Taking your credit cards along overseas is a far more convenient option than travelers checks. Transactions can be processed outside of banking hours, thus saving the bother of locating somewhere to convert dollars into local currency. They are a safer choice than carrying cash which cannot be immediately replaced if stolen, though it should be covered by a good travel insurance policy.
Credit cards are widely accepted in many countries, and often offer purchase protection which can be invaluable particularly if purchasing goods for shipping. However the use of plastic abroad can present some unique problems, though they are not generally insurmountable if one plans ahead.
A particular scenario which occurs when using credit cards overseas is the possibility that the transaction may be refused as the bank has put a stop on the card. Unusual activity can raise a flag that results in the card issuer putting a hold on the card. This can be avoided by informing the card company that your plastic will be accompanying you overseas, though it does not guarantee that the provider will recall this when your card is used in an unfamiliar pattern. Reliance on credit cards overseas means that it is preferable to carry two cards just in case you find yourself in the embarrassing situation of being unable to pay your bill.
Using credit cards overseas can be expensive. All cash advances incur interest at a very high rate from the moment that cash is withdrawn. Cardholders can avoid this costly route by prepaying their credit card before venturing abroad so the card remains in credit and interest fees are avoided. Additionally almost all credit cards levy a fee in the region of 3% for each foreign transaction. Consumers can avoid this by electing to take a credit card that is free of foreign exchange commission charges. Capital One does not impose a commission fee, thus making it the best choice for overseas travel.
Credit cards can be stolen or lost overseas, but fortunately fraud protection prevents the loss being too great. However the inconvenience can by annoying, but reduced by cardholders carrying the contact details of their card provider, in order to report the loss immediately and often receive a replacement card within 24 hours. It always makes sense to carry some local currency in addition to credit cards, in order to be prepared for this scenario.
Another problem that can result from using credit cards abroad occurs when travelers are familiar with local currency rates. Be sure to pay attention to the conversion rate to prevent a nasty shock later when the bill arrives.
The one insurmountable problem that credit cards can present overseas is if they are not accepted. Although modern cities should pose no problems, retailers in areas off the beaten track may not be familiar with credit cards and simply not accept them. It thus pays to do some advance research to be certain if the plastic will indeed do nicely overseas, before relying on it as the payment method of choice.