Should You Use Credit Cards or Bank Accounts Abroad?

When you first move abroad, using your home country credit card might feel like the best idea. After all, it earns rewards, it works, and you don’t need to worry about opening a new account in a new country. However, relying solely on an international credit card could end up costing you in the long run. 

Just like anything else, there are pros and cons when it comes to using both international credit cards and local bank accounts. Fortunately, most people abroad benefit from having both.

International Credit Cards

From Capital One to Bank of America, your choice of picking an international credit card is endless. Visas and MasterCard’s are globally the most accepted method, so you’re sure to find vendors who accept payment that way.

Pros:

• Travel rewards, points, and perks like lounge access or travel insurance
• No foreign transaction fees on certain cards
• Built-in fraud protection and dispute resolution
• Easy to manage abroad

Drawbacks:

• Exchange rates can fluctuate
• Some cards still charge hidden fees on foreign transactions
• Not every shop, landlord, or government office accepts credit cards abroad
• Fraud risks and potential freezes when banks flag “suspicious” international activity

Local Bank Accounts

By doing a little research, you can find that most countries allow new residents to open bank accounts with the correct documentation. However, it may be difficult if you are a new resident — but the effort can be worth the long process.

Pros:

• Easier to pay rent, utilities, and day-to-day expenses
• Direct access to local currency without exchange fees
• Helpful for building a financial footprint in your host country
• More reliable for long-term stays

Drawbacks:

• Opening an account may require residency, a work visa, or tax identification
• Paperwork, language barriers, and wait times can slow the process
• Fewer perks compared to credit cards

Why a Hybrid Approach Works Best

Most expats and digital nomads find that having both is the smartest way to maximize usage. Keep your international credit card for travel rewards, online purchases, and big-ticket items. Use your local bank account for expenses like rent, utilities, and everyday expenses. 

Using the hybrid strategy ensures that you get the best use out of both accounts without unnecessary fees or issues. Utilize both accounts to your advantage to make your long term stay financially protected. 

Let Your Lifestyle Guide You 

There’s no one “right” answer for everyone traveling abroad. The best set up for you depends on your lifestyle, the length of your stay, and how you prefer to manage your finances. A credit card might be enough if you’re hopping between cities often or a short-term traveler. If you’re an expat setting roots into a new country, utilizing the hybrid approach may be best to give you the most flexibility and peace of mind.