Staying within your budget while traveling abroad is likely one of your main concerns. But once you’ve taken flight, it’s important to know that your finances are in order so that you can put your worries aside. With the proper planning and the right low-fee bank accounts, you can enjoy your vacation and avoid common money mistakes while traveling. Here are the most important money must-dos for international travelers.
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1. Avoid foreign transaction fees
Most major credit cards charge a foreign transaction fee, usually 3%, for purchases made abroad. These fees can quickly add up, and by the end of a family vacation, you can have easily spent hundreds of dollars in fees with nothing to show for it. If you want to avoid unnecessary transaction fees, use one of the best travel rewards credit cards with no foreign transaction fee.
2. Get a good travel credit card
If you’re spending quite a bit on travel, it might be beneficial to get a credit card that rewards travel purchases. You can earn points and miles for future vacations or redeem your rewards for more immediate needs like taxi fares across a new city. Some premium travel credit cards even offer perks like free airport lounge access and priority status with hotel chains that can make your trip a little more luxurious, while others offer travel rewards for no annual fee.
3. Know the exchange rate
Always look up the exchange rate before you go abroad and figure out how to convert the local currency into U.S. dollars. This will allow you to know how much your money is worth, so you can plan and budget accordingly. Download a currency conversion app if you need to. If you don’t learn how to convert the local currency, you’re likely to end up overspending on everything. On top of that, not knowing the exchange rate can leave you paying outrageous fees to exchange your dollars.
4. Avoid currency exchange centers
Knowing your options for exchanging currency will help get you the best exchange rate possible while minimizing your fees. In general, stay away from currency exchange centers. They usually charge fees and offer an exchange rate that doesn’t come close to the current market rate so they can make money off your exchanges. Instead, withdraw local currency at an ATM or exchange your money at a bank before your trip. You can also exchange money at many local banks, and they’ll typically have fair exchange rates and no fees.
5. Get a debit card that reimburses international ATM fees
If you need to make a withdrawal at an ATM while abroad, your bank might charge an international fee associated with this convenience. On top of that, the owner of the ATM you use is likely to charge you a fee as well. To avoid these fees, which add up quickly, look for debit cards that offer unlimited free ATMs worldwide and ATM fee reimbursements. If your debit card doesn’t offer this perk and you don’t want to open another account, make sure you understand your card’s fees at the very least. Some banks charge fees for currency conversions on top of charging your regular ATM fees. Don’t get caught paying unexpected and unnecessary withdrawal fees.
6. Notify your bank of your travel plans
Always let your bank know when and where you will be traveling abroad well in advance. You don’t want them to freeze or shut down your card for suspicious or fraudulent activity because of surprise international purchases. You should also update your contact information so they can easily reach you if something questionable comes up. Keep them in the loop so you can always access your money.
7. Get a backup ATM card
Having a backup ATM card is always smart, but it’s particularly important for international travel, where you’re unlikely to be anywhere near a branch location and a replacement card could take weeks to arrive. One of the most common money emergencies abroad is losing your debit card or having your debit card shut down with no way to access cash. Opening a free checking account with an online bank will get you a backup ATM card, and you’ll even find that some of these online banks offer ATM fee reimbursements and no foreign transaction fees. This gives you multiple forms of payment and cuts down on your fees.
Doing your research and being prepared with these simple money-saving tips can save you a huge headache while traveling abroad.
View more information: https://www.fool.com/the-ascent/credit-cards/articles/7-money-tips-for-international-travel/