Staying financially intelligent while traveling is an important skill to learn.
You’ll save yourself money, prevent being scammed, and understand how your money works in a different country.
This is what you need to know.
Our five personal finance tips for travelers are:
#1: Obtain a Credit Card
First, you should be thinking about getting a credit card when traveling abroad. You might have a few credit cards in your wallet, but they might not be optimized for traveling.
As a rule of thumb, you should look for a card that has no foreign transaction fees.
Of course, never open a credit card if you know you’re going to have a high balance on it. This could end up costing more in international fees.
Every time you convert currency, you’re subject to its current exchange rate.
Banks and money changing stores profit from creating the difference between the rate at when you buy your American dollars and the rate at when they sell you the foreign currency.
This can be a major deal depending on how favorable or unfavorable the exchange rate is.
If you have a foreign credit card that charges foreign transaction fees, expect to pay your bank 2-3% on each purchase you make.
That goes on top of the profit they made for exchanging your foreign currency. So if you plan on traveling more than once, having a credit card is a good investment despite the annual fees.
#2: Notify Your Financial Institutions
Remember, your financial institution might not be in the country that you’re traveling to. In fact, they might question your transactions abroad unless you speak to them directly.
Once you’ve contacted them, it’s best to tell them what country you’re traveling to and the duration of that travel.
Doing so prevents them from freezing your account and allows you to use your credit card freely when traveling abroad.
#3: Create Online Bank Accounts
Having an online bank account gives you added security and organization of your funds when traveling abroad.
With online accounts, users are able to check their balances, stay on top of their recent transactions, and deposit and transfer funds.
Also, creating automatic payments help you pay your bills on time while helping you meet your financial duties when you’re thousands of miles away from home.
#4: Multiple Payment Forms
The ideal form of payment will depend on the country you’re traveling to and your spending habits.
Thus, you should carry a multitude of payment methods such as cash, credit cards, and debit cards.
In fact, you should consider taking out a payday loan if you need some quick cash to fund your trip.
Options such as payday loans in California can give you the extra cash needed to make your trip exciting.
You should also consider having multiple credit cards and bank accounts when traveling abroad – especially from financial institutions that are accepted internationally such as Visa and Mastercard for credit cards and USBC and Chase for banks.
Even if you’re only going to use one spending method during the trip, you should still carry the extra credit card with you.
And, you should keep the card that you used to book the trip at all times, even if you don’t plan on using it for foreign transactions.
This allows you to have a dedicated payment plan that you can use to pay for an emergency flight if the situation arises.
#5: Use Cash
For American travelers, dollars are the most cost-effective method of payment.
This is because you can automatically save paying fees that you’d have to pay at any financial institution.
Most vendors will give you a fair rate when exchanges from dollars to their local currency.
While exchanging currencies at an airport is convenient, but you will pay for the exchange rates and fees.
Alternatively, you can withdraw the currency at an ATM machine or bank upon arrival.
Fortunately, no one denies cash when it’s used abroad. Having a few hundred dollars of emergency cash is a great decision in the event that you can’t access money.
Make sure to have small denominations of the cash ready, as carrying large amounts in public can be dangerous.
To conclude, keeping your finances right when you’re traveling will save you years of problems down the line.
When traveling, make sure all of your finances are with you to prevent them from getting lost, misplaced, or stolen.
By staying financially savvy overseas, you’ll be able to fully enjoy your vacation while keeping your hard-earned money safe.
Do you have any other tips to help manage traveling finances? Did you like the article?
Tell us what you think in the comments below.