Do all credit cards work the same way abroad?

Plenty of Israelis fly abroad with the credit card they use every day, without giving it a second thought. The corner shop in Barcelona, the taxi in London, dinner in New York: you can pay by card almost anywhere, but is that card actually giving you the best terms?

The truth is that not every credit card behaves the same way outside Israel. Most Mastercard and Visa cards are international, true, but that says nothing about conversion fees, exchange rates, security blocks and insurance terms, which can differ considerably from one card to another.

Currency conversion fees

Every transaction abroad goes through a currency conversion. The amount you pay in dollars, euros or pounds sterling is converted into shekels, and that conversion carries a fee. The conversion fee is not uniform across banks, credit card companies and cards. It may sound like a small difference, but over a two-week trip with expenses running into thousands of shekels, the gap adds up to a sum worth paying attention to.

A few things worth checking before the flight:

• What conversion fee does your card charge?
• Is the rate set on the transaction date or on the billing date?
• Is there an extra fee for withdrawing cash abroad?

Blocks and declines

An awkward moment many travellers know: you are standing at the till, you tap the card, and a decline message appears. That does not necessarily mean you have gone past your balance or your credit limit. It usually means the security mechanism flagged unusual activity. Credit card companies run systems that identify irregular transactions, and a sudden purchase in a foreign country can trigger an automatic block.

The fix is simple: before every trip, tell your credit card company you are travelling abroad. Most companies let you do this in the app in under a minute. That way the system expects transactions from abroad and does not block you at the wrong moment.

One more tip: save your card company's international service number on your phone, because the regular number does not always work from abroad.

Travel insurance

Something many people do not know is that certain credit cards include built-in travel insurance. The extent of the cover varies, though. Higher-tier cards tend to include more comprehensive insurance, covering lost luggage, flight cancellation and other benefits. Basic cards usually offer minimal cover.

Before you buy travel insurance, check what your card already covers, so you do not pay twice for protection you are entitled to anyway.

Do not rely on the phone alone

Even if you are used to paying by mobile, take a physical card as well and remember the PIN. Abroad, it is never pleasant to run out of battery or reach a business that does not accept contactless payment. It is worth keeping the card separate from the phone, so you still have a way to pay if one of them is lost or stolen.

Something to think about before you go

Before you fly and start paying abroad with a Mastercard or Visa, make sure you are carrying the card that works out cheapest for you in terms of conversion fees, and that you have told your credit card company about the trip.