Practical Traveler: Money MattersWritten by Judy Pfaffenberger | | firstname.lastname@example.org
Yes it does. Almost any travel is an expensive proposition. However, international travel involves problems and situations that are not generally encountered traveling in this country.
When people traveled to foreign countries in the past, they usually bought travelers checks to take along. This is no longer advisable. They can be hard to cash (incurring a surcharge), and businesses do not want to bother with them.
Another thing you should not do except in an extreme emergency is to use your credit card to get a cash advance. Your interest rate kicks in immediately even if you pay your balance off on time.
So what is the best way to be able to spend money in foreign countries? Currently the ATM card is considered the best, although some changes have meant that they aren’t as good as they were. There used to be a flat transaction fee or a 1% fee but now most charge up to 3% which can be a considerable amount. Unfortunately, somewhat the same thing has happened with credit cards. They all charge a 1% international exchange fee, but most are also now charging the extra 2 or 3%. Some cards from credit unions as well as Capital One ATM and credit cards do not assess the extra fee. To use their ATM card, you must have a Direct Banking Account with them which can be done by mail or internet.
If you don’t have an ATM card, you can purchase a preloaded ATM card. The advantage to this is that the amount that can be taken out is limited to how much you put in. (AAA sells these preloaded VISA cards for a minimum of $100, that can be used as a debit or an ATM card. They are protected like travelers checks and will be replaced if lost or stolen.) A disadvantage of a regular ATM card is that someone with your card and pin could wipe out an account.
Even with an ATM card it is still advisable to take cash as a back- up. Sometimes ATM cards do not work. If that happens, try another machine the first one might be empty. However, do not carry any large amounts of cash in a purse, fanny pack, or wallet in a pocket. Anything important should be kept in a money belt or some kind of pouch that can be carried underneath clothing. This should include cash, credit cards, and passports. It is also a good idea to make a photocopy of the first page of your passport which you keep in a separate place. In addition, you should make copies of both sides of your credit cards. However, it is a good idea to cut the copies in half and keep each half in a different place.
Another issue involving credit cards is chip and pin. Most other countries have gone to this system. (Europe by 2012; Canada by 2015) Instead of a “swipe strip”, they contain a computer chip and require the use of a pin number for security. As of this time no American credit card companies have plans to switch to this new system. Many travelers have reported no problems so far with this. However, unmanned service stations, railway, and subway stations can cause difficulties.
In many countries businesses do as some of our gas stations are doing and charge a higher price for using credit cards. This is most common at smaller restaurants and hotels. Many bed and breakfasts and most small local restaurants do not accept credit cards. If you do plan to use a card in a restaurant, ask first whether they will accept it and swipe it at the table.
Something that I recently heard about occurs when you purchase something from the American office of a foreign-based company and use a credit card. Although the price is quoted in dollars, when you get your statement, the foreign exchange premium is added on. I know of this happening to a person who purchased airline tickets from Aer Lingus.
Unless it is absolutely necessary, do not purchase foreign currency in the U.S. before your trip. There are usually ATMs and exchange booths at all airports and points of entry. For a recent transatlantic cruise, I was going to need significant Euros for private tours that we had booked. Someone suggested that I just go to the bank and get what I needed. I called to get the price for 400 Euros and 160 British pounds (this was for two of us). In the end I used my Capital One ATM card and it turned out to be $133 cheaper with the card than it would have been from the bank.
Try not to change more than you will need; you can usually get more if necessary. Changing it back costs you twice. If you think you might go back to a country, keep what you have left for a starter. If you are on a tour, use the leftover money toward the tip for your guide.
Some of this information came from articles and letters from subscribers to a wonderful travel magazine, International Travel News.