If you are going overseas, for work or a holiday, it pays to give some thought to your finances. There are lots of benefits of using your cards abroad, especially if you don’t want to carry large amounts of cash around.
Now, the Central Bank of Nigeria (CBN) is finally lifting some of the restrictions as Nigerians can now make foreign exchange deposits at local banks and also use bank cards abroad. Though various banks in the country have placed limits on amounts to be used abroad on cards, there are a number of ways you can access your money while on overseas trip.
Using your cards overseas
When you are overseas, you can use your debit or credit card at an ATM or to make purchases.
•If you are not sure whether your debit card will be accepted in certain countries, ask your bank. But generally, if it has a Maestro or Visa symbol, it will be accepted. This is one of the reasons the CBN’s recent policy on card usage for travellers was released to inform their banks before travelling abroad.
•If you are travelling to any part of the world, you need to be aware of the charges obtainable on cards.
•For security reasons, your bank may also reduce the amount of cash you can withdraw each day from an ATM, but make sure you check this limit with your bank before you travel.
transaction cost on debit cards outside Nigeria
•You will pay a transaction fee every time you use your card to get money from an ATM or to buy something. This is usually a percentage of the value of the transaction, but most banks have a minimum fee per transaction, as much as $3 each time you use your card.
•So bear in mind that using your card a lot, particularly if you are taking out small amounts of money each time, can be expensive. In addition to the transaction fees, your bank will also charge you for converting the transaction into euro or dollar every time you use your debit card.
Credit card charges
•If you travel, you pay a currency conversion fee every time you use your credit card to buy something, or to get money from an ATM. This is a percentage of the transaction amount but there is usually a minimum charge per transaction.
• So if you use your credit card a lot, particularly for transactions of a small value, these charges can quickly add up.
•If you use your credit card to get foreign currency from an ATM, you pay a currency conversion fee and a cash advance fee.
•To avoid paying cash withdrawal fees, you can lodge money in your credit card account. But check first with your credit card provider, as you may still be charged these fees.
•You should also check whether the money you lodge in your credit card account would be covered if your card was lost or stolen, and used by someone else, as some providers would not give you back your money if this happens.
•With some cards, you do not get an interest-free period for cash withdrawals so you pay interest from the moment you take out the money.
•Be aware that in some countries, you may be asked for identification such as a passport when you use your debit or credit card.
Making payment in local currency
•When using your debit or credit card overseas, you are sometimes given two options at point of sale by the retailer. One option is to pay for an item in the local currency (e.g. Pound Sterling or Dollar). The other is to pay in your home currency (Naira). In general, it is usually more cost-effective to pay in the local currency (e.g. Pound Sterling or Dollar) and it may cost you more to pay in your home currency (Naira).
•However, if you do choose the option of paying in your home currency, you should receive a record showing the local currency amount; the exchange rate that applies and the total amount in Dollar or PoundSterling
Foreign currency limits
•If you are entering or leaving overseas and carrying $10,000 or more cash, you must make a declaration to the Customs authority of the member state you are entering or leaving.
•You must lodge the declaration at the airport, seaport or land frontier through which you are entering or leaving the country.