When travelling overseas for the first time, trying to avoid nasty financial surprises is probably among your biggest concerns. Fortunately, following a few simple measures can ensure that you circumvent most pitfalls that might come your way.
1| Notify Your Banks.
Start by determining which debit and credit cards you wish to take with you and then inform their issuers of your travel plans before leaving the country. This is because card issuers are known to temporarily block cards when they suspect fraudulent transactions.
Most financial organizations give their customers the ability to set travel notifications through their online banking platforms. Alternatively, you might need to speak with a representative over the phone.
2| Buy Currency Before Leaving.
Depending on where you’re going, you might need an access to varying amounts of cash in local currency. Buy currency before you leave the country, failing which you might have to deal with high fees and less-than-favorable rates offered by currency exchange bureaus and hotel concierges.
3| Use Your Mobile Phone Sensibly.
If you plan to use your mobile phone to make calls or surf the internet when overseas, consider investing in an international roaming plan. If you feel that your service provider does not have affordable alternatives, take a look at what’s on offer by network providers in the country you’re visiting. Several countries provide cost-effective plans for foreign travelers that you may get by providing your passport details.
4| Use Local Currency.
Every time you make a payment using a debit or credit card, you end up losing some money through exchange rate markups or fees. When paying for small purchases, use cash as and where possible. Try spending any cash you have left toward the end of your trip because you don’t want to lose more money through another round of currency conversion.
5| Use Cards Carefully.
Depending on the country you’re travelling to, you might need a chip-enabled card. This is the case if you plan to have your holiday pretty much anywhere in Europe, where cards with just magnetic strips are no longer accepted. Fortunately, banks in most countries the world over now issue chip-enabled cards upon request.
While Visa and Mastercard are accepted by most merchants that accept card payments, American Express does not find as many takers. Discover and Diners Club cards are accepted in even fewer places.
Using a debit or a credit card to pay for a transaction gives you access to similar currency exchange rates, so you may use either. However, credit cards tend to come with additional international transaction fees.
When it comes to withdrawing money from an ATM, use a debit card instead of a credit card. This is because the latter requires that you pay cash advance fees, and your withdrawal starts attracting interest from the same day. In some cases, you might need to pay a fee to the local ATM operator even if you use your debit card.
6| Make Payments in Advance.
If you want to steer clear of dealing with unfavorable exchange rates when paying for your accommodation or hired car, consider making these payments in advance from your home country. You may turn to specialist money transfer companies such as XE, TransferWise, WorldFirst, or OFX to make cross-border payments. By doing so, you benefit by getting highly competitive exchange rates and paying little to no fees.
You might feel a little overwhelmed before your first overseas holiday, and that’s quite normal. Planning your finances is bound to hold you in good stead, and it also helps you stick to a predetermined budget. All you need to do is follow a few simple guidelines, and then prepare to make the most of your time and money.
Jon Dela Cruz works as a researcher with iCompareFX. This website gives people easy means to run side-by-side comparisons of the world’s top overseas money transfer companies. When he’s not working, Jon likes listening to a variety of music.