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I'm Moving Overseas. Do I Need a Foreign Credit Card Issued in That Country?

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By Lindsay Konsko

As the world economy becomes increasingly intertwined, U.S. workers in many industries are being offered opportunities to work overseas. That creates some obstacles as far as using financial services and foreign credit cards. Should you apply for credit cards at foreign banks to get international credit cards issued while you're abroad?

It's going to be difficult, if not impossible, to get a foreign credit card.

U.S. credit history is meaningless

The reason is that other countries not only pay no attention to your U.S. credit report, but they also have no real way of communicating with credit bureaus from a technological and IT standpoint. The systems aren't set up to talk to one another. Even if they were, there are issues regarding exchanging personal information internationally that would hamper the process.
More to the point, however, foreign creditors couldn't care less about your U.S. credit history. That's because the U.S. credit system is based on that magic nine-digit number called your Social Security number. Other countries use a host of different identifiers for their citizens.

What's a responsible credit user to do?

Set up ahead of time

First, give yourself as much lead time as necessary to prepare for your move. Do research on what most landlords, banks, telecom, Internet and utility companies require to set up leases and accounts. That doesn't just mean going online and reading up on stuff. It means making direct international calls to the people who make decisions. You should go straight to the source. To the extent you can set things up before you move, that's even better. You want to have basic services up and running before you arrive.

If you want to buy property, make direct calls or emails to local real estate agents to learn about getting real estate loans and what information you'll need to provide.

Decide on the best U.S. card

As for credit cards, since you will be unlikely to obtain a card from the local bank, you'll want to look to the accounts you already have and optimize them for international travel. Virtually all U.S. credit cards will work overseas. Visa and MasterCard are accepted just about everywhere. American Express is accepted in many places, but not quite as broadly.

Many cards waive foreign transaction fees, but not all of them do, so make sure you have the right cards. Call each card company to find out the exchange rates that are applied to charges. This is where you must be careful. The exchange rates may vary substantially. You may not think that a penny or two difference is going to matter, but that difference will add up over time.

The all-important exchange rate

The words you want to hear on the exchange rate are "spot rate." That means the currency will be converted at the exact exchange rate the currency markets reflect at the moment of the charge. You may get several different answers from different companies. You'll need to calculate each number and compare it to the spot rate.

The best method is to ask what the current exchange rate is that they record charges at. Then, compare it to the spot rate. Whichever card comes closest is the one you'll want to steer toward. Of course, you may have to weigh other considerations such as reward features.

Do it all online

You don't have to change to a foreign address with the credit card company. You can continue to get statements mailed to your U.S. address, or you could set up a U.S. post office box. You can always check statements online or call customer service for the amounts due. You can use online payments to eliminate all the paperwork.

In each case, however, talk to customer service. Tell them you are moving overseas. They want to provide you with good service because they don't want you going to another company.