As the economies and banking systems of the world are increasingly integrated, managing your money on vacation abroad still poses particular problems. However, nowadays it a lot easier to send money overseas trough companies that are specialised in money transfer such as TransferGo. Here are some abortions to consider, which you should avoid if you exceed a limit.
- Bring a lot of money from home
To save time when you arrive, you may be tempted to change the currency. Resist the temptation. In addition to the security aspects, if you have a lot of money, you will usually receive a lower exchange rate than the ATM at your destination. You will also find the exchange rate with foreign ATMs if you bring US Dollars and you change them upon arrival. Prices can be particularly unfavourable for the exchange stations in airports or tourist areas.
- Make use a credit card.
From a financial point of view, it makes sense to use your credit card to make as many purchases as possible. In most foreign travel destinations, credit cards are accepted or almost as good as at home. If you use a card instead of money, you can avoid the extra cost of using a foreign ATM.
These ATM fees include the fees of your own bank for the use of another computer, as well as those of the owner of the foreign ATM that you use. When an ATM is used, foreign currency fees (FX) are usually due between 1% and 3%, which will charge the withdrawal of money to your bank.
Most credit cards also charge foreign exchange fees, and the percentage range is similar to ATMs. However, the best international credit cards do not charge any fees. Make sure that you or someone else travelling with you already have a free card in your wallet. If you are planning a long trip, you may even consider using a map of this type overseas.
Another advantage of using credit cards is that they offer more protection against fraud than debit cards. For credit cards, you do not have to pay more than $50 for fraudulent charges, while for debit cards you can withdraw the total amount from your current account or savings account.
- Use of non-bank teller machines.
There are smaller ATMs in shops, hotel lobbies, etc. who are not affiliated with the big banks. However, you must treat these outposts as a last resort.
These non-bank teller machines cannot only charge higher rates and offer lower exchange rates than ATMs, but they also provide the unwanted option of using dynamic currency conversion (DCC) for their withdrawal. This measure, which converts your local currency purchase into a US dollar machine, seems tempting because the exchange rate does not apply. However, CCD rates are generally higher than exchange rates.
- Get cash advances for your credit card.
Most ATMs abroad also accept your credit card. In fact, most of them are affiliated with one of the Cirrus and Plus networks, or both, subsidiaries of MasterCard and Visa, respectively. However, avoid using your credit card to pay in advance at a vending machine.
This step is expensive for the same reason as at home: the money is considered a loan and the interest runs daily if you withdraw the money until you pay the advance.
- Blood on security.
It is advisable to be more careful when travelling abroad than for the security of your money, your cards and your identity card at home. In many European cities and elsewhere, the rate of petty crime, such as pickpocketing, is higher than most cities. No matter where, tourists may be more exposed to theft than locals because they carry more money and valuables, and are less familiar with local customs and fraud.
A smart strategy to minimise the consequences of theft is to separate your cards, place your ATM card in one place and carry your credit card to another location. If you have at least a second credit card with you (which is a good idea for many reasons), keep this card in a different place.