Moving abroad? Here’s what to do with your credit cards
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Editor’s note: This post has been updated with current information. It was originally published on April 24, 2018.
An overseas move — whether for work, retirement or personal reasons — requires planning on many fronts. And if you’re a TPG reader, one of these fronts is certainly credit cards.
As TPG mainly caters to U.S.-based readers, this guide will focus on readers with U.S.-issued credits cards who are moving away from the U.S. In this guide, I’ll describe how to organize and categorize your existing cards so you can make intelligent decisions about which cards will move with you, which ones you should store and which ones should be dismissed — as well as some other cards-related aspects to consider before your move.
The first step before moving is to inventory your current credit cards. Your needs may change when you move, so evaluate the following for each credit card. If you’re like me, you may want to put together a spreadsheet to do this.
How much value will this card provide going forward?
When calculating the value provided by a card, consider both the value of the card’s benefits and the value of the points earned from spending on the card. For example, your cobranded Southwest Airlines credit card might not be useful if you’re moving to Europe and don’t have plans to visit the U.S. frequently, but your Chase Sapphire Reserve will continue to be useful, as it earns 3x Ultimate Rewards points on travel and dining and features many benefits that’ll likely still be useful internationally.
Does this card have a foreign transaction fee?
You won’t want to pay foreign transaction fees when using a credit card in your new home.
Does this card have a chip-and-pin option?
Most U.S.-issued travel rewards credit cards still don’t have chip and pin, although all Barclays and Bank of America cards have pin capability. And some other credit cards, including the Chase Sapphire Reserve, may work at some self-serve kiosks when you enter a random pin.
Who’s the card issuer?
Research ahead of time which issuer is most accepted in your new country. Visa and Mastercard are generally the most widely accepted credit cards, so make sure to have at least one of those. However, American Express is working hard to become more widely accepted. And Discover can be useful in mainland China, as Discover’s website notes you can use your card anywhere you see the Discover Network or China Union Pay acceptance mark. That being said, you may have trouble getting merchants to accept the card due to misconceptions that it will not work.
Next, using the information gained during your credit card inventory, sort your open credit cards into five categories:
These cards will become your everyday credit cards. They shouldn’t have foreign transaction fees and should hopefully provide solid benefits and perhaps even a few bonus categories. For me, these are the Chase Sapphire Reserve and whatever card I’m currently working on hitting a minimum spending bonus.
These are cards you’ll use in specific situations, including airline- or hotel-specific cards. In most cases, these cards shouldn’t have foreign transaction fees. For me, these are the Hilton Honors American Express Aspire Card (see rates and fees) for stays at Hilton properties as well as The Platinum Card® from American Express (see rates and fees) for lounge access and Fine Hotels & Resorts stays (Enrollment required for select benefits). The information for the Hilton Aspire Amex card has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.
You’re keeping these cards but don’t plan to use them frequently. If your move abroad is temporary, these are cards you want when you move back to the U.S. Even if your move abroad is long term, these might be cards with no annual fee that you’re keeping to maintain or extend your account age. These cards can have foreign transaction fees, so you won’t be using them abroad. For me, three of these cards are the Chase Freedom (No longer open to new applicants), the Chase Freedom Unlimited and the Ink Business Cash Credit Card, all of which have no annual fee but do impose foreign transaction fees. The information for the Chase Freedom has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.
Convert and store
These are probably cards that you don’t see a need for abroad and come with an annual fee. You may be able to convert some of these cards to a no-annual-fee version. This will keep your account history and credit line active while saving you the annual fee. For example, I had the United Explorer Card, which is great for getting priority boarding and my first checked bag when flying United. But, since I don’t have much use for the United Explorer Card overseas, I downgraded it to the no-annual-fee United MileagePlus Card (this card is no longer open to new applicants) to keep the credit line open and leave the possibility of upgrading the card in the future.
