Before you travel abroad, whether it’s for school, work or a (much needed) vacation, make financial planning part of your travel checklist. You may be a money maven in the U.S., but what you think you know may not translate to your travel destination. Below are tips to help ensure your big trip abroad doesn’t become a big financial disaster.
Ever visit a city and find yourself surprised by how expensive it is? Maybe you wish you’d researched the area and the cost of living outside of the hotel. Before you travel abroad, take the time to learn about the culture you’re about to experience. Find out what type of currency is used and the rate of conversion to U.S. dollars. And search travel forums to find out what kinds of tourist scams might exist so you can avoid them at all costs.
Get in touch with your bank or credit card company to let them know where you’re going and how long you’ll be out of town. If you don’t, and your bank sees charges appearing in another country, they’ll most likely flag the charges as suspicious or fraudulent and suspend your card. If this happens, don’t get mad (they’re just doing their job – protecting your money!) Ask ahead of time for an international phone number to reach your bank in an emergency. The 800 number on the back of your card typically won’t work outside of the U.S. or Canada.
Most banks charge 1-3% on purchases when you use your debit or credit card abroad. Once you’re at your destination, insist on being billed in foreign currency (this is an option whether you’re paying with cash or a card). If you’re billed in dollars, you will typically pay more for hidden fees and a higher exchange rate.
If something happens to one card, it may take days to get a new one. It’s best to carry multiple credit cards and cash, as well as a cash card or debit card, just in case something goes wrong. (If you don’t have a credit or cash card but feel you need one, research the best cards to use abroad.) If you can, only use your debit card to withdraw cash. If you accidentally overdraft your account or are billed incorrectly for a debit transaction you can quickly (and unexpectedly) run yourself out of money. Also, stick to using bank-associated ATMs; they are more reliable and won’t charge you as much for their services. Finally, save your credit cards for big purchases (i.e. airline tickets, hotels, restaurants, etc.) That way, you know that A) you have credit available in case of an emergency and B) you can protect your credit card information from illegitimate vendors. Here are a few more ideas.
Everything is more expensive at the airport – even money exchange fees! The airport is easily the most convenient place to exchange money. But in actuality, you pay for that convenience. Plan ahead with a budget and take care of currency conversions before you depart. And this tip is crucial: try not to convert more money than you’re going to spend! It costs even more to convert foreign currency back into U.S. dollars.
If you’re traveling within Europe, you may run into issues with their smart card technology, which most U.S. credit cards don’t have. You may find that some merchants won’t accept your card if it doesn’t have this technology; but know that if you have a Visa or MasterCard, they are obligated to manually swipe it.
It’s easy to get caught up in the beauty of your surroundings, or lost in a text message, but try to keep your eyes open for suspicious people. As a tourist, you’re automatically a target for pick pockets. Keep your money close to your body and in front of you rather than behind you. It’s smart to use slice-proof purses or wallets that pick pockets can’t easily get into.
No matter how carefully you budget and plan for your time away, unexpected expenses are likely to accrue. Don’t let it stress you out. If you can, set aside a mini-emergency fund you can access if something comes up. Simple steps like these will help you cover your bases, so you’ll have peace of mind when it comes time to enjoy yourself on your big trip abroad.
We want to hear it! Did you run into a financial mishap while vacationing away or studying abroad? Are there money tips we haven’t shared that worked well for you? We want to hear all of the juicy details (well, just the ones related to money matters).