Credit or debit card abroad: Which one to use?

Credit or debit card abroad? This is a question that travelers or companies ask themselves when making transactions abroad or in a foreign currency. Debit and credit cards offer different options for making uncomplicated payments abroad. However, it is important that cardholders pay attention to exchange rates and hidden fees in order to keep costs low. Everything you need to know about credit or debit cards abroad can be found in the following article.

What are the features of international debit and credit cards?

At first glance, credit and debit cards seem almost identical. Both cards are linked to a payment network such as Mastercard, VISA or American Express and have a card number of 12-16 characters, an expiration date and a CVV/CVC code on their back. Modern cards are also linked to other payment service providers such as Apple Pay in order to process payments via mobile devices. 

The main advantage of a credit or debit card abroad is the simple payment process. Even if you do not have the required foreign currency, the conversion and international money transfer process is carried out in real time. This means that cardholders can pay or withdraw money abroad while the conversion process is carried out in the background. 

The difference between the two cards is nevertheless considerable: while a debit card is linked directly to the bank account and the money is deducted in real time, a credit card is issued with a loan which, depending on the provider, usually has to be repaid once a month plus interest. This difference has a major impact on security and the cost factor.

Finally, there is another form: The prepaid debit card. This card offers all the advantages of a normal card, but without the risks of a regular overdraft, as a certain amount of money is deposited in advance that can be spent with the card. This means that only the money that is at your disposal can be used.

What is the difference between debit and credit cards?

The difference between credit and debit cards lies primarily in the fact that the debit card is linked to the bank account and payments are made in real time, whereas credit card holders borrow the money from banks to repay it with interest over fixed time periods. As already mentioned, this fact has a significant impact on security and the cost factor.

Credit cards are among the types of credit with the highest interest rates in the world, so both end users and companies should monitor and weigh up their use. This is particularly important for companies that issue a large number of credit cards to their employees. On the other hand, debit cards cannot accumulate debt, which makes them cheaper to use in most cases.

VISA, Mastercard and co.: Convenience comes at a price

To put it in a nutshell: most end users (and even companies) do not know how much they pay in fees for a credit or debit card abroad. The fact that payment networks such as VISA or American Express automatically convert currencies comes with high and non-transparent fees. 

The most common international payment fees are:

• Annual fee: Many providers charge an annual fee for holding a debit or credit card. One or more cards are often included in a package.
• Overdraft interest: If the credit card bill is not paid on time, interest will be charged at different rates depending on the provider. Reminder fees may also be charged.
• Conversion fees: For card payments in foreign currencies or abroad, providers usually charge a percentage of the transaction amount as a conversion fee. This percentage varies considerably depending on the provider.
• Fees for cash withdrawals: Especially when withdrawing cash abroad, disproportionately high fees can be charged. On the one hand, these are charged by the card provider, and on the other, ATM operators often charge an additional fee themselves. It is therefore important to choose a reliable bank for withdrawing cash abroad.

Credit cards are likely to remain more widely accepted than debit cards, especially cross-border. However, withdrawing money from ATMs abroad and the currency exchange associated with international transfers are often much cheaper with a debit card than with a credit card. It is therefore important to get an overview of all costs in advance so that there are no unpleasant surprises when using your card abroad.

Multi-currency debit card: amnis combines convenience with transparent prices

End users and companies both rely on a credit or debit card abroad in order to carry out transactions easily. This raises the question of how non-transparent or hidden fees can be identified before a payment is made.

This is where amnis’ innovative and simple pricing system offers real benefits. The amnis multi-currency debit card is a debit card that allows customers to make purchases in foreign currencies and manage multiple foreign currency accounts. With 0% foreign exchange and transaction fees, the amnis multi-currency debit card is the easiest way to reduce your transaction and foreign exchange costs while your financial processes become more transparent.

amnis combines all the advantages of physical and virtual debit cards – with no hidden fees.

Your free demo account with amnis

amnis is an innovative financial services provider that offers its customers transparent and cost-effective alternatives to existing banks. In addition to the amnis multi-currency debit card, it is already possible to make payments in foreign currencies without SWIFT, but through local networks such as SEPA or ACH. amnis facilitates international payment transactions and reduces costs to a minimum. At amnis you also earn high interest on business accounts while your money remains protected to the highest standards.