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Warning: Don’t Make these 8 Money Mistakes When Traveling Abroad

by Ayngelina B

Post image for Warning: Don’t Make these 8 Money Mistakes When Traveling Abroad

You’ve been diligent about saving. You found the cheapest flight and hotel but the task of managing money is far from over. Don’t arrive home to find out your cheap trip ended up being not so cheap at all.

To stay on track be aware of these common money mistakes:

1) Not telling your bank about your trip

I have met so many people stranded without money because their bank was diligently avoiding fraud by freezing their account when they saw unusual activity.

I always call my bank and credit card company to let them know the dates I will be gone and where I will be.

Take it one step further: Get the direct line and email of one of your bank representatives. I landed in Cancun to find out that I had no access to my bank account. Thankfully when I called my bank representative who was able to activate the account on the spot.


Beautiful beaches but Cancun is no fun without cash. Photo by jthetsel

2) Using a small bank without international partnerships

Credit unions and small private banks are great until you try to get money out and the small town you are in doesn’t have a bank that can connect to yours.

Before you leave find out if your bank is connected to an international network.

Take it one step further: Bring debit cards from 2 banks, that way if one isn’t not recognized you have a second banking option.

3) Carrying Travelers Checks

I cannot tell you how many people I have met who have been saddled with traveler’s cheques they cannot use.

If you are not in a developed country you will have difficulty cashing them in and the fees are ludicrous.

4) Not checking into bank fees

I went to South East Asia and loved that I could just take money out whenever I wanted. When I returned home I found out my bank had charged me $5 for each withdrawal plus a currency conversion fee.

I had racked up another $100 in fees! So much for South East Asia being cheap. With a simple call to the bank I would have realized I should take out the maximum each time to minimize fees.

Take it one step further: Some banks have international agreements where you can use other ATMs for free. Find out if your bank has this agreement.

ATM fees aren’t the only thing that can be dizzying in Thailand

5) Using your credit cards at ATMs

If ATM cards are money grabbers it seems natural to want to use your credit card. Not so fast.

It is technically a cash advance. The fee is usually $2-5 so less than an ATM but there is a catch.

You don’t have a grace period to pay it back and highest interest rate kicks in the day after you take the money out, often at a much higher interest rate.

Get around it: if you carry no balance on your card you can take money out and then head to online banking to transfer the money, but if you are not diligent about this you will pay outrageous fees. You may also be able to prepay on your visa to avoid interest.


Using your credit card at ATMs can result in huge interest fees. Photo by Tim Moffatt.

6) Paying with your credit card

In many countries it seems smart to pay for large bills with Visa, but you need to find out first if the vendor charges a credit card fee.

When I was in Cusco, Peru I discovered there was a 6% credit card fee for hikes to Machu Picchu.

Fortunately the tour operator was honest and explained fees were lower at the ATMs. Unfortunately people buying $1000 tours were unknowingly spending $60 in credit card fees.


Happy to have saved a 6% credit card fee on my hike to Machu Picchu.

7) Charging your credit card in Dollars

It is very common to be asked if you want your credit card to be charged in dollars (dynamic currency conversion) or the local currency, especially at hotels or high-end restaurants.

Makes sense to be billed in dollars right? Wrong.

The credit card bill will arrive with a high rate of conversion and the vendor can choose whatever rate of conversion they want to use. On top of that your credit card can still charge its 1-3 percent foreign transaction fee.

8) Exchanging money at the airport

You arrive at your location excited, tired and just wanting to get into town.

Do not go to the money changer at the airport kiosk.  They make their money by giving a very bad exchange rate or charging an exorbitant fee.

If you don’t have local currency ask where you can find an ATM. There is usually one around the departures section next to the restaurants.

Don’t get tricked into high fees and bad conversion rates at the airport! Photo by Alan Levine

Have you been stung by any of these money mistakes? Let me know in the comments.

If you liked this, you might also like: 6 Money Lessons I learned Whilst Traveling.

Main image: International money by epSos.de

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18 comments… read them below or Add a Comment

Mauritius Holidays Tips

There is no best way to manage money abroad.

The easiest are the most expensive – using your credit card or taking cash from the ATM.

The cheapest can be the most dangerous – bringing money in cash in the local currency. The best way would be a mixture of all of them.

In Prague, avoid exchanging money in the city centre heaving with tourists – the exchange rates or commission are geared to this clientele!

In Mauritius, you will surprisingly find good rates at the airport, at least until now.

It pays to do your research thoroughly before you travel.

