For some, travelling to another country on business or pleasure means holing up in a resort or hotel designed so you don’t have to lift a finger — or even know you’re overseas. Huge, all-inclusive resorts can take care of your purchasing needs quickly and efficiently.
For you, however, that’s a waste of a trip.You want the full experience. You want to eat and shop locally, find those cool little stores, dine at local cafes, stands, or markets.
You’re in a new land, so you need to find a way to pay for what you buy without getting stuck with a hefty set of fees or finding yourself suddenly poorer than you were when you left thanks to a dip in the exchange rate.. Here are a few tips that can help you enjoy your trip.
Exploring another country can take you to locations where your choices on how to pay are limited to what local technology allows. Also, if you plan to go outside the most well-trod paths, you will likely need a reasonable amount of cash on hand to cover food and other purchases — that roadside food stand that your mate insists is a hidden gem might have Square, but don’t depend on it.
Conventional ways of paying or even accessing cash that you use automatically in your home country can rack up huge fees elsewhere. But, currency value shifts can cause you to lose value on dollars you’ve already converted.
So how do you split the difference between less fiddly payments and knowing how much that extravagant dinner actually costs?
You can minimise risks in the following ways:
Watch financial markets in the weeks leading up to your trip. Most wild currency fluctuations come with prior warning. Keeping up with them will educate your decisions on converting cash.
Let exchange rates determine whether or not you prepay for hotels and other services. If markets suddenly swing in your favour, take advantage and book that tour (or pay that Airbnb fee upfront) before currency values shift again.
Explore using travel debit cards. Some cards come with the flexibility to take advantage of changing exchange rates. Most conventional credit or debit cards don’t help with rates, and using them at an ATM can stick you with fees of up to $10 or more. The Citibank Plus debit card, for example, is designed for overseas travel while the 28 Degrees MasterCard offers many of the same benefits in a credit card.
Compare forex brokers to find your best option if you’re converting a lot of money at once.
Definitely ditch the travellers’ cheques. They’re no more secure than a card, which also requires your signature, and you’re still locked into the exchange rate at the time of purchase — there are easier ways to lock in a good rate but stay open to better ones.
You have several options when travelling, all with their own pros and cons. Knowing both can help you to decide which option fits your travel plans best.
Traditionally, international travellers convert their dollars into the currency of their destination country right before the trip, or when they arrive. This practice, however, can leave you vulnerable to costs from shifting exchange rates. Also, many countries have a higher risk of theft and a lower track record of recovery.
Unfortunately, unlike cards, once you lose cash, it’s gone.
Travel money cards
Travel money cards are designed to be used overseas, unlike your everyday debit card. You can buy and load them quickly while locking in favourable exchange rates. What they give in convenience, however, they take in fees. They charge high currency conversion fees, in many cases up to 4.5 per cent.
Traditional credit cards
You may also opt to use your own credit cards, but be forewarned. These will come with high exchange and ATM fees. Sometimes, convenience comes at a high cost. But booking flights and certain other costs with them can be handy as they might then be covered by card-included travel insurance — just check the fees and rates carefully.
As you get ready to go abroad for recreation or business, make sure that you don’t lose money with high-cost exchanges. Use these tips to help you save money — and have a great time!