Educate yourself before using your credit card overseas.

Credit cards are a great addition to any trip, particularly when traveling overseas. They offer some of the best exchange rates and cards are more secure than carrying around cash. Plus, you don't have to waste a ton of time trying to cash travelers checks.

There are perils to using credit cards as well, however. Imagine spending $3,000 on a trip to Europe only to arrive home and find you spent much more.

Here's the scenario: You use your rewards credit card for most purchases because, in addition to the advantages listed above, you earned rewards in the form of extra cash or airline miles for every purchase.

Many merchant politely asked if you'd like to convert your purchase from the local currency into U.S. dollars. Delighted at their thoughtfulness, you agreed because you then were able to see your transaction conducted in a familiar currency.

Upon returning home you found an extremely unhappy surprise in your credit card bill: A 10-percent mark-up on your European transactions. That extra $300 is due to a combination of two things: Foreign Transaction Fees and Dynamic Currency Conversion Fees.

• Foreign Transaction Fee

This fee is fairly typical and is assessed by most credit card companies when you make purchases abroad. A foreign transaction fee is usually assessed around 2 percent to 3 percent of your purchase. You can reduce the fee by applying for a no-foreign-fee credit card before you leave. Capital One has a good reputation for their 0-percent foreign fee.

• Dynamic Currency Conversion

This a technique merchants use to make extra cash on travelers' electronic transactions. They offer to convert your transaction into U.S. dollars then charge a fee as high as 7 percent of your purchase to make the "free" conversion. You can easily avoid this charge by simply insisting your purchases be transacted in the local currency. If you're not sure of the exchange rate, carry a small conversion chart so you'll understand exactly how much you're paying.

• Which Cards Are Accepted

It's important to know which networks are accepted in the country to which you're traveling. MasterCard and VISA are accepted nearly everywhere. While American Express also has a global network, acceptance varies from country to country. Discover Card is the least useful card overseas and is rarely accepted outside the U.S.

• Cash from Cards

That brings us to using your credit/debit cards for cash. Until 2008, you only paid a flat fee for each cash withdrawal you made from a foreign ATM, regardless of the amount of money you received. Lately, however, some big banks have added a conversion surcharge. At present, Bank of America, Citibank and USAA offer the best deals, although you might check with your local credit union. These rates are subject to change.

• Let Them Know Before You Go

To protect your interests, some credit card companies will suspend your card if they notice suspicious charges made outside the country. Notifying them of your plans will avoid any unpleasantness and extra fees.

• Be Prepared for Card Theft or Loss

Don't let credit card theft or loss interrupt your trip or lead to extra expenses. Depending on the country or countries your visiting, it can be either impossible or very difficult to reach an American 1-800 number from some countries. In addition, some of these U.S.-based operators won't be able to help you.

Before you pack your suitcase, check online for the specific numbers you'll need for each country you plan on visiting. Write down these numbers and your card information (in code) and store the details separately from your credit cards.

This information also might be left with an easily accessed relative, trusted friend in the U.S., or backed up to a protected Internet account.

Also note the address and phone number for the local embassy as you may need their help to report credit card theft or loss to the local police.