Travelling the world should be an eye-opening and stress-releasing experience, not an anxiety-inducing one. Unfortunately, many of us often stumble into money problems in our trips abroad that can lead to a great deal of anguish – problems that often can be avoided with a little foresight and preparation.
Financing a trip to far-away locales can be a struggle in and of itself. Some will save for months to have just enough to scrape by, others may look for supplementary funding like short-term vacation loans.
Once your finances are in check and you’re ready to go on your adventure, there are some commonly-made money mistakes you should be aware of before setting out. Keep these in mind and plan accordingly before beginning your next journey.
Leaving Your Bank in the Dark
A simple phone call to your bank informing them of your travel destinations can save you plenty of trouble during your trip. When you neglect to do this, your bank may flag your overseas card usage as suspicious and block your account.
Banks can detect unusual card activity fairly rapidly these days and it won’t take long for them to prevent your cards from being used if they feel the need to. While you could probably just call them if this scenario was to happen, the long-distance charges are definitely not worth it.
Not Paying Attention to Fees
Before travelling, it is wise to educate yourself on any fees you may incur – and how to avoid them – in your travels. This includes exorbitant banking fees for being outside your geographic area and fees for converting currency.
Avoid making too many withdrawals from ATMs, especially with a credit card which will have significant cash advance fees. A few good solutions for avoiding fees are the use of a prepaid travel card or finding a credit card made for overseas use that won’t charge conversion fees.
Using the airport for money exchange
Continuing on the topic of conversion fees, avoid exchanging your money at an airport. Their exchange rates are generally dreadful and will cost you much more than if you plan to do your exchange elsewhere in advance.
Not Carrying Smaller Bills
Carrying backup cash is always important no matter where your travels may lead. Many places may not accept debit and credit payment and if you’re unlucky enough to lose your cards, you’ll want to have some extra cash to keep you afloat until you can replace them.
When carrying cash in a foreign country, it’s better to have smaller bills than large ones. You will find that many vendors decline to make change for large bills and some shadier ones even use this common street scam to steal your money.
Another important thing to keep in mind when handling cash during your travels is to never keep all of your money in one spot, lest it magically disappear. While you’re certainly there to relax and enjoy the experience, try not to let your guard down for too long if you don’t want to get a fast one pulled on you.
Travelling can be a wondrously valuable learning experience that takes you out of your comfort zone and provides memories for a lifetime. If you neglect to properly prepare and manage your money, however, the experience may end up being less than enjoyable.
Take the time to phone your bank, look up any applicable fees and avoid airport exchange rates like the plague. Always carry some backup cash and be aware of your surroundings and most importantly: have fun!
Scott Cohen is a freelance financial blogger with a keen interest in personal finance tips. He is a regular contributor to the Friendly Lender blog, among others.