One of the greatest joys in life (well, for me, personally) is traveling abroad. Before embarking on an international trip, you may have marked off the usual checklist items of packing your luggage, booking a place to stay, hiring a car rental, finding a pet sitter, and maybe buying a new outfit or two!
With the excitement of the upcoming trip, you may have missed a few key financial checklist items. Below are some tips to review before your vacation:
Alert Your Bank and Credit Card Provider
From personal experience, the worst thing that can happen on your trip is dealing with a frozen account. Your bank or credit card provider may freeze your account if they see international charges coming through that look suspicious. Be sure to contact your provider to make them aware of your upcoming trip.
Be Aware of Conversion Rates
Think about this: You’re gearing up for your big, two-week-long trip to Europe. You’ve budgeted $5,000 for the trip. This doesn’t mean that you’ll have €5,000 to spend (We wish!). You need to be aware of the conversion rate for wherever you’re visiting. As of today, the euro to dollar conversion rate is €.91 to $1. So, let’s say you want to convert the entire $5,000 to euros, without conversion fees, you’d be getting €4,550.
Be Aware of Foreign Transaction Fees
You may be unaware of the fact that your credit card is charging you a foreign transaction each time you use it to make a purchase outside the US. To eliminate the shock factor when you review your transaction history, be aware that some institutions charge around a 1% – 3% fee. This may seem like a small amount, but if you’re using your card for every purchase you make, the fees will start to add up.
Use a Credit Card Without Foreign Transaction Fees
Referencing the item above, there are some credit cards that do not have foreign transaction fees. Check out this list to see if your credit card does not charge fees.
Do Your Research on Where to Convert Cash
It’s not a surprise that many tourists get swindled while converting money. Most of us tend to be in the vacation mindset and focused on our next adventure, not the best conversion deal. Be sure to do your research on the best place to convert your cash. Airport exchanges and currency exchange shops in tourist areas are going to be the least ideal places to convert your money. They know you need the money for shopping and travel and will charge higher exchange rates to make a profit.
If you use a larger bank, try to find a branch in the country you’re visiting. You may also be able to find an ATM. The bank and ATM will, of course, charge fees as well, but these fees are going to be lower than the exchanges trying to make a profit. You can also contact your bank or credit union before you travel to see what conversion rates look like and convert your money beforehand.
Bottom Line When Traveling Abroad
Don’t stress over money while you’re on vacation. It should be a relaxing and enjoyable time for you. If you follow the tips above, you’ll be able to have a trip that doesn’t involve any financial frustrations. Safe travels!
Referenced: https://www.investopedia.com/articles/personal-finance/022415/worst-place-exchange-currency.asp
