Hooray! You can finally take that trip abroad you’ve had to postpone for the past two years.
Before you head to the airport, we want to share some important financial tips that will help you save money and avoid frustrating surprises after you arrive.
With all the research, booking flights and accommodations, deciding your wardrobe, and the myriad other details getting ready to go, probably the last thing on your mind is using your money once you’re there.
But taking a few steps before departure and following our advice after you arrive will go a long way to making sure that dream trip isn’t spoiled by money nightmares.
Be sure to contact your bank and credit card providers to let them know the dates and locations of your travel plans. Otherwise, when making a purchase abroad you could trigger a fraud alert that will automatically freeze your account.
This is a great service for your protection if your card has been stolen or financial info hacked. When buying that cute dress in Paris – not so much.
Download apps for the cards you will be using on your trip. Doing so makes it easy to keep up with your expenditures no matter where you are.
You’ll need a credit card for purchases and a debit card for ATM withdrawals. Does your credit card charge a foreign transaction fee? If so, apply for one that doesn’t because this can add from 1-3% to your balance every time you use your card.
Bonus tip #1: It’s called “American” Express for a reason. If you’re planning on making extensive use of an American Express card in another country, think again. Many merchants accept only Visa and Mastercard.
Since credit cards offer more of the fraud protection we just mentioned, we don’t recommend using a debit card for everyday purchases abroad unless you’re on a strict budget and don’t want to overspend. But you will need some of the local currency for small miscellaneous transactions.
Be aware that for ATM withdrawals abroad many big banks charge a $5 service fee plus another 3% foreign transaction fee. Ouch!!
Avoid all this by opening an account with a no-fee debit card. Our personal choice is Charles Schwab. In addition to no fees and no minimum balance requirements, Schwab also reimburses any ATM fees you are charged by other banks. What more could you ask?
When using your credit card for purchases abroad the machine may ask if you want the transaction to be in the local currency or dollars. It may seem logical or polite to select the currency of your home country.
Don’t. Making this choice allows third parties to determine the exchange rate, and you can be certain it won’t be in your favor. Choose the local currency and let your own financial institution make the conversion with very little, if any, markup.
This same scam can become more complicated when using your debit card for ATM withdrawals. Sometimes the machine will suggest you allow it to make the conversion to your home currency. Always pick the “Decline Conversion” button.
You think you’re done, but then another screen can appear with an ambiguous message that makes it seem like you must say yes. Keep choosing “No” and you’ll get your euros or pesos at the best exchange rate.
Bonus tip #2: Euronet ATM machines are located all over Europe. Avoid them like the plague. This outfit charges outrageous fees, plus offers poor conversion rates.
Similarly, exchange booths and ATMs in airports, while convenient, are not your friend. Withdraw a small amount if you need a little cash to get started with your trip. Otherwise, stick with machines connected with major banks.
In major tourist destinations professional pickpockets make their living by preying on unprepared visitors. Don’t let them spoil your trip. Exercise caution and common sense.
Avoid carrying a purse with a strap that can be easily snatched.
Keep your bags in your lap or under your legs when sitting on public transportation.
Hold your belongings close to your chest on crowded subways. Be aware of your surroundings, and don’t hesitate waiting for the next train if the one you’re about to step into is packed.
Are you taking full advantage of the miles/points earned with your credit cards? Many people “leave money on the table” because they don’t understand the benefits of strategic use of credit for everyday purchases.
We’re currently traveling in Europe for several months. Although we live on a Social Security budget, almost all of our accommodations have been paid for with points we earned over the past six months. Can you believe it?
Meanwhile, our expenditures here are accumulating points and miles that we’ll use for future travel.
Also, by choosing the right cards we’ve received complimentary Global Entry with the added benefit of TSA PreCheck when going through U.S. security screening. Another perk we enjoy is lounge access in many airports around the world.
Consider opening a new credit card with an attractive signup bonus to pay for your upcoming trip. You could easily find yourself with enough miles or points to begin planning your next adventure before you even leave!
Are you ready for a summer trip? Have you considered how you will save/spend your money while adventuring? What financial tips have you applied? Which ones have you not yet considered?