June 18, 2018
What is the best way to take money abroad? From currency conversion to using a credit or debit card abroad, there are numerous charges and price variances you should be aware of when you travel. The more money savvy you are, the more you can save—and the less you have to worry about your finances when you are on vacation or traveling for work.
Why stop being a savvy traveler when you leave the country? Read on to learn how to get the most out of different payment methods when traveling abroad.
When planning your trip and purchasing major travel expenses, it’s tough to beat the benefits of using credit cards abroad. You can buy your airline tickets, hotel, and car rentals with your card securely and conveniently, and earn credit card rewards points in the process if you use a rewards card.
One of the biggest advantages of using your credit card abroad is that foreign transactions will utilize publicly available exchange market rates, providing you with a market-determined rate for exchanging currency instead of relying on a local exchange merchant. This makes using your credit card one of the best payment options when out of the country.
Are there any additional fees for using your credit card abroad? Many cards charge a foreign transaction fee for international purchases. So, if the foreign transaction fee is 3%, for a $40 silk scarf you buy at a boutique shop in Italy, you’ll pay an extra $1.20 (3% of $40) to have your payment converted into the local currency. Check with your credit card issuer to see if a fee applies.
Many people wonder if they can use a debit card abroad. Debit cards are convenient when travelling. You can walk up to an ATM and get cash—just like you would at home—except you’ll get the local currency instead of U.S. dollars. Much like credit card usage, your debit card will convert your money for a competitive exchange rate. Again, it’s a good idea to check with the financial institution that issues your debit card to let them know when you’ll be overseas.
While the most convenient and secure way to carry money abroad is by taking your credit card, it’s still important to have cash for tips and merchants that don’t accept credit cards or travelers checks. It’s also smart to already have some foreign currency on you when you arrive so you have money available for immediate expenses.
Not sure how to convert currency? You can convert it before you leave, or you can do it abroad. Most local banks offer this service, but if you bank with an international bank, look for a local branch near you. If you’re not an account holder with the bank you use, they may charge you a transaction fee.
Travelers checks serve as a safe cash alternative when traveling abroad. Many people believe they are the best way to carry money overseas because of their security. If they become lost or stolen, you can usually get them replaced within 24 hours.
Prepaid travel cards similar to travelers checks are also a safe cash alternative. You can use them like a credit or debit card for purchases and ATM withdrawals. Visa and Travelex are two popular companies that issue these cards.
No matter where you travel, stay aware and watch out for pickpockets, especially in large crowds. Wearing a concealable money belt underneath your clothing will help keep your valuables secure while hitting the sights. Even if you’re cautious, you should never carry large amounts of cash in your wallet. Just carry what you need, and keep the rest secure in your hotel room in a security safe.
Just in case, it’s wise to bring copies of important documents such as your credit and debit cards, passport, and travel itinerary. Then, should you lose any of these, you’ll have the right documentation on hand to prove your identity, close accounts, and handle any other business you need to take care of due to the loss.
Once you know how to exchange currency and get the best rates, and to keep your money safe, you are well on your way to making your spending while abroad as efficient and secure as possible. Each method of carrying money when traveling internationally has its advantages and drawbacks. Stick with lower fees when you can, plan out how much cash you’ll use, and keep alternatives in mind just in case one method doesn’t work out for you.
Using a credit card when you travel could make travel easier, get you out of a bind, and even earn you discounted or free travel. Check out these eight reasons why you should include at least one credit card on your packing list before your next trip.
Do you plan on vacationing abroad soon? If so, consider using a credit card instead of cash as much as possible when traveling in other countries. It’s best to carry a mix of credit cards and cash while you’re on the road, because not all vendors accept plastic and, if you lose your card or it’s stolen, you might need cash to hold you over until your replacement card arrives. For the same reason, it’s always a good idea to have a backup credit/debit card, as well as extra cash, that you keep secure in your hotel room when traveling.
Insuring a trip may not be anything you’ve ever considered prior to the COVID-19 pandemic. But with travel restrictions, flight cancelations, and other pandemic-related challenges to getting where you need—or want—to be, altered travel plans have become a reality for many. But even before the word “coronavirus” became so entrenched in the headlines, there were plenty of reasons to consider travel insurance to help protect your investment in travel plans.