Stephanie @ Where in the World Am I?

Carry small bills. There’s nothing like eating your meal or filling up your grocery cart only to find out that the restaurant or store doesn’t make change. I’m constantly getting stuck at the veggie stand with a hundred-rupee bill for about thirty rupees’ worth of veggies.

Elaine

I called American Express before a trip to Europe two months ago and the customer service person seemed completely bewildered by the call. He said it was not necessary to let them know I’d be traveling abroad.

Duke Dillard

Thanks, this is helpful. We have had problems with our bank freezing our credit card even after telling them we were going overseas. But so goes life sometimes. I’ll definitely pass these along to my friends.

Sabrina

Really good tips! I had to learn some of that the hard way too…

One more tip: I always carry some emergency money in cash with me when I fly somewhere (about $100). Sometimes you end up having to pay visa fees or immigration fees before you can even get to an ATM – happened to me in Egypt and I was luckily able to scramble together the few Euros and dollars I had left in cash.

Roy | Cruisesurfingz

Great tips AB. I only found out about the dynamic conversion “scam” the other day.

1. In my opinion travellers cheques are useless.
2. Check the XE.com rate before changing money. In South East Asia and Eastern Europe you can get a better deal changing cash at a money changer than from an ATM.
3. Always pay in local currency even if the shop offers you the prices in Dollars (common in mexico)

Deborah Harmes

We got stung once — ONCE — before we realized that our Westpac account in Australia was double-dipping us on fees. We now ATM cash out of another account back in Australia that is linked to our credit card which charges NO FEES for cash withdrawals as long as we pay within the 30 day limit. It’s up to the consumer to inform themselves before travelling overseas because the banks are certainly not going to let you in on how they rip you off!

Barbara

Also in Asia very common for public transport people (taxi’s Tuk-Tuks etc) to conveniently not have change for even reasonably small bills. Most all shops here in Thailand other than big Dept stores charge for accepting a credit card.
Roy absolutely use money changers, just ask a local where to find one, most definitely a higher exchange rate. Carry a calculator Laos is another country where you can pay in USD however you will pay more that way.

Carlo Alcos

Elaine, it’s always a good idea to call your CC/bank companies to let them know your travel plans. My card’s been blocked a few times because they were flagged when I made an unexpected purchase. One time they even called my cell phone when I was in a store (outside my home region) buying something to make sure it was me.

Emily @travelated

Really great tips! I’ve had to learn the hard way to always let your bank know you’ll be traveling abroad–I had a credit card canceled while I was abroad because the bank assumed it was stolen. I can’t stand calling customer service lines, so now I just send an email to their customer service team or do an online chat and it all gets taken care of.

world is 2 travel

great tips thank u for sharing

Raymond @ Man On The Lam

It’s an excellent idea to let your bank know where and how long you’ll be gone. My bank card got “skimmed” a few years ago, and ever since they have been watching where I go like a hawk…:)

Jamie

These are great tips in both the article and the comments section – particularly for those first-time international travelers. Things that many of use would never think of.

Lynda Kling

my son brought American Express travelers checks over from England. NO ONE in NYC would take them. He ended up going to the AM Xpress office and cashing them ALL in….

Tom@Englisch Test Online

Best way to get cash is to pick up the tab at the restaurant when you are wiht a group. Collect cash from your co-travellers and pay with a credit card.

Danielle @ Couple Getaways

These are great tips! The one about alerting your bank and credit cards is HUGE! Funny little story, sort of off topic: My folks go to Mexico every year and find tipping in dollars is very well received (at least it was when our currency was better!). My dad had the bright idea of getting crisp one dollar bills and having them made into a notebook using padding compound. No one would accept his money. So much for that bright idea!

Lillie of AroundTheWorldL.com

I actually have to disagree with not bringing Travelers Cheques! I think they’re a great safety backup cash method. On my around-the-world trip, I had $1,000 of Travelers Cheques stolen– and the bank reimbursed 100% of it!!! That doesn’t happen with many other funding sources. I agree the fees to actually use them make them a silly for everyday use, but they are an indestructible back-up method.

elv is andres

i am abroad,and forgot to tell my bank,and i am blocked from using my debit card.i have contacted customer services,who seem totally unhelpfull,as i could not answer all securtiy questions.the reason been,i use my debit card seldom.i cannot reset my security,as i ahve also forgotten my secure key card.all hsbc say at moment,they will call me back,if and when,etc.i am stuck in thailand with no money.any suggestions please?
thanks

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