Getting the Most Out of Your Money When You Travel

Financial Advice By: Carmen Wong Ulrich

Q: I have finally saved up enough money to travel out of the country for the first time in my life (yay!), but now I’m wondering what the best thing to do with my money is once I get there.  I’ve read terrible stories about people withdrawing cash from the local ATM’s, only to be given a ridiculously low conversion rate, or using their credit cards and being charged an insane fee.  I don’t have a lot of money to spend while I’m there and will definitely be sticking to a budget, so I just need to make sure that I am getting the most out of my money.  Should I just pull a bunch of cash out before I go and plan on using that while I’m away?

Saving money on conversion rates is only one aspect of spending money during your travels out of the country.  Safety is a big issue as well as foreign transaction fees.  For example, though you should take some cash for taxis and smaller transactions, the extra bucks you may spend using a credit card for everything else acts as a kind of insurance.  It’s insurance that someone can’t pickpocket or purse-snatch their way into your whole budget!

Here are other tips to save when you travel outside the U.S.:

  • When converting cash:  Avoid airport exchanges and hotels.  You’re trapped ‘prey’ so they tend to have some of the highest conversion fees around.  Instead, convert cash at home, before you travel, at your local bank or credit union.
  • Watch out with your plastic:  If you need to take out more cash while you’re away, stick to a no-fee debit card.  But, do NOT use your debit card to make purchases while you’re away.  Debit cards can have higher international transaction fees than your credit cards and most importantly, they don’t offer fraud and purchase protection by law like a credit card.  And it goes without saying that a prepaid card can also hit you with monster fees, so leave those at home.
  • Let your travel companion be your lowest—or no-fee—credit card.  Look into your credit card terms and take along with you the card with no foreign transaction fees.  Some cards can add 2% or 3% to every swipe, which can really add up.  And make copies of the back and front of your cards and ID’s to leave in your hotel safe or another location, just in case you lose anything.

Happy trails!


Carmen Wong Ulrich is a personal finance expert and author of The Real Cost of Living.”

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