Introduction
Planning a trip abroad is always an exciting adventure, but amidst all the wanderlust, it's essential to address practical concerns, like handling money while traveling. If you've ever wondered about the best ways to pay for your purchases and whether to exchange money before or after arriving at your destination, you're not alone. In this blog post, we'll explore the most efficient ways to handle cash and payments while traveling abroad. Print or save the checklists below for quick reference for both pre-travel and in-country tips.
Credit Cards or Cash: The Ultimate Dilemma
One of the most common questions travelers face is whether to rely on credit cards or cash for their expenses overseas. Our advice? A mix of both! Having multiple payment options can save you from potential hassles and ensure you're prepared for any situation.
Credit Cards: A Savior Without International Fees
If you're a savvy traveler, a credit card without international transaction fees can be your best companion. Look out for cards like the Capital One Venture card that offer this perk, as it can save you money on each purchase made abroad. However, before you embark on your journey, be sure to check with your credit card company about any other foreign transaction charges that may apply.
ATMs Abroad: Your Source for Local Currency
While credit cards are great for most purchases, it's wise to have some local currency on hand for those situations where cash is necessary. Upon arrival, consider withdrawing a reasonable amount (around $200) from an ATM to cover small expenses or emergencies. Keep in mind the fees your bank charges for international withdrawals, and to avoid paying multiple fees, take out a larger sum rather than frequent smaller withdrawals.
Timing is Everything: Exchanging Money at Your Destination
Exchanging money can be done either before you leave for your trip or upon arrival at your destination. It's generally recommended to exchange money at your travel destination since the exchange rates and fees might be more favorable than those at airports. Local banks or currency exchange centers in the city can offer better deals.
Divide and Conquer: Smart Cash Management
While traveling, it's crucial to keep your money safe. One way to do this is by dividing your cash into different bags or pockets. This strategy ensures that if you lose one bag or fall victim to pickpocketing, you'll still have backup funds to rely on. Stay vigilant and avoid displaying large sums of money in public to reduce the risk of theft.
Uber and Beyond: Using Cards for Convenience
Thanks to the wonders of modern technology, services like Uber are accessible in many travel destinations. Utilizing your credit card for transactions like this can offer both convenience and security. Make sure your card is enabled for international use and notify your bank and credit card company about your travel plans to avoid potential issues.
Informing Your Bank: A Precautionary Measure
To prevent your bank from flagging your transactions as suspicious activity, give them a heads up about your travel itinerary. Informing your bank and credit card company about your travel dates and destinations can save you from unnecessary headaches and ensure smooth financial transactions while abroad.
In Conclusion
Traveling abroad is an enriching experience, and by sorting out your cash and payment options, you can make your journey even more enjoyable. With a credit card free from international fees, some local currency on hand, and a cautious approach to cash management, you'll be well-prepared to explore the world with confidence. Bon voyage!
! Disclaimer !
The information provided in this blog post is based on personal experiences and should not be considered as professional financial advice. Before making any decisions about handling money while traveling, consult with your bank or financial institution to understand the specific terms and conditions that apply to your accounts and credit cards.
Best Ways to Handle Money Abroad | Travel Finances: Pre-Travel Checklist
1. Credit Card Evaluation
Check if your credit card charges international transaction fees.
Research credit cards like Capital One Venture that offer fee-free international transactions.
Inquire about any other foreign transaction charges your credit card may have.
a. Backup Payment Methods:
Pack a backup credit card or an alternative form of payment in case your primary card is lost, stolen, or declined. Pack your spare card in a separate wallet or in an inconspicuous location in your bag (like your underwear compartment)
2. ATM Considerations
Verify if your bank allows international ATM withdrawals.
Note the fees associated with international withdrawals.
Plan to withdraw a reasonable amount (e.g., $200) from an ATM upon arrival for "just in case" expenses. (Transfer funds to your debit card account, if needed)
a. Backup Payment Methods:
Pack a backup credit card or an alternative form of payment in case your primary card is lost, stolen, or declined. Pack your spare card in a separate wallet or in an inconspicuous location in your bag (like your underwear compartment)
3. Timing of Money Exchange
Decide whether to exchange money before leaving or upon arrival at your destination.
Research local banks or currency exchange centers for the best rates and lower fees.
Avoid exchanging money at airports, where rates and fees might be higher.
4. Using Credit Cards for Convenience
Ensure your credit card is enabled for international use.
Inform your bank and credit card company about your travel dates and destinations to avoid any issues with transactions.
5. Notify Your Bank
Give your bank a heads up about your travel itinerary to prevent them from flagging your transactions as suspicious activity.
6. Emergency Funds
Set aside a separate emergency fund, such as travelers' checks or an extra credit card, for unforeseen circumstances.
7. Budgeting
Create a travel budget to manage your expenses effectively.
Prioritize using credit cards for larger purchases to earn rewards or cashback benefits.
8. Research Local Payment Practices
Familiarize yourself with common payment methods in your travel destination (e.g., cash, cards, mobile payments).
9. Currency Conversion Apps
Download currency conversion apps to help you quickly understand prices in your home currency.
10. Keep Important Numbers Handy
Make a list of important phone numbers, such as your bank or credit card company's customer service and card activation, in case of emergencies.
11. Stay Informed
Stay updated on travel advisories and financial regulations in your destination country.
Travel Finances: In-Country Checklist
1. Smart Cash Management
Withdraw ~$200 from an ATM with your debit card (preferably in the city center at a local bank to avoid higher fees usually at the airport)
Separate cash into different bags or pockets to minimize the impact of potential loss or theft.
2. Security Precautions
Avoid displaying large sums of money in public places.
Be cautious when using ATMs in public and avoid sharing sensitive card information with strangers.
3. Stay Updated
Keep track of your credit card and bank statements while traveling to detect any unauthorized charges promptly.