Traveling can lead to some amazing experiences, but it can also lead to some unique stresses. Traveling internationally, especially if it's your first time or it has been awhile, can be extremely intimidating for many reasons.
One potentially intimidating factor when traveling internationally is being able to manage your money safely and efficiently. Heading on a trip soon? Follow these banking tips to hopefully eliminate some stress when it comes to your money, and pave the way to a relaxing trip.
Have a backup plan
Never travel without a backup plan (or two, or three), especially when it comes to your money. Thinking about being stuck in a faraway country or the middle of nowhere on a road trip with a credit card that's been frozen due to fraud or a lost wallet and no backup payment method is terrifying to me.
When you travel, especially internationally, it's best to have at least three different payment methods with you. One of these payment methods should be enough cash to get you by in an emergency. If you're flying, always keep your cash with you on your flight – never check it in your luggage.
If you're traveling with someone you share accounts with, compare wallets before your trip, and choose cards for different accounts to take in each of your wallets. If one wallet is stolen or lost, you can freeze those cards but still have access to the accounts in the other person's wallet.
Know your foreign transaction fees
When traveling internationally, know how much your credit or debit card will charge you each time you swipe. Figure out which of your cards has the lowest foreign transaction fee, and plan to use that card mostly on your trip.
If you have a card that doesn't charge a foreign transaction fee, even better! Make that your main payment method for charges abroad. If you travel internationally frequently and don't currently have a card that waives foreign transaction fees, it is worth your while to consider applying for one.
If you're making reservations for your trip ahead of time, be aware that some online reservation charges might be run as foreign transactions. Use the appropriate card to limit these fees when making your arrangements ahead of time as well as when you're in country.
Notify your bank
Give your financial institutions a call or submit an online travel form to let them know you'll be traveling. It's best to provide at least one business day's notice before leaving town, and you will want to let them know your travel dates and where you are headed.
If you swipe your card somewhere you don't normally do so, this can be flagged as fraudulent and lead to your card being frozen. Making your financial institution aware of your travel plans and choosing to enter your PIN when making debit card transactions as opposed to running them as credit can reduce the likelihood of dealing with the headache of a frozen card at the beginning of your trip.
Keep checking account balances low
Keep a lower balance in your checking account in case your debit card falls victim to fraud while you are traveling. Keep the bulk of your money in your savings account and transfer what you'll need for the day to your checking account. Keeping a lower balance in your checking account means there's less available in the account if you do fall victim to fraud.
Consider also using a prepaid travel card instead of a debit card connected to your checking account. This way potential fraudulent activity won't affect your checking account.
Speaking of fraud, be extra cautious when using ATMs, especially internationally. Check for ATM skimming devices before inserting your card. Do this by examining and jiggling the part of the machine you insert your card into.
Use well-lit ATMs, and research reputable banks in the area you will be traveling. Make your ATM withdrawals at a machine located at a physical bank branch if possible. Avoid using ATMs in convenience stores or on the street when you can.
As always, be aware of your surroundings, especially when making an ATM withdrawal, and be sure your cash is safely put away before leaving the ATM. Keep your receipts as proof of your withdrawal amount if needed.
Be aware of ATM fees
Along those same lines, know how much it will cost you every time you make an ATM withdrawal. If you are withdrawing foreign currency, it can be tempting to withdraw small amounts so you don't end up with foreign currency in your wallet at the end of your trip. However, making many small withdrawals can lead to ATM fees that stack up rapidly.
Remember that your bank might charge you a fee for using another financial institution's ATM, as well as a foreign transaction fee, and the financial institution connected to the ATM you withdraw from might also charge you a fee for using their machine.
Try to estimate your daily expenses, or challenge yourself to stick to a specific daily budget on your trip. Make fewer, slightly larger, withdrawals to limit the number of ATM fees you end up paying.
Having larger amounts of cash on hand can be intimidating, so be sure not to keep it all in one place on the off chance you lose your wallet or have it stolen.
Check your statements daily while traveling
If you have access to a secure wifi connection while you are traveling, check your online banking daily. Doing so can help you catch fraud sooner rather than later, in addition to helping you keep track of how much you are spending on your trip.
Remember that you might not recognize business names connected to every transaction you make, so try and keep track of your purchases and roughly how much they were for. This will help you better account for transactions when you are looking at your statement later and don't recognize a transaction.
Skip the currency exchange counter
If you are traveling internationally, the temptation can be to head straight for the currency exchange counter at the airport to get local currency. Chances are, the airport might even be laid out so you walk right by it after landing.
To get the best exchange rates, skip the airport currency exchange counter. Most airports have ATMs, which can provide a better exchange rate and lower fees. If you are staying at a hotel or hostel with other travelers, ask around for anyone who is at the end of their trip and might consider exchanging currency with you. This does you both a favor by being able to avoid exchange fees both ways.
You can also check with your bank to see if they provide currency exchange for a reasonable rate. There is a special peace of mind that comes with landing in country with the local currency you will need in your wallet already, so if this is a service your bank provides for a minimal fee, take advantage of it.
Round up when estimating exchange rates
Foreign currency can be tricky to get the hang of. My husband once paid a taxi driver ten times what we needed to in Colombia when he was in a hurry and flustered over trying to figure out the local currency rate. While the taxi driver got a nice tip that day, my husband was extremely frustrated with himself over that costly mistake.
Knowing the average exchange rate of the currency where you are traveling to the currency you are used to is important and can help make it a little easier to navigate if you have that base in mind. It is also a good idea to round up, as exchange rates can fluctuate a bit. It's always better to find you have spent less than you thought instead of the other way around.
For example, if $1 USD is equal to 7.71 Guatemalan Quetzals, I would mentally round up to 8. When making purchases, I can then divide the price in Quetzals by 8 and have a rough idea of what I am spending in U.S. dollars but also have a little bit of padding built in.
It's also a good idea to download an offline currency exchange calculator to use when needed. If something doesn't seem right or if you have a feeling someone is trying to take advantage of you, having this backup calculator to be sure you know how much you are spending can save you money.
Don't plan on using credit for everything
If you are traveling to a developing country or are venturing away from the larger cities, there is a good chance you won't be able to swipe your card everywhere. Plan on having withdrawable funds available when you travel, whether you bring it in cash or withdraw it from an ATM in country.