Four Fips for Chinese Tourists Using Credit Card in Outbound Travel
More and more Chinese choose to go on vacation abroad to enjoy exotic customs. Due to the differences in culture, consumption habits, and currency used in overseas travel, Chinese tourists often spend a lot of extra money unknowingly. Therefore, we have compiled some financial management methods for outbound travel specifically for Chinese tourists. As long as tourists learn more before going abroad, they can avoid great troubles.
It is inconvenient and not safe if you travel abroad with a lot of cash. Therefore, financial experts suggest that Chinese consumers should use a credit card when traveling abroad, and pay attention to the following aspects.
1. Targeted selection of dual currency cards
First of all, tourists who travel to Europe and the United States should try to use dual-currency credit cards. Consumers traveling abroad can bring a small amount of foreign exchange to prepare for small consumption such as taxis and snacks. Dual-currency credit cards should be used when making large purchases. The biggest advantage is that consumers can take advantage of the credit card's overdraft function to fully enjoy the credit card's interest-free period.
Financial experts say that most of the dual-currency credit cards in China are dual-currency cards of RMB and US dollars. When using this type of credit card to spend overseas, the local price is converted into US dollars, and then the US dollars are converted into RMB. Visitors have to pay the currency exchange fee for these two times each time they swipe their card. Therefore, it is best for tourists to choose a credit card in the corresponding currency according to the currency used in the tourist destination. This can save exchange costs. For example, if you want to travel to Europe, you should bring a dual currency card of RMB and Euro. The Japanese credit card is very useful for people who often travel to and from Japan and can save some exchange costs.
2. UnionPay cards should be used for overseas consumption as much as possible
There is little difference in using credit cards for domestic consumption, but there may be big differences due to differences in settlement methods, currencies, and transaction routes overseas. Therefore, we recommend that Chinese tourists choose to swipe their cards when shopping abroad, and it is best not to use cash. Firstly, it is neither safe nor convenient to carry large amounts of cash when traveling. Secondly, the cost will be very high if you withdraw cash at an overseas ATM. Thirdly, when using a credit card to withdraw cash overseas, a 3% handling fee is generally charged, and high daily interest is also charged, which is not cost-effective.
At present, China UnionPay has established business partnerships with more than 20 countries and regions including Hong Kong, Macau, Singapore, the United States, and France. With an RMB UnionPay card for overseas consumption, you can directly exchange RMB with a variety of foreign currencies, and you do not need to pay currency conversion fees, which can save some expenses.
It is also best to use UnionPay cards to travel to Hong Kong and Macau. At present, the acceptance coverage of UnionPay cards in Hong Kong has exceeded 90%. Moreover, UnionPay generally converts Hong Kong dollars into RMB directly at the exchange rate of RMB to Hong Kong dollars on the day the card is swiped, and there is no currency conversion fee. Consumers who travel to Hong Kong and Macau need to pay a currency conversion fee of about 1.5% of the consumption amount if they use foreign cards such as VISA or MasterCard to make purchases.
3. Pay attention to these situations when repayment
With the continuous appreciation of the RMB, especially for consumers with US dollar deposits, choosing to directly repay in US dollars can reduce the exchange loss caused by the appreciation of the renminbi. If you convert your U.S. dollars into RMB for repayment, you will also have exchange losses due to the appreciation of RMB. Those who use a dual-currency card to spend in US dollars for repayment in RMB must remember to enable the function of repaying US dollars in RMB in advance, otherwise, even if there is RMB in the debit card, the bank will not automatically convert it to US dollars for repayment.
There are many ways to repay after overseas consumption by credit card. Consumers can repay the loan in three ways. One is to repay the loan directly in US dollars. The second is to bring the card voucher, credit card repayment slip, and ID card to the bank branch to purchase foreign exchange repayment in RMB. The third is to call the credit card service hotline of the relevant bank to entrust RMB repayment by telephone.
However, the RMB exchange rate fluctuates at any time. If you are too accurate in calculating the amount of foreign exchange purchased, it may happen that the RMB credited into your account is not enough to repay the foreign currency. This will result in the situation that a few cents of foreign currency arrears are not paid off and will affect your credit history. Therefore, it is necessary to deposit some fractions when repayment.
4. There are many ways to refund credit card tax
Visitors shopping abroad should pay attention to foreign tax refund policies. Shopping in countries that provide tax refund services, usually the more money you spend, the more money you return to your pocket. At present, when using an international standard credit card for tax refund shopping overseas, the currency of the tax refund is the currency used when the card is swiped. For example, if you swipe US dollars while shopping, it will refund the US dollars. The money will be credited to the credit card account. If you need to use money domestically, the conversion into RMB will incur a currency conversion fee of 1% to 2%. If you use UnionPay for a tax refund, UnionPay will directly convert the payment from foreign currency into RMB. You can pick it up freely after returning home.
There are generally three tax refund methods for overseas purchases, including cash refund (overseas or returning to the country), cheque refund (mailed back to the country), and credit card refund. The procedures for cash tax rebates are cumbersome, and generally require waiting in line, preparing materials, and changing change. If you choose a credit card tax refund, the credit card you submit must be an international credit card, such as VISA and Mastercard.
Tourists may encounter language barriers when applying for tax refunds when leaving the country. Therefore, you can wait for the tax refund procedure after returning to China. Currently, the Global Tax Refund Company has established cash tax refund locations in Beijing, Shanghai, and Guangzhou. You only need to shop at the designated store, fill in the global tax refund check, and stamp it at the customs with the global tax refund check before returning to your country, and you can go to the designated tax refund point for a tax refund after returning home. The tax refund amount is exactly the same as abroad, and there will be no additional processing fee.