The Six Drawbacks of an International Credit Card

by : Stephen Chua

An international credit card is very useful and provides a lot of convenience to frequent travelers. However, it also has a higher risk of frauds as compared to those for domestic use only.

Here are six drawbacks of an international credit card:

1. Recycle of used credit card numbers

Each day, a fair number of credit cards are being canceled. However, the card companies would reissue the same numbers to other cardholders at a later date. While the personal identification numbers (PIN), expiry dates and cardholder personal information has been changed, the same number that was used before are printed on the cards. This will expose the new cardholders to a higher risk of frauds and invalid transactions.

2. Limited Merchant Information

The account statements issued by the credit card companies usually contain limited information about the participating merchants. Most of the time, the statements contain only the date of transactions, merchant names and the amount charged to the cards. Other information such as the exact item details that were charged, cashier names and employee IDs are usually not present.

3. Delay in blocking a lost card

When a card loss is reported, it takes some time for the credit card companies to block any future transactions being made through the stolen or lost cards. The delay can be matters of days or weeks. During this interval, the stolen cards may have been used many times already.

4. Lack of Good Validation Software

Most participating merchants do not install high quality validation software in their point-of-sale systems. They leave everything to the credit card companies. This will increase the risk of frauds for the cardholders.

5. Fraud management policies are not consumer friendly

For many credit card companies, the policies on fraud management may not be very consumer friendly. While they do not put the blame on the cardholders directly, they do have terms that protect themselves from bearing the full responsibility and cost. This means that the policies on fraud management usually favor the card companies and not the consumers.

6. Investigation on fraudulent transactions is slow

Investigation into international credit card fraud is a tedious process. You have to write in to the card company and explain what has happened before they kick in any form of action. Even after they start the ball rolling, it takes a long time to gather enough evidences to bring charges to the suspects who are proven guilty of fraud.

Despite these drawbacks, an international credit card is still a very useful tool for the frequent traveler. By planning ahead and taking the necessary precautions, one can actually reduce the risks of fraud to a minimum.