If an unneeded card with an annual fee isn’t eligible for conversion to a no-annual-fee card, or you’d rather close the card than convert it, then it’s time to close the card. Make sure to use up the points first (if necessary) and take advantage of any outstanding travel credits.
Note that you won’t want an issuer to automatically close any of the cards you’re keeping but not using due to lack of activity. To prevent this, I use these cards every six months or so to reload $5 to my Amazon balance. Even though I don’t order many physical items from Amazon while abroad, I do sometimes purchase Airbnb gift cards using my Amazon balance.
For the cards you’ll be using overseas, always remember to avoid dynamic currency conversion by choosing the local currency when making payments. For cards with foreign transaction fees, you can’t avoid the foreign transaction fee by opting to be charged in U.S. dollars — so don’t use cards with foreign transaction fees while abroad and always choose to be charged in the local currency.
Keep a U.S. presence
Whether you’re moving abroad temporarily or permanently, there are some U.S.-based services you’ll want to establish before your move and maintain long term for your financial ease.
You’ll need a U.S. address to successfully apply for most U.S.-issued credit cards. You can use a mail forwarding service that doesn’t make your address appear to be a P.O. box, or a trusted friend or family’s mailing address. If you don’t use a mail forwarding option, you can still use USPS’s free informed delivery service to keep track of what mail has been sent to your address. In either case, you’ll want to go paperless with your banks and credit card companies to receive statements and communications electronically. And you usually won’t want to tell banks or credit card companies that you’ve moved overseas, as some readers have reported that doing so resulted in their accounts being permanently closed.
U.S. credit cards usually need to be paid in U.S. funds using U.S. bank accounts. If you’re going to get paid into a foreign banking account, find a cheap way such as Transferwise to transfer money between your foreign account and U.S. account. Before moving, I opened a Schwab Bank High Yield Investor Checking account to withdraw local currency abroad without incurring any fees — they even refund ATM fees.
Although not necessary, you’ll probably want a U.S. phone number and a free or cheap method for calling U.S. phone numbers to manage your credit card accounts. I use Google Fi and Google Hangouts to use my U.S. number to call U.S. numbers for cheap (or even free), depending on how I place the call.
Apply for new cards
Even while living abroad, you can apply for new U.S. credit cards if you keep a U.S. mailing address and banking account. You may want to use a VPN to see specific offers and avoid questioning that may arise if you apply while on a foreign IP address. If approved, your new card will be shipped to your U.S. mailing address, so you’ll need to have your mail service, family or friend forward the card to your foreign address. There may be cards that are particularly well suited to your new home abroad, like an airline card for an airline based in your new hometown.
Build a foreign presence
Especially if you’re moving abroad long term, you’ll want (and possibly need) to set up some services abroad.
Open a foreign bank account
In many countries, a local bank account will be required to rent or buy a new home, set up electricity and more. You’ll probably want to open a bank account at a large international bank since they’re likely more accustomed to setting up accounts for U.S. citizens — particularly with the complicated Foreign Account Tax Compliance Act (FATCA) reporting requirements placed on banks for accounts of U.S. citizens.
Apply for a foreign credit card
Once you have a bank account in your new country, you may want to apply for a credit card in your new country. In some countries, this will make payment at smaller merchants and self-service kiosks easier, even if the rewards on the card are non-existent. And, depending on what country you move to, you may be able to use Amex’s Global Card Relationship to jump-start your search for a new card using your U.S. account history.
Each situation is different based on where you’re moving, how long you’ll be abroad, how much you’ll be traveling while abroad and the cards you currently have. However, by making a plan to inventory and manage your credit cards, maintaining a U.S. mailing address and bank account and spending occasionally on your stored cards, you should be able to continue to reap the rewards and benefits offered by many U.S. credit cards.
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- The best credit cards for digital nomads and long-term travel
- Why you might want to get a premium credit card instead of purchasing travel insurance
- The best travel credit cards
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- Ten commandments for travel rewards credit cards
Featured image by KTSDESIGN / Getty Images.
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