Should I Get Another Credit Card Before Moving Overseas?

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Dear Mr. Credit Card,

I wanted to ask a question not many people have asked on your site. I am moving to Sydney, Australia in a couple weeks and will only be staying in their country for about a year. I’ve been unemployed but will be working there in Australia. I only have one credit card, which is a Discover Card and is not accepted in Australia, so I’m pretty sure I need to pay only the minimum balance on it until I come back to the States. I’m confused about if I should apply for a new credit card in Australia or while I’m still here in the States or if I should cancel my Discover card.

Mr. Edward Park

Answers – There are two ways you can go about doing this. You can apply for either a Visa or a MasterCard before you leave for Australia (but do it quick) since they are the most universally accepted worldwide. The only problem with that is that all US based cards (perhaps with the exception of some Capital One cards) charge a 2% or 3% fee for foreign transaction. Hence, for one year, you’ll simply be paying more for using a US based card overseas. The other issue you have to consider is that you will probably want to set up autopay from a US bank account to pay this card if you use it. You have to make sure you have enough money in this US based bank or if not, you have to set up a monthly transfer from your bank in Australia.

Alternatively, you could get a card from Australia and make it easier for yourself. Most Australian banks will issue either a Visa or MasterCard. You could also get an American Express there. The advantage of having an overseas Amex card is that Amex will issue you one US based card for every overseas card you have. So that may be a good way to enable you to get an Amex when you get back after one year. The disadvantage of having an Australian based credit card is that it is not tracked by the credit bureaus and hence all your timely payments will not help you in building your credit history while you are away.

If I were you, I will not cancel my Discover card because it is a great card and you can use it after you get back here. I would also get a card in Australia rather than trying to get one here.

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