for nonpayment, the odds of getting the card active again are very small, unless there are extenuating circumstances and you offer to bring payments up to date, including any late fees. The only way to find out is to call the issuer.
Payne also says that, as a general rule, it helps to set your credit card up to be paid automatically — especially if you’re prone to forgetting or paying late.
5. Only chip-and-PIN cards are accepted
The United States is slightly behind the times when it comes to mandated credit card technology, as most U.S. cards are chip-and-signature rather than chip-and-PIN. If you travel abroad without a credit card that has this technology, you may find that some of your purchases are flat-out denied.
This is more likely to happen at terminals where a human being isn’t working, such as a machine that electronically sells train tickets. However, it can happen anywhere — and at any time.
What to do
If you’re traveling to a country where chip-and-PIN technology is prevalent, the best thing you can do is sign up for a credit card that offers chip-and-PIN capability before your trip. However, many kiosks and payment terminals abroad have been updated to recognize whether a PIN is or isn’t issued with your card, allowing you to use your chip-and-signature cards.
Steele says it’s also important to have several different credit cards when you travel, including cards from different issuers and card networks. For example, if your primary card is American Express®, your backup card should be a Visa® or Mastercard®.
“I even like to leave some in my hotel and take some with me, so that I will have a method of payment if my wallet is lost or stolen, or if my hotel room is robbed,” he said.
The bottom line
There’s a lot to think about before you plan a big trip, and your tasks extend far beyond simply booking your hotel and flights. You have to get your finances in order before you depart, and that includes making sure you have access to cash and credit once your trip is underway.
Fortunately, it’s pretty easy to avoid having your credit card denied while you travel if you do some legwork ahead of time. A simple call to your credit card issuer can help you avoid most problems, and having one or two backup credit cards can really help you out of a jam.
Check out our list of Best Travel Credit Cards.