Over the years, I have been asked many questions related to money when traveling abroad. Therefore, I put together a few simple tips based on my experience. Hopefully, they will help you avoid extra charges and issues with foreign currency. Here are my 4 money tips for international travel.
PLEASE NOTE: Every country is different. Make sure to research information specific to the country you plan to visit.
1. CURRENCY EXCHANGE
Exchanging money at the airport is usually more expensive than at local currency exchange stores. If you want to avoid getting charged even more, don’t do it at the airport you depart from. Wait to get to your final destination.
We personally find it convenient and sometimes necessary to exchange some money when we land.
There are a few reasons why:
• In many countries, you need to pay for transportation to the hotel in cash.
• You may not be able to exchange money once you get to the hotel. It might be too late at night, or there might not be places to exchange money
•You might need cash to buy water or snacks from local stores or to tip someone.
• Having some cash will give you time to familiarize yourself with where you are, know how much you will need for your stay, and the options available to get local currency.
HOW MUCH TO WITHDRAW: We usually exchange between $100 and $200 at the airport and figure out the rest later. We avoid having too much money on us and use our credit cards whenever possible. If the country we visit relies heavily on cash, we either find a currency exchange store or strategically use our ATM to withdraw extra money – keep reading for more details.
CURRENCY EXCHANGE STORES: When exchanging money at a currency exchange store, always ask if they charge a commission. The majority don’t but some might. Also, check their exchange rate and use a currency converter for comparison. You can check online or use one of the many apps you can download on your phone – I use GlobeConverter – Currency & Units Converter (free).
2. CASH
RESEARCH: Research the country you will visit – What’s the cost of living? Are credit cards accepted almost everywhere? These things will give you an idea of how much cash you will need to carry with you.
DON’T CARRY TOO MUCH CASH: Even when traveling to a country heavily relying on cash, we always recommend not having too much cash on you. If you plan your day and you do some research before traveling, you will know how much you need to carry for the day.
SECURE YOUR CASH: If your hotel has a safe, leave the rest of your cash there. If they don’t, avoid exchanging/withdrawing too much money at the same time. Alternatively, try to find a very good hiding spot. Not the safest thing, but sometimes you might not have any other choice.
DON’T DOUBLE EXCHANGE YOUR MONEY: And remember, if you are left with extra foreign currency when it is time to go back home, you will need to exchange that money again, which will incur additional costs. This is another reason only to exchange what you need.
3. ATMs
CONTACT YOUR BANK: Before you travel, ensure your debit card/ATM card works abroad, specifically in the country you will visit. Until not too long ago, it was crucial to notify your bank before traveling abroad to avoid a block on your debit or credit cards.
Nowadays, this step is usually unnecessary with the new chip cards (the ones that contain a visibly embedded microchip). To be 100% safe, you can always log in to your bank website or app and let them know via the travel notifications section.
WITHDRAW FEES: Most banks charge you an extra fee to withdraw money abroad (way more than they charge for withdrawing at a local ATM that doesn’t belong to your bank). Moreover, the bank in the country you visit will also charge you a fee. The two fees combined can end up costing you around $10 for one withdrawal, so use the ATM strategically.
EXCHANGE RATES AT ATM: The biggest advantage of exchanging money with your ATM card is that all cash withdrawals, regardless of size, are exchanged based on the wholesale exchange rate, which is usually reserved only for very large interbank exchanges. This rate is often significantly better than what you can get from exchanging money at a local exchange counter.
HERE ARE A COUPLE OF TIPS FOR USING AN ATM ABROAD:
• Before using the ATM, find out the value of the local currency so you know how much you are withdrawing in your currency. Too often, I randomly chose a number to find out later I only withdrew $10 or took out way more than I needed.
• If possible, choose to withdraw money when the bank is open so that if something happens, you can ask for assistance from someone working there. One thing is for sure, do not keep trying to use your card without knowing what is happening – the ATM might end up eating your card in the process.
4. CREDIT CARDS FOR TRAVEL
A month or so before leaving, contact your bank and make sure your credit card can be used abroad – the major ones (VISA, MASTERCARD, AMEX) usually can. Many credit cards charge a foreign transaction fee of up to 3% of the amount you spend every single time you swipe the card. 3% might not seem like a lot, but it does add up, especially when you spend significant amounts of money. If so, I recommend applying for a credit card that doesn’t charge this fee.
Like debit cards, credit cards with a chip don’t require you to notify the bank when traveling abroad. Still, we recommend doing it anyway (especially if you usually only use that card in your country). Most banks have a dedicated Travel Notifications section on their website and mobile app where you can enter your travel dates and the country/ies you will be visiting.
💳 CHOOSE THE RIGHT CREDIT CARD.
When traveling abroad, these are the credit cards I use that do not charge a foreign transaction fee:
Some of the cards I mentioned might only be available in the USA, but you can research others in your country. I recommend traveling with more than one credit card in case you lose one, it demagnetizes, gets damaged, or is not accepted (many businesses do not allow you to use AMEX). If you apply for a new credit card, look for one that allows you to collect points and/or miles for your purchases or offers cashback.
I hope my 4 money tips for international travel will help you avoid extra charges and other issues. Based on your experience, do you have other tips to share with Your Travel Friends? Please leave a comment below and help a fellow traveler out!
