When you take a trip overseas, no matter where you go or why, you’re probably going to end up spending some money. Whether you’re traveling for pleasure and want to purchase souvenirs, food and tickets to local attractions or you’re traveling for business and need to take a client out to dinner there is almost a 100 percent chance at some point during your trip you’re going to reach out into your wallet and take out cash, travelers check or charge. But which one should you choose?
The Myth of the Paperless Society
For the past decade or more, our global society has been reducing its reliance on paper, largely with the help of technology. But that doesn’t mean our society has gone completely paperless. When you travel abroad, it’s always a good idea to have some cash in the local currency and some traveler’s checks. According to the Los Angeles Times, traveler’s checks can not only be quickly replaced but they offer a very low risk of identity theft to users.
As for cash, some retailers don’t take credit cards or travelers checks which makes cash in the local currency your only option. But MSN.com warns that when exchanging U.S. dollars at your bank for the foreign currency you may be facing delivery fees. You can always ask for these fees to be waived. Before exchanging cash, it’s also a good idea to keep an eye on the exchange rate of the U.S. dollar to the currency you need to use. If you exchange your cash too early and the exchange rate drops you could be shortchanging yourself.
Credit Cards Abroad – Good or Bad?
Credit cards are often a good choice for payments and purchases while abroad, but IndependentTraveler.com warns that there may be a charge for currency conversion every time you use your card. In addition, since some countries have designed chip and pin cards requiring a pin on use, there may be certain situations in which a traveler might not be able to use his card. This is, again, why it’s important to have a mixture of credit, cash, and travelers checks.
How about Debit Cards?
Stateside, you probably use your debit card on a daily basis either to make purchases or to get cash from an ATM. But, as with credit cards, a lost or stolen debit card could create a huge security breach and opportunity for identity thieves. Additionally, some smaller community banks may not have access to the worldwide networks that allow ATM transactions abroad. Lastly, ATM transactions can prompt currency conversion and foreign usage fees as can charges made through a debit card.
Three Tips for Money and Travel
- If you plan to bring your credit card and/or debit card with you when you travel abroad, notify your bank and your credit card issuer of your trip. When a financial institution suddenly begins to see transactions from a foreign location they may block the card until they clear the transactions with you. Notifying them in advance that you will be traveling and where will ensure that your own access to your money isn’t blocked.
- Know all the fees ahead of time. The fact that there are fees for certain transactions is not necessarily surprising or bad, but if you aren’t aware in advance of what fees you may be facing when you use certain forms of payment, you could easily go over budget on your trip. Other factors that could force you to spend much more than you expected include incurring cell phone roaming charges and requiring medical treatment without the benefit of travelers health insurance. Luckily, you can contact your cell phone company in advance to determine what your roaming fees may be and how to avoid them and you can secure travelers health insurance before you leave.
- Monitor what’s in your wallet. It’s one thing if a thief gets hold of your credit card or debit card; it’s a whole ‘nother thing if he also has your Social Security card, your passport, a blank check and so on. Clean out your wallet so that you have only the minimal documents that you need to take part in planned activities from day-to-day. Leave everything irrelevant at home or in the safe at your hotel.
With a little research and a well executed plan, you can easily contain your currency exchange fees, usage fees, and other costs when spending money abroad.