Credit cards can be a dangerous thing, so is it worth using a credit card when travelling overseas? 

Today there are plenty of options for making transactions abroad. Travelers can take converted cash, withdraw money overseas or take a credit card. So, are credit cards still the best option, and if so, which one?

The question was posed by one listener on 2UE’s ‘On the Money’, who asked for advice on the best credit card for traveling that included insurance and cheap transaction costs.

While there is some skepticism about using credit cards overseas, Paul Rickard of the Switzer Report believes that credit cards aren’t a bad option. 

“Generally, the transaction costs are going to be the same from bank to bank… though AMEX might have a higher transaction fee than Visa or MasterCard,” he adds. 

According to him, the most important factor is the exchange rate.

“[That’s] set by Visa or MasterCard, and is the difference between what they are converting currency at and what the real exchange rate is… I don't find that the credit card rates are that bad.” Paul Rickard said.

Different countries have different exchange rates, so it’s really a matter of doing your research to find the best deal depending on what country you’re visiting.

While some credit cards come with bonus insurance, Rickard emphasises that the insurance offered by the card may not cover everything.

“Basically, if you have something strange about you or you’re over 80, and you want to go skiing or ride a motorbike, you can’t [it isn’t disclosed or offered].”  

“The credit card insurance may not cover you for every accident, so you may need to go online and pay some additional fees.”

That means you may need to pay a premium on top of that insurance.

Like any contract, there are plenty of clauses down the bottom, and that’s where you need to be careful.

Finding the right credit card is like finding a pair of shoes; You have to shop around until you find the perfect fit.

Click the video above to listen to the full interview.